40-F

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 40-F

	REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
	OR
[X]	ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2017 Commission File Number: 001-35531

	TAHOE RESOURCES INC.
	(Exact name of Registrant as specified in its charter)
British Columbia, Canada		1040	27-1840120
(Province or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code)	(I.R.S. Employer Identification No.)
	5310 Kietzke Lane, Suite 200 Reno, Nevada 89511(775) 448-5800
	(Address and telephone number of Registrant’s principal executive offices)
	Tahoe Resources USA Inc.5310 Kietzke Lane, Suite 200 Reno, Nevada 89511 (775) 448-5800
	(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)

Securities registered or to be registered pursuant to section 12(b) of the Act:

Title Of Each Class	Name Of Each Exchange On Which Registered
Common Shares, no par value	New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

For annual reports, indicate by check mark the information filed with this Form:

 [X] Annual Information Form  [X] Audited Annual Financial Statements

Indicate the number of outstanding shares of each of the Company’s classes of capital or common stock as of the close of the period covered by the annual report: 312,775,761Common Shares as at December 31, 2017

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

Yes      [X] No     [ ]

Indicate by check mark whether the Company 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Company was required to submit and post such files).

Yes     [ ] No    [ ]

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ANNUAL INFORMATION FORM, AUDITED FINANCIAL STATEMENTS AND MD&A

Tahoe Resources Inc. (the “Company” or “Tahoe”) is a Canadian public company whose common shares are listed on the Toronto Stock Exchange and the New York Stock Exchange (the “NYSE”). It is a “foreign private issuer” as defined in Rule 3b-4 under Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is eligible to file this annual report on Form 40-F pursuant to the multi-jurisdictional disclosure system.

The following documents of the Company are filed as exhibits to, and incorporated by reference into, this Annual Report:

Document	Exhibit No.
Annual Information Form of the Company for the year ended December 31, 2017	99.1 (1)
Audited financial statements of the Company for the years ended December 31, 2017 and 2016, including the reports of the independent registered public accounting firm with respect thereto	99.2 (1)
Management Discussion and Analysis of the Company for the years ended December 31, 2017 and 2016	99.3 (1)

(1) Filed as an exhibit hereto.

Pursuant to Rule 3a12-3 under the Exchange Act, the Company’s equity securities are exempt from sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act.

INCORPORATION BY REFERENCE

The documents, forming part of this Form 40-F, are incorporated by reference into the following registration statements under the Securities Act of 1933, as amended.

Form	Registration No.
S-8	333-181981
F-3D	333-213086

FORWARD-LOOKING STATEMENTS

This Annual Report contains “forward-looking statements” within the meaning of Section 27A of the United States Securities Act of 1933, as amended, Section 21E of the United States Exchange Act of 1934, as amended, the United States Private Securities Litigation Reform Act of 1995, or in releases made by the United States Securities and Exchange Commission, all as may be amended from time to time, and "forward-looking information" under the provisions of applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of the Company.

All statements, other than statements of historical fact, are forward-looking statements. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “guidance”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, or variations or comparable language of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, "should", “might” or “will be taken”, “occur” or “be achieved” or the negative connotation thereof.

Forward-looking statements include, but are not limited to, statements related to the following: in regards to the status of the appeals to the Guatemalan Constitutional Court (i) of the decision by the Supreme Court of Guatemala ordering the Guatemalan Ministry of Energy and Mines ("MEM") to conduct consultation with indigenous populations in certain designated locations in and around the Escobal Mine, (ii) of the decision by the Supreme

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Court of Guatemala reinstating the Company’s mining license in respect of the Escobal mine, and (iii) relating to Escobal’s export credential, the timing for such appeals to be decided and the likelihood of adverse decisions by the Constitutional Court; the timing and results of other court proceedings; the timing and likelihood of resolving the road blockage affecting the Escobal mine; timing and possible outcome of pending litigation; the future price of gold, silver, copper, lead and zinc, the estimation of Mineral Reserves and Mineral Resources, the realization of Mineral Reserve estimates; production and cost targets for the Company’s gold operations in 2018 of 400,000 to 475,000 ounces of gold, total cash costs of $725 to $775 per ounce and all-in sustaining costs of $1,000 to $1,100 per ounce, as well as estimated 2018 production, cash costs, all-in sustaining costs, project capital, sustaining capital and exploration expenditures on a per gold mine basis; the Company’s goal to reach and sustain 18-21 million ounces of silver production and 500 - 550 thousand ounces of gold production annually; the continued evaluation of the La Arena II project and the economic analysis provided in the PEA, including the timeline and estimated capital required and the assessment of financial and strategic options; multi-year gold guidance (2018 to 2020) relating to gold ounces produced, total cash costs per ounce gold produced net of by-product credits, all-in sustaining costs per ounce gold produced net of by-product credits, sustaining and project capital expenditures, corporate general and administration expenses, and exploration expenses; the expectation of meeting production targets; growing gold production to over one half million ounces in 2019; the timing and cost of the design, procurement, construction and commissioning of the 24,000 tpd crushing and agglomeration circuit at Shahuindo, as well as the expansion of the Shahuindo mine to a production capacity of 36,000 tpd with commissioning by mid-year 2018 and achieving the full 36,000 tpd production rate by the end of 2018 providing an expected 80% ultimate recovery, in line with the pre-feasibility study; the expectation of achieving ultimate overall gold recovery at Shahuindo of 67% for run-of-mine material; the timing of the receipt of permits at Shahuindo; the timing for construction of Pad 2B at Shahuindo and the commencement of production at Pad 2B in Q3 2018; the estimated cost and timing of completion of the Bell Creek shaft project and tailings pond expansion; care and maintenance plans at Escobal; providing further updates to guidance when additional information regarding the Escobal license is available; expected working capital requirements; the sufficiency of capital resources and the consideration of alternative financing arrangements to meet strategic needs; the expected depreciation and depletion rates; exploration and review of prospective mineral acquisitions; the anticipated timing of updated Mineral Resource and Mineral Reserve estimates; the timing for completion of the underground dewatering project at Escobal; the cost and timing of sustaining capital projects; and the timing, costs, results and impacts of purported class action lawsuits filed against the Company and certain of its officers and directors.

Forward-looking statements are based on the reasonable assumptions, estimates, analyses and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Management believes that the assumptions and expectations reflected in such forward-looking statements are reasonable. Assumptions have been made regarding, among other things: the Company’s performance and ability to operate and implement operational improvements at the Escobal, La Arena, Shahuindo and Timmins Mines; studies and development efforts on the La Arena II deposit; the Company’s ability to carry on exploration and development activities, including land acquisition and construction; the availability and sufficiency of power and water for operations; the timely receipt of permits and other approvals; the successful outcomes of consultations with indigenous populations; the price of silver, gold and other metals; prices for key mining supplies, including labor costs and consumables, remaining consistent with the Company’s current expectations; production meeting expectations and being consistent with estimates; plant, equipment and processes operating as anticipated; there being no material variations in the current tax and regulatory environment; the Company’s ability to operate in a safe, efficient and effective manner; the exchange rates among the Canadian dollar, Guatemalan quetzal, Peruvian sol and the USD remaining consistent with current levels; the ability to resolve the protests and road blockages of the Escobal Mine; the timing and amount of foregone taxes and royalties; the timing and likelihood of further workforce reductions; the timing and ability of the Company to resume operations in the event the suspension of the mining license to Minera San Rafael for the Escobal Mine is lifted and all licenses, permits and credentials affecting the operation of the Company’s mines, including the Escobal Mine, are renewed or re-issued and all roadblocks are resolved, and relationships with the Company’s partners, including employees, vendors and community populations are maintained or effectively managed; the Company’s ability to obtain financing as and when required and on reasonable terms; and the

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Company’s ability to continue to comply with the terms of the credit agreements with its lenders. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used.

Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include but are not limited to; the fluctuation of the price of silver and gold; opposition to development and mining operations by one or more groups of indigenous people; actions that impede or prevent the operations of the Company’s mines; the inability to develop and operate the Company’s mines; social unrest and political or economic instability and uncertainties in the jurisdictions in which the Company operates; the timing and ability to maintain and, where necessary, obtain necessary permits and licenses; changes in national and local government legislation, taxation and controls or regulations; environmental and other governmental regulation compliance; un-appealable judicial decisions; the uncertainty in the estimation of Mineral Resources and Mineral Reserves; fluctuations in currency exchange rates; infrastructure risks, including access to roads, water and power; and the timing and possible outcome of pending or threatened litigation and the risk of unexpected litigation.

For a more detailed discussion of risks relevant to the Company, see “Description of Tahoe’s Business - Risk Factors Related to Tahoe’s Business”, and “- Risk Factors Related to Tahoe’s Shares” in the Annual Information Form for the fiscal year ended December 31, 2017 attached as Exhibit 99.1 to this Annual Report and available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov or on the Company’s website at www.tahoeresources.com.

Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. Forward-looking statements are made as of the date hereof and, accordingly, are subject to change after such date. Except as otherwise indicated by the Company, these statements do not reflect the potential impact of any non-recurring or other special items or of any disposition, monetization, merger, acquisition, other business combination or other transaction that may be announced or that may occur after the date hereof. Forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans and allowing investors and others to get a better understanding of the Company’s operating environment. The Company does not intend or undertake to publicly update any forward-looking statements that are included in this document, whether as a result of new information, future events or otherwise, except as, and to the extent required by, applicable securities laws.

CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING
ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES

The Mineral Resource and Mineral Reserve estimates contained in this Annual Report, including the documents incorporated by reference herein, have 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 and use terms that are not recognized by the United States Securities and Exchange Commission (“SEC”). Canadian reporting requirements for disclosure of mineral properties are governed by National Instrument 43-101 Standardsof DisclosureforMineralProjects (“NI 43-101”). The definitions used in NI 43-101 are incorporated by reference from the CIM Definition Standards adopted by CIM Council on May 10, 2014 (the “CIM Definition Standards”). U.S. reporting requirements are governed by the SEC Industry Guide 7 (“Industry Guide 7”) under the United States Securities Act of 1933, as amended. These reporting standards have similar goals in terms of conveying an appropriate level of confidence in the disclosures being reported, but embody difference approaches and definitions. For example, the terms “Mineral Reserve”, “Proven Mineral Reserve” and “Probable Mineral Reserve” are Canadian mining terms as defined in in NI 43-101, and these definitions differ from the definitions in Industry Guide 7. Under Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. Further, under Industry Guide 7, mineralization may not be classified as “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.

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While the terms “Mineral Resource”, “Measured Mineral Resource”, “Indicated Mineral Resource” and “Inferred Mineral Resource” are defined in and required to be disclosed by NI 43-101, these terms are not defined terms under Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. United States readers are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. In addition, “Inferred Mineral Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. A significant amount of exploration must be completed in order to determine whether an Inferred Mineral Resource may be upgraded to a higher category. Under Canadian regulations, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. United States readers are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations if such disclosure includes the grade or quality and the quantity for each category of Mineral Resource and Mineral Reserve; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this Annual Report, including the documents incorporated by reference herein, containing descriptions of Tahoe’s mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

NOTE TO UNITED STATES READERS REGARDING DIFFERENCES
BETWEEN UNITED STATES AND CANADIAN REPORTING PRACTICES

The Company is permitted, under a multi-jurisdictional disclosure system adopted by the United States, to prepare this Annual Report in accordance with Canadian disclosure requirements, which are different from those of the United States. The Company prepares its consolidated financial statements, which are filed with this Annual Report on Form 40-F, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, which differ in certain respects from generally accepted accounting principles in the United States (“US GAAP”) and from practices prescribed by the SEC. Therefore, the Company’s financial statements incorporated by reference in this Annual Report may not be comparable to financial statements prepared in accordance with U.S. GAAP.

DISCLOSURE CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act to mean controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Evaluation of Disclosure Controls and Procedures

At the end of the period covered by this Annual Report on Form 40-F, being the fiscal year ended December 31, 2017, an evaluation was carried out under the supervision of and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operations of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation the CEO and the CFO have concluded that, as of the end of the period covered by this Annual Report, the Company’s 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 to the SEC under the Exchange Act is:

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• recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and

• accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Internal Control over Financial Reporting

Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act as a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers and effected by the issuer’s board of directors, management and other personnel, 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 and includes those policies and procedures that:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

• 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

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that may have a material effect on the financial statements.

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

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d -15(f) of the Exchange Act) for the Company.

The Company’s management, including its CEO and CFO, does not expect that its disclosure controls and procedures or internal controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

With the participation of the CEO and CFO, management carried out an evaluation of the Company’s internal control over financial reporting as of December 31, 2017. In making this evaluation, the Company’s management used the framework established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2017. A copy of management’s report on the effectiveness of our internal controls is included with the Audited Annual

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Financial Statements for the year ended December 31, 2017, filed as Exhibit 99.2 and incorporated by reference herein.

REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Company’s independent registered public accounting firm, Deloitte LLP, has issued a report of independent registered public accounting firm on our internal control over financial reporting as of December 31, 2017. For Deloitte LLP’s report see the Audited Annual Financial Statements for the year ended December 31, 2017 filed as Exhibit 99.2 and incorporated by reference herein, under the heading “Report of Independent Registered Public Accounting Firm”.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in the Company’s internal control over financial reporting during the year ended December 31, 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

NOTICES PURSUANT TO REGULATION BTR

The Company did not send any notices required by Rule 104 of Regulation BTR during the year ended December 31, 2017 concerning any equity security subject to a blackout period under Rule 101 of Regulation BTR.

CORPORATE GOVERNANCE

The Company is listed on the Toronto Stock Exchange and is required to describe its practices and policies with regard to corporate governance, with specific reference to National Instrument 58-101 – DisclosureofCorporateGovernancePractices, on an annual basis by way of certain disclosures contained in the Company’s management information circular. The Company is also listed on the New York Stock Exchange (“NYSE”) and additionally complies with the applicable rules and guidelines of the NYSE as well as the SEC, including those applicable rules and regulations resulting from the Sarbanes-Oxley Act of 2002. The Company believes that there are no significant differences between its corporate governance practices and those required to be followed by United States domestic issuers under the applicable rules and guidelines of the NYSE.

The Company’s Board of Directors (the “Board of Directors”) is responsible for the Company’s corporate governance policies and has separately designated the following committees (collectively, the “Committees”):

• The Compensation Committee, as required by Section 303A.05 of the NYSE Listed Company Manual,

• The Corporate Governance and Nominating Committee, as required by Section 303A.04 of the NYSE Listed Company Manual,

• The Audit Committee, as required by Section 303A.06 of the NYSE Listed Company Manual, and

• The Health, Safety, Environment and Community Committee.

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 currently prescribed by section 303A.02 of the NYSE Listed Company Manual, and, with reference to the Audit Committee, Rule 10A-3 of the Exchange Act.

The Committees and their membership for the year ended December 31, 2017, are described below. Unless noted, each individual served on the committee for which they are listed for the entire year. Mr. Chuck Jeannes, an independent director, was appointed to each of the Compensation Committee, and the Corporate Governance and Nominating Committee, with effect from March 9, 2017. Mr. Zeitler resigned as a director and from each committee on which he served effective May 3, 2017

Compensation Committee

During much of the year ended December 31, 2017 and as of the date of this Annual Report, the Compensation Committee was comprised of four independent directors:

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• Kenneth F. Williamson (Chair),

• Tanya M. Jakusconek,

• Chuck Jeannes (appointed March 9, 2017),

• Paul B. Sweeney, and

• Klaus M. Zeitler (resigned May 3, 2017).

The charter for the Compensation Committee is available on the Company’s website at www.tahoeresources.com.

Corporate Governance and Nominating Committee

During much of the year ended December 31, 2017 and as of the date of this Annual Report, the Corporate Governance and Nominating Committee was comprised of three independent directors:

• A. Dan Rovig (Chair),

• Chuck Jeannes (appointed March 9, 2017),

• James S. Voorhees, and

• Klaus M. Zeitler (resigned May 3, 2017).

The charter for the Corporate Governance and Nominating Committee is available on the Company’s website at www.tahoeresources.com.

Health, Safety, Environment and Community Committee

The Health, Safety, Environment and Community Committee was comprised of four independent directors during the year ended December 31, 2017:

• James S. Voorhees (Chair),

• Tanya M. Jakusconek,

• Drago G. Kisic, and

• Alan C. Moon.

The Health, Safety, Environment and Community Committee is responsible for establishing and reviewing the Company’s health, safety and environmental policies, monitoring effectiveness of, and compliance with, such policies, and receiving audit results and reports from management regarding environmental, health, community, and safety performance.

AUDIT COMMITTEE

Composition of the Audit Committee

The Company'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's Audit Committee was comprised of four directors during the year ended December 31, 2017, that the Board of Directors have determined are independent as determined under each of Rule 10A-3 under the Exchange Act and Section 303A.02 of the NYSE Listed Company Manual:

• Paul B. Sweeney (Chair),

• Drago G. Kisic,

• Kenneth F. Williamson, and

• Alan C. Moon.

All members of the Audit Committee are financially literate, meaning they are able to read and understand the Company's financial statements and to understand the breadth and level of complexity of the issues that can reasonably be expected to be raised by the Company's financial statements. The Audit Committee meets the composition requirements set forth by Section 303A.07 of NYSE Listed Company Manual.

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Audit Committee Charter

The full text of the Charter for the Audit Committee is attached as Schedule A to the Company's annual information form, which is filed as Exhibit 99.1 to this Annual Report. The Charter of the Audit Committee is also available on the Company’s website at www.tahoeresources.com.

Audit Committee Financial Expert

The Company’s Board of Directors has determined that Paul B. Sweeney is an audit committee financial expert (as that term is defined in Item 407 of Regulation S-K under the Exchange Act).

CODE OF BUSINESS CONDUCT AND ETHICS

Adoption of Code of Ethics

The Company has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) for all its directors, executive officers and employees. The Code of Ethics materially complies with Section 303A.10 of the NYSE Listed Company Manual. The Code of Ethics meets the requirements for a “code of ethics” within the meaning of that term in Form 40-F. The text of the Code of Ethics is posted on the Company's website at www.tahoeresources.com and will be provided in print to any shareholder that provides the Company with a written request addressed to the Company’s Corporate Secretary.

Amendments or Waivers

During the fiscal year ended December 31, 2017, the Company did not substantively amend, waive or implicitly waive any provision of the Code of Ethics with respect to any of the directors, executive officers or employees subject to it.

To the extent that the Company's board or a board committee determines to grant any waiver of the Code of Ethics for an executive officer or director, Section 303A.10 of the NYSE Listed Company Manual requires that the waiver must be disclosed to shareholders within four business days of such determination.

All amendments to the Code of Ethics, and all waivers of the Code of Ethics with respect to the Company’s principal executive officer, principal financial officer or other persons performing similar functions, will be posted on the Company’s website, submitted to the SEC on Form 6-K and provided in print to any shareholder that provides the Company with a written request addressed to the Company’s Corporate Secretary.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Principal Accountant Fees

The following table shows the aggregate fees billed to the Company during the years ended December 31, 2017 and 2016 by Deloitte LLP, in its capacity as the Company’s independent registered public accounting firm:

	Year Ended December 31
	2017		2016
Audit Fees (1)	$	1,299,000	$	1,322,175
Audit Related Fees (2)	-		-
Tax Fees (3)	-		-
All Other Fees (4)	-		-

Total $ 1,299,000 $ 1,322,175

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(1)	Audit fees represent the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements and reviews of the Company’s quarterly financial reporting, and other services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
(2)	Audit related fees represent the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under “Audit Fees” above. These audit-related services include accounting consultations on proposed and completed transactions, services performed in connection with the Company’s listing on the NYSE.
(3)	Tax fees represent the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. These professional services included preparation of Canadian federal and provincial income tax returns, provision of advice on tax positions taken by the Company, and review of opinions relating to requests for rulings or technical advice from tax authorities.
(4)	All other fees represent aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above under Audit Fees, Audit Related Fees or Tax Fees. These services related to Canadian indirect tax issues, Directors, stock based compensation, company reorganization and transfer price management.

Pre-Approval of Audit and Non-Audit Services Provided by Independent Registered Public Accounting Firm

The Audit Committee pre-approves all audit services to be provided to the Company by its independent registered public accounting firm. Non-audit services that are prohibited to be provided to the Company by its independent registered public accounting firm 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 registered public accounting firm. All non-audit services performed by the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2017 were pre-approved by the Audit Committee of the Company. No non-audit services were approved pursuant to the de minimis exemption to the pre-approval requirement.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has not entered into any “off-balance sheet arrangements”, as defined in General Instruction B(11) to Form 40-F, that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

CONTRACTUAL OBLIGATIONS

For a description of the contractual obligations of the Company, see “Commitments and Contingencies” on page 36 of the Company’s management discussion and analysis for the year ended December 31, 2017 which is attached as Exhibit 99.3 to this annual report on Form 40-F and incorporated by reference herein.

MINE SAFETY DISCLOSURE

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities under the regulation of the Federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977.

The Company did not have any mines in the United States during the fiscal year ended December 31, 2017.

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UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

Undertaking

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.

Consent to Service of Process

Concurrently with the filing of its Registration Statement on Form 40-F with the SEC on April 30, 2012, the Company filed an Appointment of Agent for Service of Process and Undertaking on Form F-X signed by the Company and its agent for service of process with respect to the class of securities in relation to which the obligation to file this Annual Report on Form 40-F arises.

Any change to the name or address of the Company’s agent for service shall be communicated promptly to the Commission by amendment to Form F-X referencing the file number of the Company.

12

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Company 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.

Date: February 22, 2018 TAHOE RESOURCES INC. By: /s/ Ronald W. ClaytonRon Clayton
President, Chief Executive Officer and Director

13

EXHIBIT INDEX

Exhibit Number	Exhibit Description
Principal Documents
99.1	Annual Information Form of the Company for the year ended December 31, 2017
99.2	Audited financial statements of the Company and the notes thereto as at and for the fiscal years ended December 31, 2017 and 2016 together with the reports of the independent registered public accounting firm thereon
99.3	Management Discussion and Analysis of the Company for the years ended December 31, 2017 and 2016
Certifications
99.4	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act
99.5	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act
99.6	Certification of Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.7	Certification of Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Consents
99.8	Consent of Deloitte LLP, the Company’s Independent Registered Public Accounting Firm
99.9	Consent of Charles Muerhoff, SME RM, dated February 22, 2018
XBRL
101.INS	XBRL Instance
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

EX-99.1

ANNUAL INFORMATION FORM

For the year ended December 31, 2017

Dated February 22, 2018

THIS PAGE INTENTIONALLY LEFT BLANK.

Annual Information Form for the Year Ended December 31, 2017

TABLE OF CONTENTS

INTERPRETATION AND OTHER INFORMATION		1
	Definitions	1
GLOSSARY OF TECHNICAL TERMS		3
CURRENCY INFORMATION		5
FORWARD-LOOKING STATEMENTS		5
DISCLOSURE STANDARDS		7
CORPORATE STRUCTURE		9
	Incorporation and Offices	9
GENERAL DEVELOPMENT OF TAHOE'S BUSINESS		9
	Development of Tahoe's Business	9
	2018 Developments	10
	2017 Developments	11
	2016 Developments	13
	2015 Developments	13
	Indebtedness	14
	Inter-Corporate Relationships	14
	Legal	14
DESCRIPTION OF TAHOE'S BUSINESS		16
	Overview of Tahoe's Business and Strategy	16
	The Gold Industry	17
	The Silver Industry	18
	Product	18
	Specialized Skill and Knowledge	18
	Employees	19
	Foreign Operations	19
	Competitive Conditions	19
	Production	19
	Mineral Reserves and Mineral Resources	20
	Environmental and Social Activities	22
	Doing Business In Guatemala, Peru and Canada	24
	Risk Factors Relating to Tahoe's Business	27
	Risk Factors Relating to Tahoe's Shares	39
	The Escobal Mine	40
	The La Arena Mine	47
	The Shahuindo Mine	56
	The Bell Creek Complex	63
	The Timmins West Mine	69
	Other Exploration and Development Properties	77
DIVIDENDS DISTRIBUTIONS AND REINVESTMENT PLAN		80
DESCRIPTION OF CAPITAL STRUCTURE		80
MARKET FOR SECURITIES		80
	Trading History on the TSX	81

Annual Information Form for the Year Ended December 31, 2017 i

	Trading History on the NYSE	81
PRIOR SALES		82
DIRECTORS AND EXECUTIVE OFFICERS		82
	Directors and Executive Officers	82
	Cease Trade Orders, Bankruptcies, Penalties or Sanctions	85
	Conflicts of Interest	85
	Interest of Management and Others in Material Transactions	86
MATERIAL CONTRACTS		86
TRANSFER AGENTS AND REGISTRAR		86
INTERESTS OF EXPERTS		86
SELECTED CONSOLIDATED FINANCIAL INFORMATION		87
ADDITIONAL CORPORATE AND FINANCIAL INFORMATION		87
INFORMATION CONCERNING THE COMPANY'S AUDIT COMMITTEE AND EXTERNAL AUDITOR		87
	The Audit Committee's Duties and Charter	87
	Composition of the Audit Committee	87
	Relevant Education and Experience	87
	External Auditor and Other Professional Service Fees	89

ii Tahoe Resources Inc.

INTERPRETATION AND OTHER INFORMATION

DEFINITIONS

In this Annual Information Form (“AIF”), the words and phrases are defined below unless the context otherwise requires.

“Audit Committee” means the Audit Committee of the Board.

“BCA” means the Business Corporations Act (British Columbia), as amended, including all regulations promulgated thereunder.

“Bell Creek Mine” or “Bell Creek” means the underground gold mining operation encompassing the Bell Creek deposit located in the Timmins District of the province of Ontario in Canada, which produces ore that is processed at the Bell Creek Mill.

“Bell Creek Mill” means the gold processing plant, located in the Timmins District of the province of Ontario in Canada that processes ore from the Bell Creek Mine and the Timmins West Mine.

“Board” means the board of directors of the Company.

“Company” means Tahoe Resources Inc., together with all of its subsidiaries, unless the context indicates otherwise.

“Compensation Committee” means the Compensation Committee of the Board.

“CSA” means the Canadian Securities Administrators.

“Deferred Share Awards” means awards that will be issued upon the passage of time, continued employment of the recipient by the Company or upon such other terms and conditions as the Compensation Committee of the Company may determine in its discretion, pursuant to the Company’s Share Option and Incentive Share Plan, including any amendments thereto.

“Entre Mares” means Entre Mares de Guatemala, S.A.

“EscobalAcquisition” means the acquisition by the Company of the Escobal Mine Assets in accordance with the terms and conditions of the Transaction Agreement.

“Escobal Exploitation License” means the exploitation license (concession) on which the Escobal vein and Escobal Mine are located.

“Escobal Feasibility Study” means the independent technical report entitled “Escobal Mine Guatemala NI 43-101 Feasibility Study - Southeastern Guatemala” issued on November 5, 2014, with effective dates of January 23, 2014 for

the Escobal Mineral Resource and July 1, 2014 for the Escobal Mineral Reserve.

“Escobal License Suspension” means the temporary suspension of MSR’s Escobal mining license resulting from the May 2017 claim filed with the Supreme Court of Guatemala by an anti-mining organization.

“Escobal Mine” or “Escobal” means the mining project comprised of the Escobal Mine Assets.

“Escobal Vein” means the zone of mineralization on the Escobal Exploitation License that contains the Mineral Resources and Mineral Reserves for the Escobal Mine.

“Goldcorp” means Goldcorp Inc., a Canadian public company and where the context requires, includes affiliates of Goldcorp Inc.

“La Arena II” means the porphyry copper-gold project proximal to the existing La Arena Mine.

“La Arena Feasibility Study” means the NI 43-101 technical report for La Arena with an effective date of December 31, 2014. This report has been superseded by an updated NI 43-101 technical report with an effective date of January 1, 2018.

“La Arena Mine” or “La Arena” means the oxide open pit, heap leach gold mine located in northern Peru.

“Lake Shore” or “Tahoe Canada” means Lake Shore Gold Corporation (doing business as Tahoe Canada), a Canadian company which is a wholly-owned subsidiary of the Company and which holds mineral interests in Ontario, Canada.

“Lake Shore Arrangement” means the acquisition of all of the outstanding shares of Lake Shore on the terms and conditions set forth in the Lake Shore Arrangement Agreement.

“Lake Shore Arrangement Agreement” means the arrangement agreement entered into as of February 8, 2016, between the Company and Lake Shore relating to the acquisition by the Company of all of the outstanding shares of Lake Shore by way of Plan of Arrangement.

“MARN” means the Ministry of Environment and Natural Resources of Guatemala.

“MEM” means the Ministry of Energy and Mines of Guatemala and/or Peru, as specified when used.

Annual Information Form for the Year Ended December 31, 2017 1

“MSR”means Minera San Rafael, S.A., a Guatemala corporation that is owned by Escobal Resources Holdings Limited and the Company.

“MNDM” means Ministry of Northern Development and Mines of Ontario, Canada.

“NI 43-101” means National Instrument 43-101 - Standards of Disclosure for Mineral Projects, of the CSA.

“NI 52-110” means National Instrument 52-110 - Audit Committees, of the CSA.

“NYSE” means the New York Stock Exchange.

“Persons” includes an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative.

“Restricted Share Awards” means awards that are issued but which will only be delivered to the holder of the award upon the passage of time, continued employment of the holder by the Company or upon such other terms and conditions as the Compensation Committee of the Company may determine in its discretion, pursuant to the Company’s Share Option and Incentive Share Plan, including any amendments thereto.

“Rio Alto” means Rio Alto Mining Limited, an Alberta company that was a party to the Rio Alto Arrangement Agreement and which was subsequently amalgamated into Tahoe Resources ULC, an Alberta company which is a wholly-owned subsidiary of the Company and which holds mineral interests in Peru.

“Rio AltoArrangement” means the business combination between the Company and Rio Alto on the terms and conditions set forth in the Rio Alto Arrangement Agreement.

“Rio AltoArrangement Agreement” means the arrangement agreement dated February 9, 2015 between the Company and Rio Alto with respect to the Rio Alto Arrangement.

“SEC” means the Securities and Exchange Commission of the United States of America.

“Secondary Offering” means the offering and sale of 58,051,692 common shares of the Company

beneficially held by Goldcorp that closed on June 30, 2015.

“SEDAR” means the System for Electronic Document Analysis and Retrieval, accessible through the internet at www.sedar.com.

“Shahuindo Prefeasibility Study” means the independent technical report entitled “Technical Report on the Shahuindo Mine, Cajabamba, Peru” dated January 25, 2016.

“Shahuindo Mine” or “Shahuindo” means the gold-silver open pit, heap leach mine located in northern Peru.

“Shares or Tahoe Shares” means common shares without par value of the Company.

“Share Option and Incentive Share Plan” means the Company’s Share Option and Incentive Share Plan, as amended and restated effective March 7, 2013.

“Tahoe” means Tahoe Resources Inc., together with all of its subsidiaries, unless the context indicates otherwise.

“Tahoe Resources Peru” or “Tahoe Peru” means Tahoe Resources Peru S.A.C. dba Tahoe Peru, a Peru entity which is a wholly owned subsidiary of the Company.

“Timmins Mines” means the Timmins West Mine, the Bell Creek Mine, and the Bell Creek Mill.

“Timmins West Mine” means the underground gold mining operation encompassing the Timmins, Thunder Creek and 144 Gap deposits located in the Timmins District of the province of Ontario, Canada. Ore from the Timmins West Mine is trucked to the Bell Creek Mill for processing.

“Transaction Agreement” means the definitive purchase and sale agreement made as of May 3, 2010, as amended on October 12, 2010, relating to the acquisition by the Company of the Escobal Mine Assets and including any amending agreement or instrument supplementary or auxiliary thereto.

“TSX” means the Toronto Stock Exchange.

2 Tahoe Resources Inc.

GLOSSARY OF TECHNICAL TERMS
Ag:	Silver.
Au:	Gold.
Contained Ounces:	The troy ounces of metal in resources or reserves obtained by multiplying tonnage by grade.
Cut-off Grade:	The grade below which mineralized material is considered uneconomic.
Development:	The preparation of a mineable deposit.
g/tonne or g/t:	Grams per metric tonne; 31.10348 grams is equal to one troy ounce.
Indicated Mineral Resource(1):	That part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.
Inferred Mineral Resource(1):	That part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
IRR:	Internal Rate of Return.
km:	Kilometre.
km2:	Square Kilometre.
Kv:	Kilovolt.
Measured Mineral Resource(1):	That part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.
Mineral Reserve:	The economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at pre-feasibility or feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. The reference point at which Mineral Reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. The public disclosure of a Mineral Reserve must be demonstrated by a pre-feasibility study or feasibility study.

Annual Information Form for the Year Ended December 31, 2017 3

GLOSSARY OF TECHNICAL TERMS
Mineral Resource:	A concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. The term Mineral Resource covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which Mineral Reserves may subsequently be defined by the consideration and application of Modifying Factors.
Modifying Factors:	Considerations used to convert Mineral Resources to Mineral Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors
NPV:	Net Present Value.
NSR:	Net Smelter Return; gross sales proceeds received from the sale of production obtained from a property, less the costs of insurance, smelting, refining (if applicable) and the cost of transportation of production from the mine or mill to the point of sale. For the purposes of taxes and royalties in Guatemala the cost of transportation is not deducted.
Ore:	A metal or mineral or a combination of these of sufficient value as to quality and quantity to enable it to be mined and processed at a profit.
Pb:	Lead.
Probable Mineral Reserve(1):	The economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve. Probable Mineral Reserve estimates must be demonstrated to be economic, at the time of reporting, by at least a pre-feasibility study.
Proven Mineral Reserve(1):	The economically mineable part of a Measured Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors. The term should be restricted to that part of the deposit where production planning is taking place and for which any variation in the estimate would not significantly affect the potential economic viability of the deposit. Proven Mineral Reserve estimates must be demonstrated to be economic, at the time of reporting, by at least a pre-feasibility study.
QA/QC:	Quality Assurance/Quality Control.
Recovery Rate:	The percentage of metals or minerals which are recovered from ore during processing.
Reserves:	Combined Proven and Probable Mineral Reserves.
tpd:	Metric tonnes per day.
Zn:	Zinc.

⁽¹⁾  The definitions of Proven and Probable Mineral Reserves, and Measured, Indicated and Inferred Mineral Resources are set forth in NI 43-101 which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects, as well as in the Canadian Institute of Mining, Metallurgy and Petroleum’s “CIM Definition Standards - For Mineral Resources and Reserves, Definitions and Guidelines” (CIM Standards) adopted by the CIM Council on December 2000 and modified in 2005, 2010 and 2014. A reader in the United States should be aware that the definition standards enunciated in NI 43-101 and in the CIM Standards differ significantly from those set forth in SEC Industry Guide 7, and resource information disclosed pursuant to NI 43-101 may not be comparable to similar information disclosed by US companies. See "Disclosure Standards - Cautionary Note to US Investors Regarding Reserves and Resources" for more information.

4 Tahoe Resources Inc.

CURRENCY INFORMATION

All currency amounts in this AIF are expressed in United States dollars (“US$”), unless otherwise noted. The following table reflects the low and high rates of exchange for one United States dollar, expressed in Canadian dollars, (“CAD$”) during the periods noted, the rates of exchange at the end of such periods and the average rates of exchange during such periods, based on the Bank of Canada noon spot rate of exchange for 2015 and 2016, and the daily exchange rate for 2017 and 2018.

	One Month Ended	Years Ended December 31,
	Jan. 31, 2018	2017	2016	2015
Low for the period	1.2293	1.2128	1.2544	1.1749
High for the period	1.2535	1.3743	1.4589	1.3965
Rate at the end of the period	1.2293	1.2545	1.3427	1.3840
Average noon spot rate for the period	1.2413	1.2986	1.3248	1.2875

On January 31, 2018, the Bank of Canada daily exchange rate was $1.00-CAD$1.2293.

FORWARD-LOOKING STATEMENTS

This AIF contains “forward-looking statements” within the meaning of Section 27A of the United States Securities Act of 1933, as amended, Section 21E of the US Exchange Act, the United States Private Securities Litigation Reform Act of 1995, or in releases made by the United States Securities and Exchange Commission, all as may be amended from time to time, and "forward-looking information" under the provisions of applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of the Company. All statements, other than statements of historical fact, are forward-looking statements. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “guidance”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, or variations or comparable language of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, "should", “might” or “will be taken”, “occur” or “be achieved” or the negative connotation thereof.

Forward-looking statements include, but are not limited to, statements related to the following: in regards to the status of the appeals to the Guatemalan Constitutional Court (i) of the decision by the Supreme Court of Guatemala ordering the Guatemalan Ministry of Energy and Mining (“MEM”) to conduct consultation with indigenous populations in certain designated locations in and around the Escobal Mine, (ii) of the decision by the Supreme Court of Guatemala reinstating the Company’s mining license in respect of the Escobal mine, and (iii) relating to Escobal’s export credential, the timing for such appeals to be decided and the likelihood of adverse decisions by the Constitutional Court; the timing and results of other court proceedings; the timing and likelihood of resolving the road blockage affecting the

Escobal Mine; the continuation of the expansion plans at Shahuindo and Bell Creek and the on-going review of all other capital and exploration expenditures; the timing and amount of estimated future production, costs of production, capital expenditures and requirements for additional capital; the expectation of meeting production targets; growing gold production to over one half million ounces in 2019; the timing and cost of the design, procurement, construction and commissioning of the 24,000 tpd crushing and agglomeration circuit at Shahuindo, as well as the expansion of the Shahuindo Mine to a production capacity of 36,000 tpd with commissioning in mid-year 2018 and achieving the full 36,000 tpd production rate by the end of 2018, providing an expected 80% ultimate gold recovery in line with the pre-feasibility study; the timing for commencement of production at Pad 2B in Q3 2018; the expectation of the capacity of the south waste rock dump at Shahuindo; the timing of completion of the Bell Creek shaft expansion project to double the Bell Creek Mine production to 80,000 ounces of gold per year in 2020, and the expected effect of decreasing operating costs at Bell Creek; the completion of construction of the Phase 5 tailings facility expansion at the Bell Creek Mill ready for operation in accordance with the life of mine plan; care and maintenance plans at Escobal; providing further updates to guidance when additional information regarding the Escobal license is available; the cost and timing of sustaining and project capital expenditures, corporate general and administration expenses, and exploration expenses; expected working capital requirements; the expected depreciation and depletion rates; exploration and review of prospective mineral acquisitions; the anticipated timing of updated Mineral Resource and Mineral Reserve estimates; and the timing, costs, results and impacts of purported class action lawsuits filed

Annual Information Form for the Year Ended December 31, 2017 5

against the Company and certain of its officers and directors.

Forward-looking statements are based on the reasonable assumptions, estimates, analyses and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Management believes that the assumptions and expectations reflected in such forward-looking statements are reasonable. Assumptions have been made regarding, among other things: the Company’s performance and ability to operate and implement operational improvements at the Escobal, La Arena, Shahuindo and Timmins Mines; studies and development efforts on the La Arena II deposit; the Company’s ability to carry on exploration and development activities, including land acquisition and construction; the availability and sufficiency of power and water for operations; the timely receipt of permits and other approvals; the successful outcomes of consultations with indigenous populations; the price of silver, gold and other metals; prices for key mining supplies, including labor costs and consumables, remaining consistent with the Company’s current expectations; production meeting expectations and being consistent with estimates; plant, equipment and processes operating as anticipated; there being no material variations in the current tax and regulatory environment; the Company’s ability to operate in a safe, efficient and effective manner; the exchange rates among the Canadian dollar, Guatemalan quetzal, Peruvian sol and the USD remaining consistent with current levels; the ability to resolve the protests and road blockages of the Escobal Mine; the timing and amount of foregone taxes and royalties; the timing and likelihood of further workforce reductions; the timing and ability of the Company to resume operations in the event suspension of the mining license to Minera San Rafael for the Escobal Mine is lifted and all licenses, permits and credentials affecting the operation of the Company’s mines, including the Escobal Mine, are renewed or re-issued and all roadblocks are resolved, and relationships with the Company’s partners, including employees, vendors and community populations are maintained or effectively managed; the Company’s ability to obtain financing as and when required and on reasonable terms; and the Company’s ability to continue to comply with the terms of the credit agreements with its lenders. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used.

Forward-looking statements are subject to known and unknown risks, uncertainties and other factors

that may cause actual results to be materially different from those expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include but are not limited to; the fluctuation of the price of silver and gold; opposition to development and mining operations by one or more groups of indigenous people; actions that impede or prevent the operations of the Company’s mines; the inability to develop and operate the Company’s mines; social unrest and political or economic instability and uncertainties in the jurisdictions in which the Company operates; the timing and ability to maintain and, where necessary, obtain necessary permits and licenses; changes in national and local government legislation, taxation and controls or regulations; environmental and other governmental regulation compliance; un-appealable judicial decisions; the uncertainty in the estimation of Mineral Resources and Mineral Reserves; fluctuations in currency exchange rates; infrastructure risks, including access to roads, water and power; and the timing and possible outcome of pending or threatened litigation and the risk of unexpected litigation. For a more detailed discussion of risks relevant to the Company, see "Description of Tahoe’s Business - Risk Factors Relating to Tahoe’s Business", and "- Risk Factors Relating to Tahoe’s Shares" below.

Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. Forward-looking statements are made as of the date hereof and, accordingly, are subject to change after such date. Except as otherwise indicated by the Company, these statements do not reflect the potential impact of any non-recurring or other special items or of any disposition, monetization, merger, acquisition, other business combination or other transaction that may be announced or that may occur after the date hereof. Forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans and allowing investors and others to get a better understanding of the Company’s operating environment. The Company does not intend or undertake to publicly update any forward-looking statements that are included in this document, whether as a result of new information, future events or otherwise, except as, and to the extent required by, applicable securities laws.

6 Tahoe Resources Inc.

DISCLOSURE STANDARDS

Technical Disclosure

Charles Muerhoff, Vice President Technical Services and Qualified Person as defined in NI 43-101 has reviewed and approved the scientific and technical information contained in this AIF.

The basis of the Mineral Resource and Mineral Reserve estimates for the Escobal Mine is from Escobal Mine Guatemala NI 43-101 Feasibility Study dated November 5, 2014. Mineral Resources at January 1, 2018 were reported using a silver-equivalent cut-off grade of 100 g/t using metal prices of $20/oz silver, $1,300/oz gold, $1.00/lb lead and $1.10/lb zinc. Mineral Reserves at January 1, 2018 were reported using a cut-off grade calculated from the net smelter return value minus production costs using metal prices of $20/oz silver, $1,300/oz gold, $1.00/lb lead and $1.10/lb zinc. Mineral Resources and Mineral Reserves reported at January 1, 2018 were calculated by subtracting mine depletion volumes from the Mineral Resource and Mineral Reserve estimates stated in the aforementioned technical report. Mineral Reserves are included in Mineral Resources.

The basis of the Mineral Resource and Mineral Reserve estimates for the La Arena Mine and for La Arena II is from Technical Report on the La Arena Project, Peru, dated February 20, 2018 with an effective date of January 1, 2018. Oxide Mineral Resources for the La Arena Mine at January 1, 2018 were reported at a gold cut-off grade of 0.10 g/t within a $1,400/oz gold pit shell. Oxide Mineral Reserves for the La Arena Mine are reported using gold cut-off grades of 0.10 g/t within a pit designed from a $1,200/oz gold pit shell. The La Arena Mine Mineral Resources and Mineral Reserves reported at January 1, 2018 were calculated by applying the mine topographic surface at January 1, 2018 to an updated Mineral Resource estimate effective July 1, 2018. La Arena II oxide Mineral Resources are reported at a gold cut-off grade of 0.10 g/t and sulfide Mineral Resources are reported at a copper-equivalent cut-off grade of 0.18% within a $4.00/lb copper and $1,500/oz gold pit shell. Mineral Reserves are included in Mineral Resources.

The basis of the Mineral Resource and Mineral Reserve estimates for the Shahuindo Mine is from the Technical Report on the Shahuindo Mine, Cajabamba, Peru dated January 25, 2016. Oxide Mineral Resources at January 1, 2018 are reported at a gold cut-off grade of 0.15 g/t within a $1,400/oz gold pit shell. Sulfide Mineral Resources are reported in situ at a gold-equivalent cut-off grade of 0.5 g/t using a gold-to-silver ratio of 80. Oxide Mineral Reserves at January 1, 2018 are reported at a gold cut-off grade 0.18 g/t within a pit designed from a $1,200/oz gold pit shell. Oxide

Mineral Resources and Mineral Reserves at January 1, 2018 were calculated by applying the mine topographic surface at January 1, 2018 to an updated Mineral Resource estimate effective July 1, 2017. There are no sulfide Mineral Resources at Shahuindo. Mineral Reserves are included in Mineral Resources.

The basis of the Timmins West Mine Mineral Resources and Mineral Reserves is from National Instrument 43-101 Technical Report, Timmins West Mine, Timmins, Ontario, Canada, dated September 20, 2017 with an effective date of May 15, 2017. Mineral Resources are reported using a gold cut-off grade of 1.5 g/t. Mineral Reserves are reported using a gold cut-off grade of 2.0 g/t and a gold price of $1,250/oz. Mineral Resources and Mineral Reserves at January 1, 2018 were calculated by subtracting mine depletion volumes through December 31, 2017 from the Mineral Resource and Mineral Reserve estimates stated in the aforementioned technical report. Mineral Reserves are included in Mineral Resources.

The basis of the Mineral Resource and Mineral Reserve estimates for the Bell Creek Mine is from NI 43-101 Technical Report, Updated Mineral Reserve Estimate for Bell Creek Mine, Hoyle Township, Timmins, Ontario, Canada dated March 27, 2015. Mineral Resources at January 1, 2018 was reported at a gold cut-off grade of 2.2 g/t. Mineral Reserves at January 1, 2018 are reported using a gold cut-off grade of 2.3 g/t and a gold price of $1,250/oz. Mineral Resources and Mineral Reserves at January 1, 2017 were calculated by mine depletion volumes November 2017 and forecasted production for December 2017 from an updated Mineral Resource estimate effective June 1, 2016. Mineral Reserves are included in Mineral Resources.

The basis of the Whitney Mineral Resources is from Technical Report and Resource Estimate on the Upper Hallnor, C-Zone, and Broulan Reef Deposits, Whitney Gold Property, Timmins Area, Ontario, Canada, dated February 26, 2014. Mineral Resources were reported using a gold cut-off grade of 3.0 g/t.

The Mineral Resource estimate for the Fenn-Gib project is from Fenn-Gib Resource Estimate Technical Report, Timmins Canada dated November 17, 2011 for Lake Shore Gold Corp. The effective date of the Mineral Resource estimate was November 17, 2011. Indicated Mineral Resources reported used a gold cut-off grade of 0.5 g/t within an optimized $1,190/oz gold pit shell. Inferred Mineral Resources within an optimized $1,190/oz gold pit shell reported used a gold cut-off grade of 0.5 g/t; Inferred Mineral Resources

Annual Information Form for the Year Ended December 31, 2017 7

outside of the optimized pit shell reported using a gold cut-off grade of 1.5 g/t.

The Mineral Resource estimate for the Juby project is from Technical Report on the Updated Mineral Resource Estimate for the Juby Gold Project, Tyrrell Township, Shining Tree Area, Ontario dated February 24, 2014. The effective date of the Mineral Resource estimate was February 24, 2014. Mineral Resources reported used a gold cut-off grade of 0.4 g/t.

The Mineral Resource estimate for the Gold River project is from Technical Report on the Update of Mineral Resource Estimate for the Gold River Property, Thorneloe Township, Timmins, Ontario, Canada dated April 5, 2012 with an effective date of January 17, 2012. Mineral Resources reported used a gold cut-off grade of 2.0 g/t.

The Mineral Resource estimate for the Marlhill deposit is from Technical Report on the Marhill Project, Hoyle Township, Timmins, Ontario, Canada, with an effective date of March 1, 2011. Mineral Resources are reported using a gold cut-off grade of 2.9 g/t.

The Mineral Resource estimate for the Vogel/Schumacher deposit is fromTechnical Report on the Initial Mineral Resource Estimate for the Vogel/Schumacher Deposit, Bell Creek Complex, Hoyle Township, Timmins, Ontario, Canada, with an effective date of June 14, 2011. Mineral Resources are reported using a cut-off grade of 0.63 g/t inside an optimized pit shell using a gold price of US$1,150/oz. Additional Mineral Resources which occur below the pit shell are reported using a gold cut-off grade of 2.9 g/t.

Cautionary Note to US Investors Regarding Reserves and Resources

The Mineral Resource and Mineral Reserve estimates contained in this AIF have 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 and use terms that are not recognized by the United States Securities and Exchange Commission (“SEC”). Canadian reporting requirements for disclosure of mineral properties are governed by NI 43-101. The definitions used in NI 43-101 are incorporated by reference from the CIM Definition Standards adopted by CIM Council on May 10, 2014 (the “CIM Definition Standards”). U.S. reporting requirements are governed by the SEC Industry Guide 7 (“Industry Guide 7”) under the United States Securities Act of 1933, as amended. These reporting standards have similar goals in

terms of conveying an appropriate level of confidence in the disclosures being reported, but embody difference approaches and definitions.

For example, the terms “Mineral Reserve”, “Proven Mineral Reserve” and “Probable Mineral Reserve” are Canadian mining terms as defined in in NI 43-101, and these definitions differ from the definitions in Industry Guide 7. Under Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. Further, under Industry Guide 7, mineralization may not be classified as “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.

While the terms “Mineral Resource”, “Measured Mineral Resource”, “Indicated Mineral Resource” and “Inferred Mineral Resource” are defined in and required to be disclosed by NI 43-101, these terms are not defined terms under Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. United States readers are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. In addition, “Inferred Mineral Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. A significant amount of exploration must be completed in order to determine whether an Inferred Mineral Resource may be upgraded to a higher category. Under Canadian regulations, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. United States readers are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations if such disclosure includes the grade or quality and the quantity for each category of Mineral Resource and Mineral Reserve; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measures. Accordingly, information contained in this AIF containing descriptions of Tahoe’s mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

8 Tahoe Resources Inc.

CORPORATE STRUCTURE

INCORPORATION AND OFFICES

The Company was incorporated under the BCA on November 10, 2009 under the name “CKM Resources Inc.,” which was changed to “Tahoe Resources Inc.” on January 13, 2010. The Company’s head office is located at 5310 Kietzke Lane, Suite 200, Reno, Nevada, United States 89511. The Company’s registered and records office is located at 1055 West Georgia Street, Suite 1500, Vancouver, British Columbia, Canada, V6E 4N7.

Tahoe currently has seven significant wholly-owned subsidiaries: La Arena S.A., a company incorporated under the laws of Peru; Lake Shore Gold Corp., a company incorporated under the laws of Canada; Minera San Rafael, S.A., a company incorporated under the laws of Guatemala; Tahoe Resources Peru S.A.C., incorporated under the laws of Peru; Shahuindo S.A.C., a company incorporated under the laws of Peru; Tahoe Resources ULC, a company incorporated under the laws of Alberta; and Tahoe Resources USA Inc., a company incorporated under the laws of Nevada. See "General Development of Tahoe’s Business - Inter-Corporate Relationships".

GENERAL DEVELOPMENT OF TAHOE'S BUSINESS

DEVELOPMENT OF TAHOE'S BUSINESS

OVERVIEW

Since incorporation in November 2009 and initial public offering in 2010, Tahoe has developed the Escobal Mine in Guatemala and acquired mining interests in Peru and Canada.

ESCOBAL MINE

The Company acquired the Escobal Mine assets located in Guatemala on June 8, 2010 pursuant to the terms of the Transaction Agreement with affiliates of Goldcorp. The Escobal Acquisition was completed contemporaneously with the Company’s initial public offering. The Escobal Mine achieved commercial production in January 2014. Mining operations are currently suspended while a suspension of the exploitation license is litigated and until the export credential is renewed and a roadblock affecting delivery of materials in and out of the Escobal Mine can be resolved. See "General Development of Tahoe’s Business - Legal - Escobal License Suspension", "- Escobal Export Credential", and "- Guatemala Roadblock".

LA ARENA MINE

The Company acquired the La Arena Mine assets located in northwestern Peru on April 1, 2015 pursuant to the terms of the Rio Alto Arrangement. Commercial operations at La Arena began in 2011. The La Arena Mine assets include, but are not limited to, the mineral and land concessions associated with the open pit gold mine at La Arena and La Arena II.

SHAHUINDO MINE

The Company acquired the Shahuindo Mine assets located in northwestern Peru on April 1, 2015 pursuant to the terms of the Rio Alto Arrangement. The Shahuindo Mine Assets include, but are not limited to, the mineral and land concessions associated with the open pit gold mine at Shahuindo. Commercial production began at Shahuindo in May 2016.

TIMMINS MINES

The Company acquired the Timmins Mines located in Timmins, Ontario on April 1, 2016 pursuant to the terms of the Lake Shore Arrangement. The Timmins Mines consist of two mining operations: Bell Creek Mine and Timmins West Mine, which both feed the Bell Creek Mill. Lake Shore began commercial operations at Bell Creek Mine in 2012 and at Timmins West Mine in 2011. Additional assets acquired pursuant to the Lake Shore Arrangement included, but were not limited to, the Fenn-Gib Project, the Juby Project, the Vogel Project, and the Gold River Project, as well as ownership in the Whitney Joint Venture and other mineral and land concessions previously held by Temex Resources Corp., which was amalgamated with Lake Shore effective January 1, 2018.

Annual Information Form for the Year Ended December 31, 2017 9

2018 DEVELOPMENTS

LA ARENA II

La Arena II is a large-tonnage copper-gold porphyry deposit located in close proximity to the currently producing La Arena oxide gold mine in Peru. After completing an internal scoping study on La Arena II in early 2017, which showed encouraging results, the Company commissioned a new NI 43-101 technical report for the La Arena property which included a Preliminary Economic Assessment (“PEA”) of the La Arena II project, which was completed in February 2018.

Highlights of the La Arena II PEA include:

• Total Measured and Indicated Mineral Resources of 5.8 billion pounds of copper and 5.6 million ounces of gold. Inferred Mineral Resources total 349 million pounds of copper and 683 thousand ounces of gold.

• Mineral Resources within the mine plan total 5.2 billion pounds of copper and 5.4 million ounces of gold.

• Annual metal recovered averages 207 million pounds of copper and 149 thousand ounces of gold over a 21 year mine life, plus an additional 115 million pounds of copper and 226 thousand ounces of gold recovered over a two year pre-production period. Total copper and gold recovered to concentrate and doré over the life of the project is estimated to be 4.5 billion pounds of copper and 3.4 million ounces of gold.

• Capital costs estimated at US$1.36 billion for project/initial capital and US$1.09 billion for sustaining capital over the life of the project.

• Average annual after-tax cash flow of US$273 million from the commencement of commercial production.

• Average co-product cost of $600 per ounce gold and $1.55 per pound copper.

• Average annual cash operating cost of $395 million. Total operating cost is $12.87 per tonne processed.

• After tax net present value at an 8% discount rate of US$824 million and an internal rate of return of 14.7% with a payback period of 4.6 years at the base case metal prices.

Long-term base case metal prices used for the La Arena II PEA were US$3.30 per pound copper and US$1,300 per ounce gold.

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The La Arena II PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the Preliminary Economic Assessment will be realized.

Tahoe expects to continue its evaluation of the La Arena II project with the intent of advancing the project to the prefeasibility or feasibility stage at the appropriate time. The timeline and estimated capital required to progress the project to the next stage are under review and no decisions have been made at this time. The project will be evaluated in the context of existing operations and pipeline opportunities. Tahoe is open to all financial and strategic options available in order to progress the project responsibly and to maximize value for its shareholders.

An expanded discussion of the La Arena II project is included in the La Arena technical discussion contained in this AIF.

LA ARENA DEEP OXIDE PIT EXPANSION

The Company experienced a considerable positive reconciliation between production and the Mineral Resource and Mineral Reserve model, for both ore tonnes and gold grade, at the La Arena Mine in 2017. As the pit deepens, it has become evident that the frequency and continuity of the higher-grade Tilsa-style structures and associated fracture system is more extensive than previously modeled. Tahoe initiated a diamond drill program in December 2017 to better define and characterize the oxide mineralization below the current life-of-mine pit with the target of increasing reserves and extending the oxide mine life. Drilling is anticipated to conclude at the end of Q1 2018 with Mineral Resource and Mineral Reserve modeling updates to follow.

SHAHUINDO CRUSHING AND AGGLOMERATION CIRCUIT

Tahoe initiated a review of the crushing, size distribution, geotechnical and material handling characteristics of ore at Shahuindo in the second half of 2016. The review supported the achievement of throughput and recovery rates for agglomerated ores contained in the Shahuindo Prefeasibility Study. The review also identified opportunities to slightly reduce capital expenditures and operating costs at the mine through revisions to the

10 Tahoe Resources Inc.

crushing and agglomeration circuit. The Company completed the permitting process and began construction of the 12,000 tpd crushing and agglomeration circuit in Q1 2017. The 12,000 tonne per day crushing-agglomeration-conveyance circuit is in the final stages of commissioning and has been placed into operation. Commissioning of the expanded crushing and agglomeration circuit to 36,000 tonnes per day is expected to commence in mid-2018. Once in full operation, the Company expects an 80% ultimate gold recovery, in line with the pre-feasibility study.

BELL CREEK SHAFT EXPANSION

Work on the Bell Creek shaft expansion project began in the second quarter of 2016, with key positions hired and underground shaft access development commenced in June 2016. Shaft engineering work was completed in 2016, and shaft expansion work continued in 2017. Excavation of the first two pilot raises is complete, and excavation of the third and final pilot raise was initiated at the bottom level of 1,040 meters. Shaft rehabilitation and furnishing is complete down to a depth of 433 meters with new sets, guides and services installed. On the surface, demolition of the historical hoisting plant was completed in Q2 2017, and foundation work for the new hoist and headframe is now complete. The new administration building is complete and occupied and construction of the new security building is in progress. The expansion project is expected to be essentially complete by mid-2018. The project is expected to double production at Bell Creek to approximately 80,000 ounces per year in 2020 and significantly extend mine life.

SHAHUINDO PAD 2B

Detailed engineering of the foundation platform for Pad 2B was completed in June 2017 and construction began in the third quarter. Pad 2B is scheduled to be placed into production in Q3 2018.

JUBY

Juby is a large near-surface deposit located in the Shining Tree Area of Northern Ontario, near the town of Gowganda, approximately 100 kilometres south of Timmins. A 2014 Mineral Resource estimate contained 26.6 million tonnes at an average gold grade of 1.28 grams per tonne for 1.1 million ounces of gold in the Indicated category and 96.2 million tonnes at an average gold grade of 0.94 grams per tonne for 2.9 million ounces of gold in the Inferred category. Field activity during Q3 of 2017 included geochemical soil sampling, bedrock mapping and prospecting which identified a number of mineralized zones peripheral to the main Juby zone. Data compilation and refinement of the geologic and resource models continues with drilling expected to begin in Q2 of 2018 assuming timely receipt of permits.

REVOLVING CREDIT FACILITY

On February 16, 2018, the Company closed its revised revolving credit facility ("the Second Amended and Restated Credit Facility") with its bank syndicate, providing the Company with full access to a $175 million revolving credit facility, which includes a $25 million accordion feature, for total access of $200 million in capital. The Second Amended and Restated Credit Facility matures on July 19, 2021. This facility is structured on the strength of Tahoe’s gold business alone, and access to the facility does not rely on the operation of the Escobal Mine. See "General Development of Tahoe’s Business - Indebtedness - Revolving Credit Facility".

2017 DEVELOPMENTS

ESCOBAL LICENSE SUSPENSION

On May 24, 2017, an anti-mining organization (“Plaintiff”) filed a claim in the Supreme Court of Guatemala against MEM alleging that MEM violated the Xinka indigenous communities’ right of consultation in advance of granting the Escobal mining license to Tahoe’s Guatemalan subsidiary, Minera San Rafael ("MSR"). On July 5, 2017, the Company was notified that the Supreme Court of Guatemala issued a provisional decision in respect of the action against MEM that suspended the Escobal mining license of MSR until the underlying civil claim was fully heard on the merits. The Company filed a procedural challenge with the Constitutional Court, the highest court in Guatemala, regarding the assignment of judges of the Supreme Court and also asked for the Supreme Court to reconsider its provisional ruling. On September 10, 2017, the Supreme Court issued a definitive decision on the merits of Plaintiff’s claim and reinstated Escobal’s mining license. The ruling also ordered MEM to consult with the Xinka indigenous communities within certain municipalities in the region of the Escobal mine within 12 months. Plaintiff and other interested parties appealed the Supreme Court’s decision reinstating the Escobal license to the Constitutional Court which heard the matter on October 25, 2017. The parties are awaiting a final ruling from the Constitutional Court on the definitive decision of the Supreme Court reinstating the license. For full details regarding this claim, see "General Development of Tahoe’s Business - Legal - Escobal License Suspension".

Annual Information Form for the Year Ended December 31, 2017 11

ESCOBAL EXPORT CREDENTIAL

In June 2017, the Company filed its annual request to renew the export credential with MEM. However, MEM did not renew the credential because its renewal had become contingent on the Supreme Court's reinstatement of the Escobal mining license. The credential therefore expired in August 2017. For full details regarding the status of Escobal’s export credential, see "General Development of Tahoe’s Business - Legal - Escobal Export Credential".

GUATEMALA ROADBLOCK

Since June 7, 2017, a group of protesters near the town of Casillas has blocked the primary highway that connects Guatemala City to San Rafael Las Flores and the Escobal mine. Operations were reduced between June 8 and June 19, 2017 to conserve fuel, and on July 5th were ultimately ceased following the Supreme Court’s provisional decision to suspend the Escobal mining license while the case against MEM was heard on the merits. MSR representatives have been pursuing engagement with community leaders, government agencies, and international mediation experts to develop a dialogue process aimed at resolving the protracted dispute and reaching a peaceful and expeditious conclusion to the roadblock. For full details regarding the status of the Guatemala roadblock, see "General Development of Tahoe’s Business - Legal - Guatemala Roadblock".

CLASS ACTION LAWSUITS

On July 7, 2017, the Company learned that three purported class action lawsuits were filed against Tahoe, and certain of its current and former officers and directors under Section 10(b) and Section 20(a) of the US Securities Exchange Act of 1934, as amended (the "US Exchange Act"), and Rule 10b-5, thereunder. The lawsuits were filed following the issuance of the provisional decision by the Guatemalan Supreme Court described above. See "General Development of Tahoe’s Business - Legal - Class Action Lawsuits".

ESCOBAL UNDERGROUND DEWATERING WELLS AND PUMP STATION

The construction of underground dewatering wells at Escobal on the 1190 level, currently the lowest production level in the mine, continued to advance in the first and second quarters of 2017. A total of seven dewatering wells were drilled. The first component of the newly constructed primary underground pump station, designed to handle clean water pumped from the underground dewatering wells, was commissioned in March 2017. The second component of the pump station will handle water impacted by mining operations. The pump station design and piping scheme maintains separation of clean water from impacted water to minimize the need for water treatment prior to discharge and to provide additional clean make-up water for operations as needed. The underground dewatering and pump station project was placed on hold during the third quarter of 2017.

SHAHUINDO PHASE 1 SOUTH WASTE ROCK DUMP

In the third quarter of 2017, the Company received Phase I permits for the operation of the Shahuindo Mine’s south waste rock dump which is now in use. The south waste rock dump has sufficient capacity to accommodate waste rock material mined from the Shahuindo pit through the end of 2018.

FENN-GIB

The Fenn-Gib deposit is an advanced stage exploration project located 80 kms east of Timmins. A 2011 Mineral Resource estimate contained 1.3 million ounces of gold (40.8 million tonnes at 0.99 g/t Au) in the Indicated category and 0.75 million ounces of gold (24.5 million tonnes at 0.95 g/t Au) in the Inferred category. During 2017, a total of 32,000 meters of surface infill drilling was completed in an effort to upgrade Inferred resources to the Indicated category and provide samples for metallurgical test work. Drilling largely confirmed previous geological interpretations and will be included in a new resource model in 2018. An additional 5,700 metres of surface drillingtested strike extensions up to 500 meters east and west of the current Fenn-Gib resource. The drilling encountered gold mineralization in both directions; however, additional drilling is required to determine the continuity of these mineralized zones. Due to the ongoing suspension of the mining operations in Guatemala, the Company curtailed much of the planned expenditures at Fenn-Gib, including work to establish a Preliminary Economic Assessment of the project.

WHITNEY

The Whitney project is a joint venture with Goldcorp for which the Company is the operator. The project comprises the Hallnor, Bonetal, C Zone and Broulan Reef zones covering approximately 8.9km² south approximately 4 km south of the Bell Creek Complex. Surface drilling at Whitney during 2017 concentrated on delineating and expanding the near surface resource as well as collecting material for metallurgical studies.

12 Tahoe Resources Inc.

In addition, drilling targeted the deeper #19 and #20 veins west of the historic Hallnor mine workings. This program succeeded in extending previously recognized veins 140 meters west and 200 metres to depth. An update to the Whitney model is currently underway. Future mine planning will consider open pit and underground mine alternatives.

DIVIDENDS DISTRIBUTIONS AND REINVESTMENT PLAN

The Company announced the cessation of the dividend and its dividend reinvestment plan, beginning August 8, 2017, due to the Escobal License Suspension. The dividend cessation is intended to protect the health of the Company’s balance sheet and to ensure the Company has financial flexibility.

2016 DEVELOPMENTS

LAKE SHORE ACQUISITION

On April 1, 2016, the Company completed the acquisition of Lake Shore pursuant to the Lake Shore Arrangement Agreement dated February 8, 2016. The Lake Shore Arrangement was approved by shareholders of the Company and the shareholders of Lake Shore on March 31, 2016 and received final court approval on April 1, 2016.

Pursuant to the terms of the Lake Shore Arrangement Agreement, Lake Shore became a wholly-owned subsidiary of the Company on April 1, 2016 and all of the issued and outstanding common shares of Lake Shore (each a “Lake Shore Share”) were transferred to the Company in consideration for the issuance by the Company of 0.1467 of a Tahoe Share for each Lake Shore Share. The Company filed a Business Acquisition Report in respect of the Lake Shore Arrangement on SEDAR on April 29, 2016.

REDEMPTION OF LAKE SHORE CONVERTIBLE DEBENTURES

Lake Shore had outstanding a class of 6.25% convertible unsecured debentures (the “Debentures”), which were governed by an indenture dated September 7, 2012, as supplemented effective April 1, 2016 (the “Indenture”). As a result of the Lake Shore Arrangement and in accordance with the terms of the Indenture, on conversion of the Debentures each debenture holder was entitled to receive Tahoe Shares (in lieu of Lake Shore Shares). Tahoe and Lake Shore entered into a supplement to the Indenture with Computershare Trust Company of Canada, as trustee, to, among other things, evidence Tahoe’s agreement to issue Tahoe Shares to any debenture holder upon conversion of the Debentures. An aggregate of 10,611,411 Tahoe Shares were issued pursuant to the exercise of conversion rights available to holders of the Debentures.

SHAHUINDO PREFEASIBILITY STUDY

The Company completed the Shahuindo Prefeasibility Study dated January 25, 2016. The Shahuindo Mine reached commercial production on May 1, 2016.

BELL CREEK ROYALTY

On July 5, 2016, the Company acquired from Goldcorp for $12.5 million in cash Goldcorp’s 2% net smelter return royalty related to production at the Bell Creek Mine.

2015 DEVELOPMENTS

RIO ALTO ACQUISITION

On April 1, 2015, the Company completed the acquisition of Rio Alto pursuant to the Rio Alto Arrangement Agreement dated February 9, 2015. The Rio Alto Arrangement was approved by shareholders of Rio Alto and received final court approval on March 30, 2015.

Pursuant to the terms of the Rio Alto Arrangement Agreement, Rio Alto became a wholly-owned subsidiary of the Company on April 1, 2015, as the Company acquired all of the issued and outstanding common shares of Rio Alto (each a “Rio Alto Share”) in exchange for 0.227 Tahoe Shares and the payment of CAD$0.001 for each Rio Alto Share. Additionally, outstanding options of Rio Alto were deemed to have been exchanged under the Rio Alto Arrangement, and the holders of Rio Alto options received options to purchase Tahoe Shares. In accordance with the terms of the outstanding warrants to purchase Rio Alto Shares, each holder was entitled to receive upon exercise, 0.227 Tahoe Shares and CAD$0.001 in cash in lieu of one Rio Alto Share. The Company filed a Business Acquisition Report in respect of the Rio Alto Arrangement on SEDAR on June 11, 2015.

Annual Information Form for the Year Ended December 31, 2017 13

SECONDARY OFFERING

On June 30, 2015, Goldcorp closed a secondary offering of 58,051,692 Tahoe Shares it beneficially held at an offering price of CAD$17.20 per share for gross proceeds of approximately CAD$1 billion. The Secondary Offering was completed through a syndicate of underwriters led by GMP Securities L.P. and BMO Nesbitt Burns Inc. The secondary offering resulted in the termination of Goldcorp’s rights under the shareholders’ agreement among the Company and affiliates of Goldcorp, which was last amended and restated on February 9, 2015.

INDEBTEDNESS

REVOLVING CREDIT FACILITY

On February 16, 2018, the Company closed its Second Amended and Restated Credit Facility with its bank syndicate providing the Company with full access to a $175 million revolving credit facility, which includes a $25 million accordion feature, for total access of $200 million in capital. The revised facility matures on July 19, 2021. This facility is structured on the strength of Tahoe’s gold business alone, and access to the facility does not rely on the operation of the Escobal Mine. The Bank of Nova Scotia and HSBC Securities (USA) Inc. are the co-leads for the facility, with The Bank of Nova Scotia acting as the administrative agent. The facility bears interest on a sliding scale of LIBOR plus between 2.25% to 3.25% or a base rate plus 1.25% to 2.25%, which is determined based upon the Company's consolidated net leverage ratio. Standby fees for the undrawn portion of the facility are also on a similar sliding scale basis of between 0.5063% and 0.7313%.The Second Amended and Restated Credit Facility superseded the $150 million revolving credit facility that the Company initially entered on August 10, 2015, and amended on July 18, 2017, with a syndicate of lenders.

CREDIT AGREEMENT LOAN

The Company’s 2016 credit agreement with an international bank in the aggregate amount of $35 million bore interest at LIBOR plus 2.25% on the portion drawn. The LIBOR rate was reset on July 10, 2017. The Facility had a two-year term with a maturity date of April 9, 2018. As a condition of closing the Second Amended and Restated Credit Facility, this credit agreement was terminated on February 20, 2018 with all amounts repaid from operating cash flows.

INTER-CORPORATE RELATIONSHIPS

Tahoe’s corporate structure as of the date of this AIF is as follows:

LEGAL

ESCOBAL LICENSE SUSPENSION

On May 24, 2017, an anti-mining organization (“Plaintiff”) filed a claim in the Supreme Court of Guatemala against MEM alleging that MEM violated the Xinka indigenous communities’ right of consultation in advance of granting the Escobal mining license to Tahoe’s Guatemalan subsidiary, Minera San Rafael ("MSR").

14 Tahoe Resources Inc.

On July 5, 2017, the Company was notified that the Supreme Court of Guatemala issued a provisional decision in respect of the action against MEM that suspended the Escobal mining license of MSR until the underlying civil claim was fully heard on the merits.

On July 14, 2017, the Company filed a legal action against the Guatemalan Supreme Court challenging jurisdiction and the irregular process that the Supreme Court followed in rendering its decision, both of which the court denied.

The Company filed a procedural challenge with the Constitutional Court, the highest court in Guatemala, regarding the assignment of judges of the Supreme Court and also asked for the Supreme Court to reconsider its provisional ruling. On July 28, 2017, the Supreme Court denied the Company’s motion for reconsideration and on August 29, 2017 the Constitutional Court issued a resolution denying the Company's appeal regarding the provisional ruling.

On September 10, 2017, the Supreme Court issued a definitive decision on the merits of Plaintiff’s claim and reinstated Escobal’s mining license. The ruling also ordered MEM to consult with the Xinka indigenous communities within certain municipalities in the region of the Escobal mine within 12 months, namely Casillas, Nueva Santa Rosa, Mataquescuintla and San Rafael Las Flores. In addition, the ruling allowed Escobal to restart operations immediately and to continue to operate during consultation. In response to a motion for clarification filed by MSR on August 26, 2017, the Supreme Court declined to review the Company’s request to order MEM to issue the annual renewal of Escobal’s export credential, which expired on August 8, 2017 due to the pending appeal with the Constitutional Court of the Supreme Court’s decision on September 10, 2017. Although Tahoe believes that MEM complied with ILO Convention 169 before it issued the Escobal license, it will fully support MEM in any of its future indigenous engagement to the extent it is permitted.

Plaintiff and other interested parties appealed the Supreme Court’s decision reinstating the Escobal license to the Constitutional Court which heard the matter on October 25, 2017. The parties are awaiting a final ruling from the Constitutional Court on the definitive decision of the Supreme Court reinstating the license.

Due to the delay of a decision from the Constitutional Court and inability of the Company to resume mining operations, the Company terminated 250 MSR employees on January 15, 2018. If the Constitutional Court issues a favorable ruling reinstating the Escobal mining license and Escobal resumes operation, Tahoe will seek to restore its workforce.

For additional details, refer to the press releases dated September 26, 2017, September 10, 2017, August 24, 2017 and July 5, 2017 available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov or on the Company’s website at www.tahoeresources.com.

ESCOBAL EXPORT CREDENTIAL

In June 2017, the Company filed its annual request to renew the export credential with MEM. However, MEM did not renew the credential because its renewal had become contingent on the Supreme Court's reinstatement of the Escobal mining license. The credential therefore expired in August 2017. After the Supreme Court reinstated the mining license in September 2017, MEM publicly stated to local press that the export credential could be legally renewed. However, contrary to such public declaration, in December MEM indicated in a written communication to MSR that it will not renew the credential given the pending ruling from the Constitutional Court. The Company expects that MEM will renew the export credential in the event of a positive ruling of the Constitutional Court on the appeal reinstating the license.

GUATEMALA ROADBLOCK

Since June 7, 2017, a group of protesters near the town of Casillas has blocked the primary highway that connects Guatemala City to San Rafael Las Flores and the Escobal mine. Operations were reduced between June 8 and June 19, 2017 to conserve fuel, and on July 5th were ultimately ceased following the Supreme Court’s provisional decision to suspend the Escobal mining license while the case against MEM was heard on the merits. While some of the protestors are residents of Casillas, which is 16 kilometers from the mine, many more are from outside the municipality. The Company has reason to believe that the blockade is politically motivated and is being substantially funded by anti-mining groups. As the roadblock continued, some protestors became increasingly violent. Following the September 10, 2017 court ruling that reinstated the Escobal mining license, the Company attempted to transport supplies to the mine site. Protesters blocked the passage of company vehicles and attacked the truck drivers and trucks. On a separate occasion, a helicopter attempting to deliver fuel to the mine was shot at from the ground.

MSR representatives have continued to engage with community leaders, government agencies, and international mediation experts aimed at resolving the protracted dispute and reaching a peaceful and expeditious conclusion to the roadblock, and have made significant headway in recent weeks.

Annual Information Form for the Year Ended December 31, 2017 15

CLASS ACTION LAWSUITS

On July 7, 2017, the Company learned that three purported class action lawsuits were filed against Tahoe, and certain of its current and former officers and directors under Section 10(b) and Section 20(a) of the US Securities Exchange Act of 1934, as amended (the "US Exchange Act"), and Rule 10b-5, thereunder. The lawsuits were filed in three different federal courts and all generally allege that the Company made untrue statements of material facts or omitted to state material facts or engaged in acts that operated as a fraud upon the purchasers of the Company's stock. The lawsuits were filed following the issuance of the provisional decision by the Guatemalan Supreme Court described above. The suits allege compensatory damages, interest, fees and costs. The Company expects the cases to be transferred to one court so that they can be consolidated and a lead plaintiff can be appointed to represent the purported class members. The Company disputes the allegations raised and will vigorously defend the lawsuits, the outcome of which is not determinable at this time.

MEM’S HEARING OF WRITTEN OPPOSITIONS

On July 23, 2013, the Court of Appeals in Guatemala (the “Appeals Court”) held that MEM should have conducted a hearing of a written opposition to the Escobal Mine Exploitation License (“Opposition”) during the permitting application process. The Appeals Court did not rule on the substance or validity of the license but stated that MEM was obligated to hold an administrative hearing addressing the substance of the Opposition under the 1997 Mining Law. MEM issued a press release on July 24, 2013 stating that the ruling had no impact on the status of the Company’s exploitation license. On July 25, 2013, MEM and the Company appealed the Appeals Court’s decision to the Constitutional Court and the Constitutional Court upheld the Appeals Court’s decision, compelling MEM to conduct a hearing on the Opposition that MEM already found to be without merit. The claimants subsequently requested a clarification from the Constitutional Court, which the Constitutional Court denied in early May 2016.

In June 2016, MEM commenced the hearing process and then suspended it indefinitely as a result of an administrative file issue. In August 2016, claimant presented a request to the Appeals Court to suspend the exploitation license. The Appeals Court denied claimant’s request. Claimant appealed that ruling to the Constitutional Court, which was denied. The administrative issue has now been resolved and there do not appear to be remaining impediments to the hearing process proceeding. The Opposition involves dated claims of prospective environmental harm (no such harm has materialized since production at Escobal began three years ago) and new claims of inadequate consultation.

GARCIA ET AL. V. TAHOE

On June 18, 2014, seven plaintiffs filed an action against the Company in the Supreme Court of British Columbia alleging battery and negligence regarding a security incident that occurred at the Escobal Mine on April 27, 2013. The plaintiffs seek compensatory and punitive damages.

Tahoe challenged the claim in June 2014 based on jurisdictional issues, and the Court issued a judgment in Tahoe’s favor in November 2015 ruling the case should be heard in Guatemala. The plaintiffs appealed the decision to the Court of Appeal for British Columbia, which reversed the decision in January 2017, allowing the legal claims filed by the Guatemalan plaintiffs to be heard in British Columbia. Tahoe filed an application for leave to appeal the issue to the Supreme Court of Canada, which was dismissed on June 8, 2017. In April 2017, three of the seven plaintiffs settled with the Company. The case of the four remaining plaintiffs will now be heard in the Supreme Court of British Columbia.

DESCRIPTION OF TAHOE'S BUSINESS

OVERVIEW OF TAHOE'S BUSINESS AND STRATEGY

Tahoe’s strategy is to responsibly and profitably operate the Escobal, La Arena, Shahuindo, Bell Creek and Timmins West Mines to international standards and develop and operate high quality precious metals assets in the Americas. We are committed to sustainable development and to providing significant long-term benefits from our operations to our host communities and governments. Tahoe’s principal objectives at this time are to secure the operating license in Guatemala and resume production, optimize the Company’s current operations and continue expanding the Mineral Resource and Mineral Reserve base through exploration and development of the Escobal, La Arena, Shahuindo, Bell Creek and Timmins West ore bodies and other mineral deposits identified in those regions.

Tahoe will continue to identify, investigate and, where appropriate, acquire interests in mineral properties in the Americas through direct application to government authorities, joint venture activities or acquisition from existing holders. As part of this process, the Company will undertake early-stage exploration activities to ensure

16 Tahoe Resources Inc.

an orderly and steady development of exploration targets. For details on La Arena II, see "General Development of Tahoe’s Business - Development of Tahoe’s Business - 2018 Developments - La Arena II".

The following map shows the locations of Tahoe’s producing mineral properties.

THE GOLD INDUSTRY

Demand for gold is primarily based on global investment demand, central bank holdings and jewelry. Saving and disposal play a larger role in the price of gold than does consumption. The metal is also used for coinage, and has been used as a standard for monetary systems in some countries.

Gold prices will have a direct impact on Tahoe’s business. Declining prices can, for example, impact operations by requiring a re-assessment of the feasibility of a particular project. See "Description of Tahoe’s Business - Risk Factors Relating to Tahoe’s Business". A chart indicating gold prices since January 1, 1999, is set out below.

As of January 31, 2018, the London Fix price of gold was US$1,345.05.

Annual Information Form for the Year Ended December 31, 2017 17

THE SILVER INDUSTRY

Demand for silver is based on investment demand, industrial and decorative uses, photography, jewelry and silverware. Together, these categories represent more than 90% of annual silver consumption.

Silver has a number of unique properties including its strength, malleability and ductility, its electrical and thermal conductivity, its sensitivity to and high reflectance of light, and its ability to endure extreme temperature ranges. Silver’s unique properties restrict its substitution in most applications.

Silver prices will have a direct impact on Tahoe’s business. Declining prices can, for example, impact operations by requiring a re-assessment of the feasibility of a particular project. See "Description of Tahoe’s Business - Risk Factors Relating to Tahoe’s Business". A chart indicating silver prices since January 1, 1999, is set out below.

As of January 31, 2018, the London Fix price of silver was US$17.23.

PRODUCT

The Company produces metal-bearing concentrates and gold doré. At Escobal, silver, gold, lead and zinc are recovered by differential flotation, producing silver-rich lead concentrates and zinc concentrates which are sold to third-party smelters under concentrate sales arrangements. Silver sales at Escobal for the year ended December 31, 2017 totaled $170.5 million, and for the year ended 2016 totaled $316.8 million. No revenues from the sale of by-product metals (gold, lead, zinc) exceeded 15% of the total consolidated revenue. Gold doré is refined and sold to third parties (principally international bullion banks and traders) under refining, sales and purchase agreements. At La Arena, gold doré is produced through a cyanide leach solution and carbon absorption system. Gold sales at La Arena for the year ended December 31, 2017 totaled $233.3 million, and for the year ended 2016 totaled $244.4 million. At Shahuindo, a cyanide leach solution and carbon absorption system is used to pour gold doré, which first occurred in December 2015. Commercial production began at Shahuindo in the second quarter of 2016. Gold sales at Shahuindo for the year ended December 31, 2017 totaled $93.5 million, and for the year ended 2016 totaled $47.2 million (gold sold prior to declaration of commercial production was credited against construction capital). Ore from the Bell Creek and Timmins West Mines is processed at the Bell Creek Mill. Gold doré is produced using carbon-in-pulp and carbon-in-leach recovery systems. The loaded solution from the strip circuit is passed through two electro-winning cells in the refinery where gold doré is poured and then sold to third parties under refining, sales and purchase agreements. Sales from the Bell Creek and Timmins West Mines for the year ended December 31, 2017 totaled $211.7 million, and for the year ended 2016 totaled $137.1 million (sales for the Bell Creek and Timmins West Mines commenced April 1, 2016 following the acquisition of Lake Shore).

18 Tahoe Resources Inc.

SPECIALIZED SKILL AND KNOWLEDGE

Most aspects of Tahoe’s business require specialized skills and knowledge in the areas of geology, engineering, exploration and development, environmental management, sustainability and accounting. Tahoe has a number of employees with extensive experience in mining, engineering, geology, exploration and development and sustainability in Guatemala, Peru and Canada, including C. Kevin McArthur, Executive Chair, Ronald W. Clayton, President and Chief Executive Officer, Brian Brodsky, Vice President Exploration, Charlie Muerhoff, Vice President Technical Services, Mark Sadler, Vice President Projects Development, Tom Fudge, Vice President Operations, Edie Hofmeister, Executive Vice President Corporate Affairs & General Counsel, Phil Dalke, Vice President Operations Peru, Dave Howe, Vice President Operations Guatemala and Peter Van Alphen, Vice President Operations Canada. In addition, Tahoe’s management team has extensive experience in accounting and finance, including Vice President and Chief Financial Officer Elizabeth McGregor and Vice President and Controller Ryan Snow.

Mr. McArthur is an experienced mining engineer with over 35 years of engineering, mine building and mine operations experience, including over six years as Chief Executive Officer of the Company, where he and the Company’s experienced executive team built, acquired and operated world class mines in the Americas. Mr. McArthur currently serves as the Company’s Executive Chair. Previously, he served eight years in the role of President and Chief Executive Officer of Glamis Gold Ltd. and two years in the role of President and Chief Executive Officer of Goldcorp. Mr. Clayton is a seasoned mining executive and mining engineer with more than 35 years of experience operating mines. He served as the Company’s first Chief Operations Officer beginning in 2010 and became the Company’s Chief Executive Officer in 2016. He was Senior Vice President, Operations, for Hecla Mining Company before joining the Company. Messrs. McArthur, Clayton, Brodsky, Muerhoff, Fudge, Dalke, Howe and Van Alphen have substantial underground and open pit mining experience, including significant Latin American and Canadian operating experience. Mr. Muerhoff is a Qualified Person as defined by NI 43-101 and has worked in the mining industry for over 25 years.

EMPLOYEES

As of February 1, 2018, Tahoe Resources USA employed 29 people in Reno, Nevada, MSR employed 780 people in Guatemala, Tahoe Peru employed 1,200 people in Peru, and Tahoe Canada employed 675 people in Canada.

FOREIGN OPERATIONS

The Escobal Mine is located in Guatemala and the La Arena and Shahuindo Mines are located in Peru. As such, these operations are exposed to various levels of political, economic and other risks and uncertainties associated with operating in a foreign jurisdiction. See "Description of Tahoe’s Business - Risk Factors Relating to Tahoe’s Business - Operations in Guatemala, Peru and Canada", "- Obtaining and Renewing Licenses and Permits", "- Licenses and Title to Assets", and "- Governmental Laws and Regulation".

COMPETITIVE CONDITIONS

Tahoe competes with other entities in the search for and acquisition of mineral properties. As a result of this competition, the Company may be unable to acquire attractive properties in the future on terms it considers acceptable. Tahoe also competes for financing with other resource companies. There is no assurance that additional capital or other types of financing will be available to Tahoe if needed, or that, if available, the terms of such financing will be favourable to the Company. See "Description of Tahoe’s Business - Risk Factors Relating to Tahoe’s Business - Competition for New Properties", and "- Financing Requirements".

PRODUCTION

The Company recovered 445.9 thousand ounces of gold and 9.9 million ounces of silver in 2017 from the Escobal, La Arena, Shahuindo, and Timmins operations, with minor amounts of lead and zinc produced from the Escobal Mine. Metal produced by mine in 2017 is summarized in the table below:

Annual Information Form for the Year Ended December 31, 2017 19

TAHOE RESOURCES 2017 MINE PRODUCTION
Operation	Gold (koz)	Silver (koz)	Lead (ktonnes)	Zinc (ktonnes)
Escobal1	4.3	9,692	4.2	6.1
La Arena	195.6	34	—	—
Shahuindo	79.0	116	—	—
Timmins	167.0	21	—	—
Total	445.9	9,863	4.2	6.1

¹  Escobal production includes gold, silver and lead recovered to lead concentrate and gold, silver and zinc recovered to zinc concentrate.

The majority of precious metals produced at the Escobal mine are recovered into lead concentrates, with lesser amounts recovered to zinc concentrates. All precious metals produced from the La Arena, Shahuindo and Timmins mines are recovered in doré.

MINERAL RESERVES AND MINERAL RESOURCES

As of January 1, 2018 the Company’s Measured and Indicated Mineral Resources total 14 million ounces of gold, 403 million ounces of silver, 5.8 billion pounds of copper, 256 thousand tonnes of lead and 427 thousand tonnes of zinc. Metal contained in Mineral Resources for each of the Company’s operating and exploration/development properties is summarized in the following tables. A complete description of each property’s Mineral Resources is included in the individual property descriptions contained in this AIF.

OPERATING PROPERTIES - MINERAL RESOURCES AS OF JANUARY 1, 2018
Operation	Resource Classification	Gold (koz)	Silver (koz)	Lead (ktonnes)	Zinc (ktonnes)
Escobal Mine	Measured	51	58,104	33	58
	Indicated	337	316,520	224	369
	Inferred	54	10,746	4	8
La Arena Mine	Measured	3	—	—	—
	Indicated	640	—	—	—
	Inferred	4	—	—	—
Shahuindo Mine	Measured	1,358	16,807	—	—
	Indicated	921	11,122	—	—
	Inferred	2,500	46,980	—	—
Timmins West Mine	Measured	39	—	—	—
	Indicated	885	—	—	—
	Inferred	133	—	—	—
Bell Creek Mine	Measured	167	—	—	—
	Indicated	569	—	—	—
	Inferred	415	—	—	—
Total	Measured	1,618	74,911	33	58
	Indicated	3,351	327,642	224	369
	Meas + Ind	4,969	402,552	256	427
	Inferred	3,106	57,726	4	8

Totals may not sum due to rounding.

20 Tahoe Resources Inc.

EXPLORATION & DEVELOPMENT PROPERTIES MINERAL RESOURCES AS OF JANUARY 1, 2018
Operation	Resource Classification	Gold (koz)	Copper (mlbs)
La Arena II	Measured	1,265	1,279
	Indicated	4,372	4,511
	Inferred	683	349
Fenn-Gib	Measured	—	—
	Indicated	1,300	—
	Inferred	750	—
Gold River	Measured	—	—
	Indicated	117	—
	Inferred	1,028	—
Juby	Measured	—	—
	Indicated	1,090	—
	Inferred	2,909	—
Whitney	Measured	218	—
	Indicated	491	—
	Inferred	171	—
Marlhill	Measured	—	—
	Indicated	57	—
	Inferred	—	—
Vogel/Schumacher	Measured	—	—
	Indicated	125	—
	Inferred	169	—
Total	Measured	1,483	1,279
	Indicated	7,553	4,511
	Meas + Ind	9,036	5,790
	Inferred	5,709	349

Totals may not sum due to rounding.

TOTAL MINERAL RESOURCES AS OF JANUARY 1, 2018
Resource Classification	Gold (koz)	Silver (koz)	Copper (mlbs)	Lead (ktonnes)	Zinc (ktonnes)
Measured	3,101	74,911	1,279	33	58
Indicated	10,904	327,642	4,511	224	369
Meas + Ind	14,005	402,552	5,790	256	427
Inferred	8,816	57,726	349	4	8

Totals may not sum due to rounding.

As of January 1, 2018 the Company’s Proven and Probable Mineral Reserves totaled 4 million ounces of gold, 288 million ounces of silver, 196 thousand tonnes of lead and 320 thousand tonnes of zinc. Metal contained in Mineral Reserves for each of the Company’s operating mines is summarized in the following table. A complete description of each property’s Mineral Reserves is included in the individual property descriptions contained in this AIF.

Annual Information Form for the Year Ended December 31, 2017 21

MINERAL RESERVES AS OF JANUARY 1, 2018
Operation	Resource Classification	Gold (koz)	Silver (koz)	Lead (ktonnes)	Zinc (ktonnes)
Escobal Mine	Proven	34	39,532	26	44
	Probable	244	224,961	170	276
	Prov + Prob	278	264,493	196	320
La Arena Mine	Proven	3	—	—	—
	Probable	565	—	—	—
	Prov + Prob	568	—	—	—
Shahuindo Mine	Proven	1,203	14,756	—	—
	Probable	704	8,384	—	—
	Prov + Prob	1,907	23,140	—	—
Timmins West Mine	Proven	47	—	—	—
	Probable	606	—	—	—
	Prov + Prob	654	—	—	—
Bell Creek Mine	Proven	68	—	—	—
	Probable	246	—	—	—
	Prov + Prob	315	—	—	—
Total	Proven	1,356	54,288	26	44
	Probable	2,366	233,345	170	276
	Prov + Prob	3,721	287,633	196	320

Totals may not sum due to rounding.

ENVIRONMENTAL AND SOCIAL ACTIVITIES

The Company is committed to conducting business honestly and ethically everywhere it operates. Tahoe aspires to deliver long term shareholder value through sustainable economic and social development in the communities where the Company works. Tahoe strives to minimize the environmental effects of its operations, to provide a safe and healthy workplace for all its employees and contractors and to promote sustainable businesses and social programs in the communities where it operates.

ENVIRONMENT

Tahoe is dedicated to the highest standards of responsible environmental stewardship. The Company honours this commitment by striving to meet or exceed local governmental regulations and aligning its policies and practices with pertinent international guidelines. Tahoe has environmental management processes in place which are designed to prevent or minimize environmental impacts, to implement mitigation measures where appropriate, and to improve its environmental performance. Tahoe’s Board of Directors oversees the Company’s environmental management through the Health, Safety, Environment and Community Committee and reviews site performance on a quarterly basis. Tahoe’s Sustainability Committee, chaired by Tahoe’s Executive Chair, and comprised of executive management and site leaders, oversees environmental and other social matters related to each operation on a quarterly basis. Tahoe’s Health, Safety, Environment and Community Committee receives quarterly reports from the Sustainability Committee in monitoring the effectiveness of health, safety, environmental, community relations and sustainability policies and programs at Tahoe operations.

In Guatemala, an environmental mitigation study must be filed with MEM before undertaking reconnaissance or exploration activities. In addition, an Environmental Assessment must be filed with the Ministry of Environment and Natural Resources (“MARN”) for approval prior to undertaking exploration activities. In order to obtain the Escobal exploitation license, MSR prepared an Environmental Impact Study for review and approval by MARN. Upon grant of the exploitation license in April 2013, the Company also arranged for the issuance of a bond for environmental protection and obtained an environmental license pursuant to Guatemalan regulations.

MSR conducts continuous environmental monitoring in and around the local communities surrounding Escobal to determine the quality of the air, water and stream sediments and to measure vibration, sound pressure levels, rock geochemistry and biology. MSR reports these findings to MARN on a quarterly basis to ensure compliance with applicable environmental laws, regulations and standards. Environmental awareness programs offer instruction to MSR employees and contractors on environmental conservation and mitigation.

22 Tahoe Resources Inc.

The Company also works with national and international non-governmental organizations on community needs assessments to guide further programs in the vicinity of the Escobal Mine.

In Peru, the General Mining Law sets forth the environmental regulation of exploration and mining activities for the country, which is administered by MEM. Generally, MEM requires exploration and mining companies to prepare an Environmental Impact Assessment - Category I, Environmental Impact Study Semi Detailed (EIAsd) - Category II, an Environmental Impact Assessment, a Program for Environmental Management and Adjustment, and a mine closure plan.

Tahoe’s operations at La Arena and Shahuindo are designed to minimize and mitigate environmental impacts in accordance with applicable laws, rules and regulations. These operations are committed to meeting and/or exceeding high environmental standards, including flora and fauna preservation, progressive rehabilitation and water quality protection. Each operation diligently conducts biological and hydro-biological monitoring and examines surface and ground water, noise, blasting and vibrations, dust and other emissions to air, waste disposal and erosion control and reports those findings to Peru’s MEM on a quarterly basis. Moreover, La Arena and Shahuindo collaborate with local villages in their direct areas of influence to sample and monitor water at least biannually. La Arena and Shahuindo minimize or mitigate environmental impacts by working to adhere to the programs as outlined in the approved EIAs and by providing ongoing training to staff to manage environmental matters. The Company’s reclamation projects are financially supported by bonds or letters of credit.

In Canada, exploration activities are regulated through the provincial Mining Act and the Ministry of Northern Development and Mines (“MNDM”). All exploration proposals are forwarded to the MNDM for approval. In order to ensure the consultation processes have been fulfilled for proposed projects, scopes for potential exploration projects are forwarded to the local First Nations communities for review.

Monitoring programs include, but are not limited to, monitoring of industrial sewage, water, air, dust, noise, vibration and waste generating materials. Effluent samples are collected at least weekly and monitoring data and site activities are reported annually to appropriate government agencies. In addition to complying with provincial legislation requiring effluent monitoring, the operations also comply with the Metal Mining Effluent Regulation and Environmental Effects Monitoring, which require detailed studies of the receiving waters of the Bell Creek and Timmins West Mines. These studies include aquatic, sediment and benthic analysis, fisheries assessments and flora and fauna evaluations performed on a three year cycle, which are used to measure potential effects to the waters, if any.

Both the Bell Creek and Timmins West Mines have also implemented water management strategies focused on diverting clean water from the site and treating any and all water used at the site prior to discharge into the natural environment. All reclamation work is approved by MNDM and financially supported with bonds or letters of credit.

RECLAMATION

The total provision for reclamation and closure cost obligations at December 31, 2017 was approximately $63 million. In determining the discount rate to be used in the calculations of the present value of the future reclamation obligations, the Company combines risk and inflation rates specific to the country in which the reclamation will take place. The discount rates used in the calculations were between 2.06% and 6.18%. The undiscounted value of this liability is estimated to be approximately $93 million. Reclamation expenditures for the year ended December 31, 2017 were $2.9 million.

For further details regarding environmental matters, see Environment above and the disclosure regarding environmental matters under the respective descriptions of the Company’s material properties.

SUSTAINABILITY

Tahoe Resources embraces sustainability as a way to conduct honest and ethical business, work to the highest standards of environmental stewardship, and promote the health, safety and wellbeing of its employees and communities at all of its operations. Tahoe’s integrated approach to sustainability is intended to promote responsible and well-managed mining operations and to bring significant value to its stakeholders.

Tahoe’s second annual Sustainability Report was published in July 2017 and provides comprehensive information about the Company’s economic, environmental and societal impacts as identified by the latest Global Reporting Initiative Standards. The Sustainability Report can be found on the Company’s website at www.tahoeresources.com.

Annual Information Form for the Year Ended December 31, 2017 23

DOING BUSINESS IN GUATEMALA, PERU AND CANADA

MINING IN GUATEMALA

The Escobal Mine is located in Guatemala. The State of Guatemala owns all mineral deposits within Guatemala. MEM may grant reconnaissance, exploration and exploitation licenses to any entity, whether Guatemalan or foreign. Applications for licenses are typically granted on a first-time basis, with holders of reconnaissance licenses given priority for an exploration license (over portions of the area covered by the reconnaissance license) and holders of exploration licenses given priority for an exploitation license (over portions of the area covered by the exploration license), so long as applications are made before the expiration of the existing license. Mineral licenses are “coordinate staked” (filed only referenced to Universal Transverse Mercator coordinates) and no monuments are located on the ground. No physical survey of exploration license boundaries is required.

License holders may use water, so long as such use does not affect the permanent exercise of water rights by others, and subject to the requirement that mining operations must not contaminate the environment. Licensees are also granted rights of way, including the right to build roads, with the proviso that surface owners be compensated.

MEM may suspend mining rights for, among other things, safety and environmental concerns or failure to pay royalties or to submit reports when due; may cancel mining for, among other things, failure to commence field work or operations in the prescribed time; and may extinguish mining rights upon expiration of the license term, depletion of the deposit or express renouncement of the holder. Fees payable by licensees include surface rights fees, a granting fee for a mining right and an area fee for the licenses.

Under the 1997 Guatemalan mining law, a mandatory royalty of 1% is payable at the exploitation stage and shared equally between the State and the municipality where the project is situated. The royalty is determined by an affidavit of the volume of the marketed product from mining operations and is based on the value of sale consigned in the national market or international exchange. On January 26, 2012, the Guatemalan administration and the Mining Industry Association agreed to general terms in a royalty agreement that resulted in the industry voluntarily paying higher royalties to the federal and local governments. On April 16, 2013, the Company executed an initial voluntary royalty agreement and subsequently entered into amended voluntary royalty agreements (“Escobal Voluntary Royalty Agreements”) with six municipalities in the area in which Escobal is located.

Together with the 1997 Guatemalan mining law, the Escobal Voluntary Royalty Agreements committed the Company to pay a 5% NSR royalty on the concentrates sold from Escobal Mine production. Under the Escobal Voluntary Royalty Agreements, such payments were allocated as follows: 2% benefits to the San Rafael Las Flores communities, 2% benefits to the federal government and 1% benefits to certain outlying municipalities.

In January 2017, new Voluntary Royalty Agreements were entered into with three municipalities. After the Escobal license suspension in July 2017, all of the Escobal Voluntary Royalty Agreements were terminated according to their terms.

MINING IN PERU

Peru has rich deposits of copper, gold, silver, lead/zinc and natural gas and petroleum. It is a leader in the mining industry and one of the world’s largest producers of base and precious metals. Peru is one of the three largest producers of copper and zinc in the world. It is also a major producer of gold, silver and other minerals. Peru’s mining sector is thriving due to an abundance of rich natural resources, a strong mining culture and an attractive legal and tax regime.

In Peru, the General Mining Law allows mining companies to obtain clear and secure title to mining concessions. The surface land property is distinct from the natural resource. The government retains ownership of all subsurface land and mineral resources, but the titleholder of the concessions retains ownership of extracted mineral resources. Peruvian law requires that all operators of mining areas have an agreement with the owners of the land surface above the mining rights or to establish an easement upon such surface for mining purposes. The same mining concession is valid for exploration and for exploitation.

Mining rights in Peru can be transferred by their private holders with no restrictions or requirements other than to register the transaction with the Public Mining Register. The sale of mineral products is also unrestricted, so there is no obligation to satisfy the internal market before exporting products.

24 Tahoe Resources Inc.

Peru has enacted a regime of environmental laws whereby MEM and the Environmental Ministry have issued regulations mandating environmental standard for the mining industry. Under these standards, new mining development and production requires mining companies to file and obtain approval for an Environmental Impact Study (“EIS”), which incorporates technical, environmental and social matters, before being authorized to commence operations.

The Environmental Evaluation and Oversight Agency (“OEFA”) monitors environmental compliance. OEFA has the authority to carry out audits and levy fines on companies if they fail to comply with prescribed environmental standards. The following permits are generally needed for a project: Certificate for the Inexistence of Archaeological Remains (CIRA); Environmental Impact Assessment (EIA); Mine Closure Plan; Establishment of a financial guarantee for closure; Beneficiation Concession; Mining Transportation Concession; Permanent Power Concession; Water Usage Permits; Easements and Rights-of-way; District and Provincial Municipality Licenses and Construction and Operation Permits.

MINING IN CANADA

Mining is one of Canada’s primary industries and involves the extraction, refining and processing of important mineral products such as gold, silver, platinum, iron, copper, lead, zinc and nickel. Canada’s mining industry represents approximately three percent of the country’s gross domestic product. Mining’s importance to the overall economy and employment remains significant, particularly in the northern part of provinces such as Ontario, British Columbia, Saskatchewan and Quebec and territories such as the Yukon and Northwest Territories. Canada remains one of the world’s leading mining countries and has become the centre of global mining finance and expertise. The TSX and TSX Venture stock exchanges have become world centres for investment in mining and mining exploration companies.

In Canada, environmental laws are divided between federal and provincial governments. Federal legislation enacted related to the environment includes the Canadian Environmental Protection Act, the Canadian Environmental Assessment Act and the Fisheries Act and the Arctic Waters Pollution Prevention Act. The powers of the provincial governments cover all matters of local nature and property and civil rights within the provinces, with primary jurisdiction over matters including mining. The provinces also have primary jurisdiction over agriculture, forestry, mining and hydroelectric development.

In Ontario, the MNDM oversees the mineral sector and is responsible for permitting mining operations in that province under the Mining Act. MNDM administers and maintains land tenure, mining claims and geoscience information. There are various forms of mineral tenure in Ontario, consisting principally of unpatented mineral claims, mining leases and freehold lands (including patented mineral claims).

Unpatented mineral claims and mining leases available in respect of public lands held by the Crown that are open for exploration are governed by the Mining Act (Ontario) and administered by MNDM. Unpatented mineral claims do not grant the holder any real property interest in the lands comprising such claims. The holder of claims may conduct certain limited exploration work with respect to such claims after staking and registration. Thereafter, if the holder wishes to carry out more extensive exploration work and/or move to production, the holder has the right to obtain a mining lease with respect to such claims. The holder is required to complete and file annual assessment work as prescribed under the Mining Act. Failure to complete the requisite assessment work will result in the forfeiture of the unpatented claims back to the Crown (subject to certain relief provisions included in the Mining Act). No minerals may be extracted from lands that are the subject of an unpatented mining claim; the holder must have a mining lease or a freehold interest to mine the land. Subject to due registration and the payment of applicable fees, an unpatented mining claim can be transferred, charged or mortgaged by the holder without obtaining any consents.

A mining lease entered into by a mineral claims holder with the Crown creates a leasehold real property interest in favour of the lessee. Mining leases grant an exclusive right to the lessee to enter upon, search for, and extract minerals from the land, subject to the lessee obtaining other required permits and compliance with applicable regulations, including those prescribed by the Ontario Ministry of Natural Resources (“MNR”) and the Ontario Ministry of the Environment. Typically, mining leases are for a term of 21 years, include renewal provisions, are subject to annual lease payments and may cover mining and surface rights or solely mining rights. A mining lease cannot be transferred or mortgaged by the lessee without the prior consent of the MNDM. To obtain consent of the MNDM, the lessee must submit appropriate documentation and pay fees.

The owner of freehold lands holds a fee simple real property interest. Historically, the holder of a mining claim interested in removing minerals from the ground could, instead of obtaining a mining lease, apply to the MNR to acquire the freehold interest in the subject lands by way of the issuance of a mining patent. Mining patents may include surface and mining rights or solely mining rights and vest in the patentee all of the Crown’s title to the subject lands and to all mines and minerals relating to such lands, subject to any reservations set out in the patent (as may be varied by the Public Lands Act (Ontario)). New issuances of mining patents have

Annual Information Form for the Year Ended December 31, 2017 25

been replaced by issuances of mining leases. Freehold lands and patented claims are subject to annual provincial mining taxes and, where surface rights are held, provincial mineral land taxes. As the holder of a mining patent enjoys the freehold interest in the lands, no consent from the MNDM is required for the patentee to transfer or mortgage those lands.

FOREIGN INVESTMENT

Applicable Guatemalan, Peruvian and Canadian law guarantees equal treatment and enjoyment of constitutional rights to foreign and local investors in certain areas including, but not limited to, private property, expropriation and importing. Foreign investors are permitted to participate in any legal economic activity, including provision of capital to companies incorporated in Guatemala, Peru and Canada and repatriation of capital out of Guatemala, Peru and Canada.

TAXATION

Income Tax

Income tax must be paid on income generated in Guatemala and may be paid either under the Regime on Profits or the optional regime. After tax legislation was passed in early 2012, the Regime on Profits was changed from a rate of 31% of net income (total income less exempt income less deductible costs and expenses) paid quarterly and liquidated on an annual basis. The new regime went into effect January 1, 2013. The rate was 28% in 2014 and was 25% in 2015 and thereafter. The optional regime rate was 6% of taxable income (total income less exempt income) paid monthly which increased to 7% in 2014 and thereafter. Corporations must adopt one of the two regimes and commit to a regime each December. After assessing the individual impact of each regime on earnings attributable to common shareholders, Tahoe adopted the optional regime for 2015, 2016 and 2017. Failure to make income tax payments results in a penalty of 100% of the unpaid tax, plus interest.

Companies incorporated in Peru are subject to income tax on their worldwide taxable income, while foreign companies that are located in Peru and non-resident entities are taxed on income from Peruvian sources only. The corporate income tax was reduced from 30% in 2014 to 28% in 2015 and 2016. In general terms, mining companies in Peru are subject to the general corporate income tax regime. If the taxpayer has elected to sign a stability agreement, an additional 2% premium is applied on the regular corporate income tax rate. The Company elected not so sign a stability agreement. Also, 50% of income tax paid by a mine to the Central Government is remitted as “Canon,” by the Central Government back to the regional and local authorities of the area where the mine is located. In December 2016, Peru enacted tax reform that became effective January 1, 2017. The tax reform increased the corporate income tax rate from 28% to 29.5% for tax year 2017 and thereafter.

Corporations resident in Canada (whether owned by Canadians or non-residents) are taxed on their worldwide income from all sources, including income from business or property and net taxable capital gains. Corporations are taxed by the federal government and by one or more provinces or territories. The basic rate of federal corporate tax for 2017 was 38%, but was reduced to 15% by an abatement of ten percentage points on a corporation’s taxable income earned in a province or territory and a general rate reduction of 13 percentage points on a corporation’s full-rate taxable income. Provincial and territorial tax rates are added to the federal tax and generally vary between 10% and 16% of taxable income. 

Other Taxes

Effective January 1, 2009, corporations and enterprises domiciled in Guatemala must pay on a quarterly basis, the Impuesto de Solidaridad, (“ISO”) included in Decree 73-2008. The ISO amount is calculated at the rate of 1% of the greater of (i) the amount resulting after subtracting from total assets, the fiscal credits (resolved through resolution), reserve for doubtful accounts, accumulated depreciation and amortization for the last fiscal year, and (ii) gross income for the last fiscal year. The ISO may be taken as a credit against the income tax to be paid by the corporation. Taxpayers operating under the optional regime are ISO exempt.

The Special Mining Tax (“SMT”) in Peru is a tax imposed in parallel with the Modified Mining Royalty described below. The SMT is applied on operating mining income based on a sliding scale, with progressive marginal rates ranging from 2% to 8.4%. The tax liability arises and becomes payable on a quarterly basis. The SMT applies on the operating profit derived from sales of metallic mineral resources, regardless of whether the mineral producer owns or leases the mining concession.

In Canada, Ontario mining tax is imposed on profits from the extraction of mineral substances raised and sold by operators of Ontario mines. The tax rate on taxable profit subject to mining tax for the Company’s Canadian mine is 10%. The tax is applied to an operator’s annual profit in excess of a $500,000 annual deduction, which needs to be shared by associated corporations.

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Royalties

Up to December 31, 2014, the Company paid a 5% net smelter return (“NSR”) royalty (1% statutory, 4% voluntary) on the concentrates sold from the Escobal Mine production. The Guatemalan government attempted to increase the royalty to a 10% NSR, effective January 1, 2015. However, on November 5, 2015, the Guatemalan Constitutional Court formally ruled that the 10% royalty was unconstitutional. The Company continued to pay a 5% NSR royalty (1% statutory, 4% voluntary) throughout 2015, 2016 and until the Escobal suspension in 2017 when the voluntary royalty agreements were canceled.

In 2004, Peru implemented a mining royalty that required holders of mining concessions to pay between 1% and 3% of the commercial value of sales, based on a three step sliding scale, to the Peruvian government, for the exploitation of metallic and non-metallic mineral resources. This regime was replaced by the Modified Mining Royalty (“MMR”). The MMR applies on all companies’ operating income. The MMR is payable on a quarterly basis with marginal rates ranging from 1% to 12%. An “operating income” to “mining operating revenue” measure is calculated each quarter and, depending on operating margin, the royalty rate increases as the operating margin increases. The new system is designed to provide both a minimum royalty and an additional amount based on the profitability of each project. The Company must always pay at least the minimum royalty rate of 1% of sales, regardless of its profitability. This royalty is treated as an income tax under IFRS.

RISK FACTORS RELATING TO TAHOE'S BUSINESS

Our business is the operation, exploration, development and acquisition of mining properties. Due to the high risk nature of our business, our operations are speculative. The risk factors described below are not the only risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. These risk factors could materially affect our future operating results and could cause actual events to differ materially from those described in our forward-looking statements and forward-looking information relating to us or our business.

Metal Price Fluctuations

The majority of our revenue is derived from the sale of gold and silver. Therefore, fluctuations in the prices of these commodities represent one of the most significant factors that we expect will affect our future operations and potential profitability. The price of gold and silver and other metals fluctuate widely and are affected by numerous factors beyond our control, including:

• levels of supply and demand,

• global or regional consumptive patterns,

• sales by government holders,

• metal stock levels maintained by producers and others,

• increased production due to new mine developments and improved mining and production methods,

• speculative activities related to the sale of metals,

• availability and costs of metal substitutes,

• international and regional economic and political conditions,

• interest rates, currency values, and inflation.

Declining market prices for these metals could materially adversely affect our results of operations, cash flows and financial position.

Impact of Declines in Commodity Prices of Reserves

If our Mineral Reserve calculations and life-of-mine plans are required to be revised using significantly lower gold and silver prices, this could negatively impact our Mineral Reserve calculations and the feasibility of our projects, resulting in material write-downs of our investment in mining properties and increased amortization, reclamation and closure charges. Even if the project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed which may have a material adverse effect on our results of operation, cash flow and financial position.

Concentration of Our Business in Gold and Silver Industries

We are concentrated in the gold and silver mining industries, and as such, our profitability will be sensitive to changes in, and our performance will depend to a greater extent on, the overall condition of the gold and silver mining industries. We may be susceptible to an increased risk of loss, including losses due to adverse

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occurrences affecting us more than the market as a whole, as a result of the fact that our operations are concentrated in the gold and silver mining sector.

Developments Regarding Indigenous Peoples

Some of our operations are situated in areas presently or previously inhabited or used by indigenous peoples, triggering various international and national laws, codes, resolutions, conventions, guidelines, and imposing obligations on government and companies relating to the rights of indigenous people. These may include a mandate that government consult with communities surrounding our projects and mines regarding actions affecting local stakeholders, prior to granting us mining rights, permits or approvals. Applicable conventions such as the ILO Convention 169, which has been ratified by Guatemala and Peru, is an example of such an international convention. Examples of developments in this area include the United Nations Declaration of the Rights of Indigenous People and the International Finance Corporation’s revised Performance Standard 7, which requires governments to obtain the free, prior, and informed consent of indigenous peoples who may be affected by government action (such as the granting of mining concessions or approval of mine permits). There is an increasing level of public concern relating to the perceived effect of mining activities on indigenous communities. The evolving expectations related to human rights, indigenous rights and, environmental protection may result in opposition to our current and future operations or further development or new development of our projects and mines. Such opposition may be directed through legal or administrative proceedings or expressed in manifestations such as protests, roadblocks or other forms of public expression against our activities, including attacks against our assets or personnel, and may have a negative impact on our reputation and operations. Opposition by any of the aforementioned groups to our operations may require modification of, or preclude the operation or development of, our projects and mines or may require us to enter into agreements with such groups or local governments with respect to our projects and mines, in some cases, causing increased cost and considerable delays to the advancement of our projects which in turn could have a material adverse effect on our reputation, financial position, cash flow and results of operations.

Adverse Developments Affecting Our Properties

The La Arena, Shahuindo and Timmins Mines currently represent 100% of our revenue producing operations. Any adverse development affecting these mines or our ability to conduct mining operations at these mines due to suspension or loss of mining permits, licenses or credentials, protests, roadblocks or blockades that prevent supplies from entering the mine, production from leaving the mine and employees and contractors from entering and leaving the mine, if other than temporary, or other action or events, could have a material and adverse effect on our results of operations, including potential production, Mineral Reserves and Mineral Resources, revenues, profitability, and our financial performance, cash flows and financial position.

In addition, if we are unable to resolve successfully the ongoing dispute involving the Escobal Mine in Guatemala, including the ongoing legal proceedings and court orders regarding the licenses, permits and credentials necessary to conduct mining operations at the Escobal Mine by Minera San Rafael which results in a continuing or permanent suspension of mining operations, or if following a resumption of mining operations at the Escobal Mine there is a subsequent failure by MEM to renew the export credential or adequately conduct court-ordered consultation or if MSR is unable to comply with the results of such consultation process, of if future interference in the form of roadblocks, blockades, protests, future failures to obtains necessary license, permit credential renewals or otherwise, which results in a future suspension of mining operations, each could have a material and adverse effect on our results of operations, including potential production, Mineral Reserves and Mineral Resources, revenues, profitability, and our financial performance, cash flows and financial position.

Obtaining and Renewing Licenses and Permits

In the ordinary course of business, we are and will be required to obtain, maintain and renew governmental licenses or permits for the operation and expansion of our Mines and those projects currently in development for the development, construction and commencement of mining at our existing properties or those we acquire in the future. Obtaining or renewing the necessary governmental licenses, permits or credentials is a complex and time-consuming process involving numerous jurisdictions and often involving public comment periods and costly undertakings on our part. The duration and success of our efforts to obtain and renew licenses, permits and credentials are contingent upon many variables not within our control, including local politics, legal challenges and the interpretation of applicable requirements implemented by the licensing authority. Any unexpected suspensions, such as the prior provisional suspension of the Escobal mining license of MSR and the continuing legal challenges, disputes and appeals of the suspension’s revocation; a suspension of the Escobal mining license as a result of the failure by MEM to adequately conduct court ordered consultation or MSR’s inability to comply with the results of such consultation process; other revocations of licenses, permits or credentials, including reconnaissance, exploration and exploitation licenses and export credentials; disputes or refusals to issue or renew required licenses, permits or credentials, such as the current

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failure by MEM to renew and reissue MSR’s export credential prior to its expiration in August 2017; or delays or costs associated with the licensing, permitting or credentialing processes could prevent or delay the development or impede the operation of a mine, which could materially and adversely impact our results of operations, profitability, cash flows and financial condition.

Development and Operation of Mines

Ongoing development and operation of the Escobal, La Arena, Shahuindo and Timmins Mines depends upon our ability to consistently mine to design parameters and to process mined material at approximate design throughput rates. The long-term commercial viability of our Mines is also dependent upon a number of factors, some of which relate to the particular attributes of the deposit (such as size, grade and proximity to infrastructure), metal prices and government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection. Most of the above factors are beyond our control. As a result, there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions. Failure to do so could have a material adverse impact on our operations and potential future profitability.

Community Action

In recent years, communities of indigenous people, informal miners, non-governmental organizations (“NGOs”) and others in Guatemala and Peru have become more vocal and negative with respect to regulated mining activities in their countries. These communities and NGOs have taken actions such as road closures, work stoppages and initiating lawsuits to challenge mining permits and to sue for environmental and personal injury damages. In addition, they have petitioned human rights organizations, including the Inter American Commission on Human Rights, alleging human rights violations associated with mining operations, and the Canadian National Contact Point, alleging violations of the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, in support of their anti-mining activities. These actions relate not only to current activities but often in respect to decades-old mining disputes and activities by prior owners of mining properties.

Beginning in June 2017, a group of protesters near the town of Casillas blocked the primary road that connects Guatemala City to the Escobal Mine near San Rafael Las Flores, which road blockage continues as of the date of this filing and which has become violent at times. Protests and disputes, such as the roadblock in Casillas affecting the Escobal mine, represent a social risk in the area in which our mines are located and these and similar actions by communities and NGOs may have a material adverse effect on our operations at our mines and other development properties and on our financial position, cash flow and results of operations.

Matters Related to Aboriginal Rights in Canada

Our Canadian mines, mineral properties and related mineral interests are located on and beneath lands that are or may be subject to claims of constitutionally protected aboriginal rights, aboriginal title and treaty rights. Canadian courts have set out certain tests that governments must adhere to in any permitting decisions that may affect asserted or established aboriginal rights and aboriginal title as well as treaty rights. This includes requirements for aboriginal consultation and, if appropriate, accommodation in respect of claimed but unproven aboriginal rights and title. It also includes requirements that must be met in order to justify any infringement of treaty rights, established aboriginal rights or aboriginal title (if proven and aboriginal consent has not been obtained).

The duties of consultation, accommodation and, where applicable, justification for infringement of aboriginal rights, aboriginal title and treaty rights apply to the federal and provincial governments, not to private companies. Canadian courts however, have held that governments can delegate certain procedural aspects of the duty to consult to private parties. Further, these governmental duties could affect our interests in various indirect ways, including potential legal challenges to governmental permits that have been issued, challenges or delays in securing permits and approvals in future, the imposition of terms and conditions to address aboriginal interests and claims to lands or mineral interests. The failure to reach agreements regarding aboriginal rights could have an adverse effect on our reputation, results of operations and profitability.

Operations in Guatemala, Peru and Canada

Our operations in each of the jurisdictions in which we operates are exposed to various levels of political, economic, social and geographical risks and uncertainties. These risks and uncertainties vary from country to country and include, but are not limited to:

• terrorism,

• military repression,

• expropriation, extreme fluctuations in currency exchange rates,

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• high rates of inflation,

• labour unrest,

• protests, roadblocks or other forms of public expression against our activities,

• the risks of war, civil or social unrest, crime or other violence,

• renegotiation or nullification of existing concessions, licenses, permits and contracts, ability of governments to unilaterally alter agreements; government imposed supply laws, including laws, establishing, among other things, profit margins, production quotas, maximum and minimum price, levels and the ability to confiscate merchandise in certain circumstances,

• surface land access issues,

• road blockages or blockades,

• illegal mining,

• political, judicial and business corruption,

• changes in taxation policies, regulations and laws,

• 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.

The occurrence of mining regime changes adds uncertainties that cannot be accurately predicted and any future material adverse changes in government policies or legislation in the jurisdictions in which we operate that affect foreign ownership, mineral exploration, development or mining activities, may affect our viability and profitability.

Violence in Some Jurisdictions

In recent years, criminal activity and violence has spread from border areas of Mexico to neighboring Guatemala. As a result, violent confrontations with authorities and others have steadily increased. Many incidents of crime and violence go unreported and law enforcement authorities’ efforts to reduce criminal activity are challenged by a lack of resources, corruption and the power of organized crime. Incidents of violence and vandalism have occasionally affected our employees, contractors and their families, including recent incidents surrounding the roadblock in Casillas, Guatemala where violent tactics have included stopping and attacking trucks, the shooting of a helicopter carrying fuel to the mine and threats and abuse of mine workers and contractors. We can provide no assurance that security incidents, in the future, will not have a material adverse effect on our operations, especially if violence and criminal activity continue to escalate. Such incidents may halt or delay production, increase operating costs, result in harm to our employees, contractors or visitors, decrease operational efficiency due to employee absenteeism and other factors, increase community tensions or otherwise adversely affect our ability to conduct business.

Political Unrest and Instability

Guatemala suffered an armed conflict for 36 years, which was finally resolved through a peace agreement reached with the country’s internal revolutionary movement in 1996. The last political crisis leading to major social upheaval in Guatemala occurred in 1983 and constitutional government was not restored until 1985. In the past two decades, Guatemala has made progress in restructuring its political institutions and establishing democratic processes, however the country still suffers from social problems, including, but not limited to, a high crime rate, political corruption, malnutrition, poverty and uncertain land tenure. For example, in late January 2018, Guatemalan prosecutors announced the arrest of several business executives and former government officials implicated in a fraudulent tax-refund scandal. Renewed political unrest, changing governmental attitudes towards mining, political crises or other such issues associated with operations in a developing country could adversely affect our operations at the Escobal Mine or our ability to obtain financing necessary for such projects.

After a decade of political instability and one of its worst economic crises in history, Peru has experienced relative political stability and economic growth since the mid-1990s as a result of the restructuring of Peruvian institutions to create a free-market economy. Recently, there have been corruption investigations regarding possible payments to several current and prior government officials by the Brazilian construction company Odebrecht. In December 2017, the Peruvian Congress voted for a debate to occur on the potential dismissal of President Pedro Pablo Kuczynski for “permanent moral incapacity,” in connection with the receipt of alleged payments by Odebrecht to an affiliated company of President Kuczynski when he was finance minister in the early 2000’s. The motion to dismiss the President failed to reach the required special majority of affirmative votes and President Kuczynski remains in office. Such potential for corruption and political tension as well as poverty, unemployment, and social conflict still occur and may result in an adverse effect on our operations.

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Licenses and Title to Assets

Title insurance generally is not available for our properties, and our ability to ensure that we have obtained a secure claim to individual mineral properties or mining concessions may be severely constrained. We have not conducted surveys of all of the claims in which we hold direct or indirect interests and, therefore, the precise area and location of such claims may be in doubt. We can provide no assurances that there are no title defects affecting our properties. Accordingly, our mineral properties may be subject to prior unregistered liens, agreements, transfers or claims, including indigenous land claims, and title may be affected by, among other things, undetected defects. In addition, we may be unable to operate our properties as permitted or to enforce our rights with respect to our properties. Any such defects or the inability to operate our properties as permitted could have a material adverse effect on our financial position, cash flow and results of operations.

Economic Uncertainties of Foreign Operations

As governments continue to struggle with deficits and concerns over the effects of depressed economies, the mining and metals sector has been targeted to raise revenue. Governments are continually assessing the fiscal terms of the economic rent for a mining company to exploit resources in their countries. Numerous countries, including, but not limited to Guatemala, have implemented changes to their respective mining regimes that reflect increased government control or participation in the mining sector, including, but not limited to, changes of law affecting consultation with indigenous peoples, mandatory government participation, taxation and royalties, working conditions, rates of exchange, exchange control, exploration licensing, export duties, repatriation of income or return of capital, environmental protection, foreign ownership and takeovers, as well as requirements for local goods, supplies and employment of local and community staff or contractors or other benefits to be provided to local residents. The occurrence of the various factors and uncertainties related to the economic risks of operating in foreign jurisdictions cannot be accurately predicted and could have a material adverse effect on our operations or profitability.

Recently Opened Mines May Never Reach Full Production

We recently opened mines that have commenced commercial production, such as the Shahuindo Mine, and its expansion projects are subject to risks associated with new mine development, which may result in delays in the start-up of mining operations, delays in existing operations and unanticipated costs. Our production forecasts are based on full production being achieved at all of our mines and our ability to achieve and maintain full production rates at these mines is subject to a number of risks and uncertainties. Production from these mines may be lower than anticipated if the anticipated full production rate cannot be achieved which could adversely affect our cash flows and results of operations.

Annual Production of Gold and Silver

Although our activities are primarily directed towards mining operations, our activities also include the exploration for, and development of, mineral deposits. We must continually explore to replace and expand our Mineral Reserves and Mineral Resources as our mines produce gold and silver and to a lesser degree lead and zinc. Our ability to maintain or increase our annual production of gold and silver depends in significant part on our ability to operate our mines according to our mine plans, to find new Mineral Reserves and Mineral Resources, to bring new mines into production, and to expand Mineral Reserves and Mineral Resources at existing mines. We can provide no assurance that we will be able to maintain or increase our annual production, bring new mines into production or expand the Mineral Reserves and Mineral Resources at our existing mines.

Governmental Laws and Regulations

Our operations, exploration and development activities are subject to the laws and regulations of Guatemala, Peru and Canada that govern various matters including environmental protection, management and use of toxic substances and explosives, management of natural resources, exploration, development, production, and post-closure reclamation of mines, imports and exports, price controls, taxation, mining royalties, labor standards and occupational health and safety, including mine safety and historic and cultural preservation.

The costs associated with legal compliance are substantial. In addition, possible future laws and regulations, changes to existing laws and regulations (including the imposition of higher taxes and mining royalties which have been, or may be, implemented or threatened) or more stringent enforcement of current laws and regulations by governmental authorities, could cause additional expense, capital expenditures, restrictions on or suspension of our operations and planned operations at our mines and projects. 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 impacts of our operations, or possibly even those actions of parties from whom we acquired our mines or properties. Such legal actions could lead to the imposition of substantial fines, penalties or other civil or criminal sanctions. It is difficult to strictly comply with all regulations that may be imposed on us. Even with the application of considerable skill

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we may inadvertently fail to comply with certain laws. Failure to comply with laws and regulations could lead to financial restatements, fines, penalties, loss, reduction or expropriation of entitlements, revocation of permits and licenses, the imposition of additional local, foreign or governmental parties as joint venture partners with carried or other interests and other material negative impacts on us.

Environmental Regulations and Reclamation

All phases of our operations with respect to each of our mines and projects are, and will continue to be, subject to environmental regulation in the countries in which they operate. Environmental legislation in Guatemala, Peru and Canada involves strict standards and may entail increased scrutiny, fines and penalties for noncompliance, stringent environmental assessments of proposed projects and a high degree of responsibility for companies and their officers, directors and employees. Changes in environmental regulation, if any, may adversely impact our operations and future potential profitability. In addition, environmental hazards which are currently unknown may exist at our mines and projects. We may be liable for losses associated with such hazards, or may be forced to undertake extensive remedial clean-up action or to pay for governmental remedial clean-up actions, even in cases where such hazards have been caused by previous or existing owners or operators of the property, or by the past or present owners of adjacent properties or by natural conditions. The costs of such clean-up actions may have a material adverse impact on our operations and future potential profitability.

Reclamation requirements are designed to minimize long-term effects of mining exploitation and exploration disturbance by requiring the operating company to control possible deleterious effluents and to re-establish to some degree pre-disturbance land forms and vegetation. We are, and will continue to be, subject to such requirements for our activities at our mines and projects. Planned reclamation expenditures are estimates only and may not represent the actual amounts that will be required to complete all reclamation activity. Additionally, any significant environmental issues that may arise could lead to increased reclamation expenditures and could have a material adverse impact on our financial resources.

Regulatory Authority Requirements Regarding Financial Assurances

We are required by various governments in jurisdictions in which we operate to provide financial assurances sufficient to allow a third party to implement approved closure and reclamation plans if we are unable to do so. These laws are complex and vary from jurisdiction to jurisdiction. The laws govern the determination of the scope and cost of the closure and reclamation obligations and the amount and forms of financial assurance.

The amount and nature of the financial assurances are dependent upon a number of factors, including our financial condition and reclamation cost estimates. Changes to these amounts, as well as the nature of the collateral to be provided, could significantly increase our costs, making the maintenance and development of existing and new mines less economically feasible. Regulatory authorities may also require further financial assurances. To the extent that the value of the collateral provided to the regulatory authorities is or becomes insufficient to cover the amount of financial assurance we are required to post, we would be required to replace or supplement the existing security with more expensive forms of security, which might include cash deposits, which would reduce our cash available for operations and financing activities. We can provide no assurance that we will be able to maintain or add to our current level of financial assurance or that we will have sufficient capital resources to further supplement our existing security, which could result in a material adverse effect on our operating results and financial condition.

Government Restrictions on Current Mining Methods

There has been increased global attention and the introduction of regulations restricting or prohibiting the use of cyanide and other hazardous substances in mineral processing activities. In addition, the use of open pit mining techniques has come under scrutiny in certain mining jurisdictions, and some governments are reviewing the use of such methods. If legislation restricting or prohibiting the use of cyanide or open pit mining techniques were to be adopted in a region in which we operate, there would be a serious and adverse impact on our results of operations and financial position. Additionally, if the use of cyanide were to be restricted or prohibited in a jurisdiction in which our operations rely on the use of cyanide, it would have a significant adverse impact on our results of operations and financial condition as there are few, if any, substitutes for cyanide that are as effective in extracting gold from the ore.

Tax Changes

Our operations in multiple tax jurisdictions increase our susceptibility to sudden tax changes. The introduction of new tax laws, regulations or rules, or changes to, or differing interpretation of, or application of, existing tax laws, regulations or rules in Canada, Guatemala and Peru or any of the countries in which our operations or business is located, could result in an increase in our taxes, or other governmental charges, duties or impositions. No assurance can be given that new tax laws, rules or regulations will not be enacted or that existing tax laws

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will not be changed, interpreted or applied in a manner that could result in our profits being subject to additional taxation or that could otherwise have a material adverse effect on us.

Financial Projections are Only Estimates

We prepare estimates and projections of our future production. Any such information is forward-looking and no assurance can be given that such estimates will be achieved. These estimates are based on operations being conducted consistent with existing mine plans and other assumptions which change from time to time, including the availability, accessibility, sufficiency and quality of ore, our costs of production, our ability to sustain and increase production levels, the sufficiency of our infrastructure, the performance of our workforce and equipment, our ability to maintain and obtain mining interests, licenses, and permits and our compliance with existing and future laws and regulations. Our actual production may vary from estimates for a variety of reasons, including: actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; short-term operating factors relating to the ore reserves, such as the need for sequential development of orebodies and the processing of new or different ore grades; revisions to mine plans; unusual or unexpected orebody formations; risks and hazards associated with mining; natural phenomena, such as inclement weather conditions, water availability, floods, and earthquakes; and unexpected labor shortages, strikes, protests, local community opposition or blockades. Failure to achieve the estimated forecasts could have an adverse impact on our future cash flows, business, results of operations and financial condition.

Operating Cash Flow

Changes in production costs could have a major impact on profitability. Our main production expenses are personnel and contractor costs, materials and energy. Changes in costs of our mining and processing operations could occur as a result of unforeseen events, including international and local economic and political events, a change in commodity prices, increased costs (including oil, steel and diesel), scarcity of labor and other factors beyond our control which could result in changes in profitability or Mineral Resource or Mineral Reserve estimates.

We prepare estimates of future cash costs and capital costs for our operations and projects. There is no assurance that actual costs will not exceed such estimates. Exceeding cost estimates could have an adverse impact on our future results of operations or financial condition.

Failure to achieve anticipated production levels would have a material adverse impact on our cash flow and future profitability. Our failure to achieve profitability and positive operating cash flows could have a material adverse effect on our financial condition and results of operations.

Indebtedness

We currently have an aggregate consolidated indebtedness of approximately $42.8 million including a current credit facility, capital lease and other obligations. As a result of this indebtedness, we are required to use a portion of our cash flow to service principal and interest on this debt, which will limit the cash flow available for other business opportunities. Our ability to make scheduled principal payments, pay interest on or refinance our indebtedness depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Unexpected delays in production, the suspension of our mining licenses, or other operational problems could impact our ability to service the debt and make necessary capital expenditures when the debt becomes due. If we are unable to generate such cash flow to timely repay any debt outstanding, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

Liquidity and Counterparty

We are exposed to liquidity and various counterparty risks. We are also exposed to liquidity risks in meeting our capital expenditure requirements in instances where cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact our ability to obtain loans and other credit facilities in the future and, if obtained, on terms favorable to us. Furthermore, actions taken by central banks to impact fiscal and monetary policies have increased levels of volatility and market turmoil. As a result of this uncertainty, our planned growth could be adversely impacted and the trading price of our securities could be adversely affected.

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Foreign Exchange Rate Fluctuations

Fluctuations in currency exchange rates, particularly the weakening of the U.S. dollar against the Guatemalan quetzal, the Peruvian sol or the Canadian dollar, could have a significant effect on our results of operations. Any hedging activities we undertake in order to minimize these effects on our operating results may not be successful.

Financing Requirements

The mining, development, expansion and exploration of our properties, will require ongoing financing as a result of various factors including the potential for rising and unforeseen costs and fluctuations in metal prices. We must generate sufficient internal cash flow or be able to utilize available financing sources to finance our growth and sustaining capital requirements. If we do not realize satisfactory prices for the metals that we will produce, we could be required to raise significant additional capital through equity financings in the capital markets, which may involve substantial dilution to existing Shareholders, or we could be required to incur significant borrowings through debt financings to meet our capital requirements. If these financings are required, no assurance can be given that we will be able to raise capital or incur debt on acceptable terms and even if we are able to do so, the our cost of raising capital in the future may be adversely affected. Debt and other mezzanine financing may involve a pledge of assets and may be senior to interests of Shareholders. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the precious metals industry in particular) the location of the Escobal Mine in Guatemala, the locations of the La Arena Mine and the Shahuindo Mine in Peru, the price of silver and gold on the commodities markets (which will impact the amount of asset-based financing available), and/or the loss of key management personnel.

In addition, if we are required to make significant interest and principal payments resulting from a debt financing, our financial condition and ability to raise additional funds may be adversely impacted. Any significant delay in developing our projects or in achieving commercial production from our projects on a consistent basis or the incurring of capital costs that are significantly higher than estimated, could have a significant adverse effect on our results of operations, cash flow from operations and financial condition.

Access to Capital

Any changes to our current projections or any new development or acquisition activity may require substantial additional capital. When such additional capital is required, we will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favorable to us and might involve substantial dilution to existing shareholders. We may not be successful in locating suitable financing transactions in the time period required or at all, and may not obtain the capital required by other means. A failure to raise capital when needed would have a material adverse effect on our business, financial condition and results of operations. Any future issuance of common shares to raise required capital will be dilutive to our shareholders. In addition, debt and other mezzanine financing may involve a pledge of assets and may be senior to interests of equity holders. We may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the precious metals industry in particular) the location of the Escobal Mine in Guatemala, the locations of the La Arena Mine and the Shahuindo Mine in Peru, the price of silver and gold on the commodities markets (which will impact the amount of asset-based financing available), and/or the loss of key management personnel. Failure to obtain necessary capital on reasonable terms may materially and adversely affect our future operations and profitability.

Operating Hazards, Risks and Insurance

The ownership, operation and development of a mine or mineral property involves many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. These risks include environmental hazards, industrial accidents, explosions and third-party accidents, the encountering of unusual or unexpected geological formations, ground falls and cave-ins, mechanical failure, unforeseen metallurgical difficulties, power interruptions, flooding, earthquakes and periodic interruptions due to inclement or hazardous weather conditions or civil unrest. These occurrences could result in environmental damage and liabilities, work stoppages, delayed production and resultant losses, increased production costs, damage to, or destruction of, mineral properties or production facilities and resultant losses, personal injury or death and resultant losses, asset write downs, monetary losses, claims for compensation of loss of life and/or damages by third parties in connection with accidents (for loss of life and/or damages and related pain and

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suffering) that occur on company property, and punitive awards in connection with those claims and other liabilities.

It is not always possible to fully insure against such risks, and we may decide not to take out insurance against such risks as a result of high premiums or for other reasons. Should such liabilities arise they could reduce or eliminate any future profitability and result in an increase in costs and a decline in value of our securities. Even if we are able to obtain insurance against these risks, liabilities that we incur may exceed the policy limits of insurance coverage or may not be covered by insurance, in which event we could incur significant costs that could adversely impact our business, operations, potential profitability or value. We are reliant upon the expertise and performance of both our own personnel and certain third parties, such as consultants and engineers. Even if we are able to attract and retain qualified personnel, as well as qualified consultants, to manage our interests, people are fallible and human error could result in significant uninsured losses to us. These could include loss or forfeiture of mineral interests or other assets for non-payment of fees or taxes, significant tax liabilities in connection with any tax planning effort we might undertake and legal claims for errors or mistakes by our personnel or third party experts. In regards to political risks, we do not maintain and does not intend to purchase political risk insurance for our operations in Guatemala or Peru.

Illegal and Artisanal Miners

Mining by illegal and artisanal miners (small-scale or subsistence miners) occurs in the area of the Shahuindo Mine. Activity by artisanal and illegal miners could interfere with our operations and could lead to conflicts between the artisanal or illegal miners and our employees, local communities, local governments or law enforcement officials. These activities could also cause damage to the Shahuindo Mine, including pollution, environmental damage, fires, or personal injury or death, for which we could potentially be held responsible. The presence of artisanal and illegal miners could lead to project delays and disputes regarding the development or operation of gold deposits. Artisanal and illegal mining could also result in mine stoppages, environmental issues and could have a material adverse effect on our results of operations or financial condition.

Mine Concentrate Transportation and Marketing Risk

Gold doré and mineral concentrates containing combinations of silver, gold, lead and zinc are produced at our Mines and loaded onto highway road vehicles for transport to sea ports for export to foreign smelters in markets such as Asia, Europe and North America. This type of process involves certain environmental and financial risks. We could be subject to potential significant increases in road and maritime transportation charges and treatment and refining charges. Transportation of such doré and mineral concentrates is also subject to numerous risks including, but not limited to, delays in delivery of shipments, road blocks, terrorism, criminal activities, civil unrest, weather conditions and environmental liabilities in the event of an accident or spill. We could be subject to limited smelter availability and capacity and could also face the risk of a potential interruption of business from a third party beyond our control, which in both cases could have a material adverse effect on our operations and revenues. There is no assurance that smelting, refining or transportation contracts for our Mine’s products will be entered into and/or renewed on acceptable terms. If we are unable to effectively sell our doré or smelt our mine concentrates on acceptable terms our financial position, cash flow and results of operations could be adversely affected.

Mineral Resource and Mineral Reserve Calculations are Only Estimates

Any figures presented by us for Mineral Resources and Mineral Reserves are only estimates. There is a degree of uncertainty attributable to the estimation of Mineral Resources and Mineral Reserves. Until Mineral Resources or Mineral Reserves are actually mined and processed, the quantity of metal and grades must be considered estimates only and no assurances can be given that the predicted levels of metals will be produced. The estimating of Mineral Resources and Mineral Reserves includes a subjective process that relies on the judgment of the persons preparing the estimates. The process relies on the quantity and quality of available data and is based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. By their nature, Mineral Resource and Mineral Reserve estimates are imprecise and depend, to a certain extent, upon analysis of drilling results and statistical inferences that may ultimately prove to be inaccurate. In addition, such estimates are based on certain assumptions regarding commodity prices, costs and other factors that may prove to be inaccurate. For example, a material and sustained decline in the prices of silver or gold could require us to reassess our Mineral Reserve estimates, which could impact the feasibility or value of our mineral properties.

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Estimated Mineral Resources or Mineral Reserves may have to be recalculated based on changes in metal prices, further exploration or development activity or actual production experience. This could materially and adversely

Annual Information Form for the Year Ended December 31, 2017 35

affect estimates of the volume or grade of mineralization, estimated recovery rates or other important factors that influence resource or reserve estimates. The extent to which Mineral Resources may be reclassified as Proven Mineral Reserves or Probable Mineral Reserves depends upon the demonstration of their profitable recovery, among other criteria. Proven Mineral Reserves and Probable Mineral Reserves may not be profitable in the future due to market price fluctuations, increased production costs, reduced recovery rates, or other factors. A reduction in Mineral Resources or Mineral Reserves could have an adverse impact on our future cash flows, earnings, results of operations and financial condition.

Infrastructure

Mining activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important elements of infrastructure, which affect capital and operating costs. If adequate infrastructure becomes unavailable in the future there can be no assurance that operations will achieve the anticipated production volume; or that the anticipated ongoing operating costs to operate our mines or to construct our projects will not be higher than anticipated. Furthermore, unusual or infrequent weather phenomena, sabotage, government neglect or other interference in the maintenance or provision of necessary infrastructure could adversely affect our operations and profitability.

Energy

We consume energy in mining activities, primarily in the form of diesel fuel and electricity. As our properties are in remote locations and energy is generally a limited resource, we face the risk that there may not be sufficient energy available to carry out mining activities efficiently or that certain sources of energy, including sufficient supplies of diesel fuel that are essential to the operation of our mines, such as the Escobal Mine, may not be available which could have a material adverse effect on operations and profitability.

Water Supplies

Our mining operations require significant quantities of water for mining, ore processing and related support facilities. In particular, our properties in Peru and Guatemala are in areas where water is scarce and competition among users for continuing access to water is significant. Continuous production and mine development is dependent on our ability to acquire and maintain water rights and claims and to defeat claims adverse to current water uses in legal proceedings. Although each of our operating mines currently has sufficient water rights and claims to cover our operational demands, we cannot predict the potential outcome of pending or future legal proceedings relating to water rights, claims and uses. Water shortages may also result from weather or environmental and climate impacts out of our control. Shortages in water supply could result in production and processing interruptions. In addition, the scarcity of water in certain regions could result in increased costs to obtain sufficient quantities of water to conduct our operations. The loss of some or all water rights, in whole or in part, or ongoing shortages of water to which we have rights or significantly higher costs to obtain sufficient quantities of water (or the failure to procure sufficient quantities of water) could result in our inability to maintain production at current or expected levels, require us to curtail or shut down mining production and could prevent us from pursuing expansion or development opportunities, which could adversely affect our results of operations and financial condition. Laws and regulations may be introduced in some jurisdictions in which we operates which could also limit access to sufficient water resources, thus adversely affecting our operations.

Employee Recruitment and Retention

Recruiting and retaining qualified personnel is critical to our success. We are dependent on the services of key executives and other highly skilled personnel focused on managing our interests. The number of persons skilled in the acquisition, development, and operation of mining properties is limited and competition for such persons is intense. As our business activity grows, we will require additional key financial, administrative, geologic and mining personnel as well as additional operations staff. There is no assurance that we will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increases. If we are not successful in attracting, training and retaining qualified personnel, the efficiency of our operations could be impaired, which could have an adverse impact on our future cash flows, earnings, results of operations and financial condition.

Adverse General Economic Conditions

Market events and conditions, including the disruptions in the international credit markets and other financial systems, in China, Japan and Europe, along with political instability in the Middle East and Russia and falling currency prices expressed in United States dollars have resulted in commodity prices remaining volatile. These conditions have also caused a loss of confidence in many of the global credit markets in which we operate, resulting in the collapse of, and government intervention in, major banks, financial institutions and insurers and creating a climate of greater volatility, tighter regulations, less liquidity, widening credit spreads, less price

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transparency, increased credit losses and tighter credit conditions. Notwithstanding various actions by governments, concerns about the general condition of the capital markets, financial instruments, banks and investment banks, insurers and other financial institutions caused the broader credit markets to be volatile. These events are illustrative of the effect that events beyond our control may have on commodity prices, demand for metals, including gold, silver, copper, lead and zinc, availability of credit, investor confidence, and general financial market liquidity, all of which may adversely affect our business.

Competition for New Properties

An element of our business strategy is to make selected acquisitions. We expect to continue to evaluate acquisition opportunities on a regular basis and intend to pursue those opportunities that we believe are in our long-term best interests. There is a limited supply of desirable mineral lands available in areas where we would consider conducting exploration or development activities. Because we face strong competition for new properties from other mining companies, some of which have greater financial resources than we do, we may be unable to acquire attractive new mining properties on terms that we consider acceptable. In addition, competition in the mining business for limited sources of capital could adversely impact our ability to acquire and develop suitable mining properties, development projects, producing companies or properties having significant exploration potential. As a result, there is no assurance that we will be able to acquire additional mining properties.

The success of any acquisition that we make will depend upon our ability to effectively manage the operations of entities we acquire and to realize other anticipated benefits. Ultimately, any acquisitions would be accompanied by risks, which could include:

• a significant change in commodity prices after we have committed to complete the transaction and established the purchase price or exchange ratio;

• a material ore body could prove to be below expectations;

• difficulty in integrating and assimilating the operations and workforce of any acquired companies;

• realizing anticipated synergies and maximizing the financial and strategic position of the combined enterprise;

• maintaining uniform standards, policies and controls across the organization;

• disruption of our ongoing business and our relationships with employees, suppliers, contractors and other stakeholders as we integrate the acquired business or assets;

• the acquired business or assets may have unknown liabilities which may be significant;

• delays as a result of regulatory approvals;

• and exposure to litigation (including actions commenced by shareholders) in connection with the transaction.

The process of managing acquired businesses may involve unforeseen difficulties and may require a disproportionate amount of management resources. There can be no assurance that we will be able to successfully manage the operations of businesses we acquires or that we achieve the anticipated benefits of our acquisitions. Any material issues that we encounter in connection with an acquisition could have a material adverse effect on our business, results of operations and financial position.

May Not Realize Benefits of Growth Projects

As part of our strategy, we will continue our efforts regarding the development and operation of our respective projects. A number of risks and uncertainties are associated with the development and operation of these types of projects, including political, regulatory, design, construction, labor, operating, technical and technological risks and, uncertainties relating to capital and other costs and financing risks. The level of production and capital and operating cost estimates relating to the expanded portfolio of projects are based on certain assumptions and are inherently subject to significant uncertainties.

Suppliers

Certain raw materials and supplies used in connection with our operations are obtained from a sole or limited group of suppliers (including, for example, truck tires and sodium cyanide). An increase in global demand for such resources and a corresponding decrease in the supplier’s inventory would likely cause unanticipated cost increases, an inability to obtain adequate supplies and delays in delivery times, thereby adversely impacting operating costs, capital expenditures and production schedules. If a supplier is unable to adequately meet our requirements over a significant period of time and we are unable to source an alternate third party supplier on reasonable commercial terms, this could have a material adverse effect on our business, results of operations and financial condition.

Annual Information Form for the Year Ended December 31, 2017 37

Changes in Climate Conditions

Governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Regulation relating to emission levels (such as carbon taxes) and energy efficiency is becoming more stringent. If the current regulatory trend continues, we expect that this will result in increased costs at some of our operations. In addition, the physical risks of climate change may also have an adverse effect on our operations. These risks include the following: (1) Sea level rise: Changes in sea levels could affect ocean transportation and shipping facilities that are used to transport supplies, equipment and workforce to our operations and products from those operations to world markets; (2) Extreme weather events: Extreme weather events (such as increased frequency or intensity of hurricanes, increased snow pack, prolonged drought) have the potential to disrupt operations at our mines. Extended disruptions to supply lines could result in interruption to production; (3) Resource shortages: our facilities depend on regular supplies of consumables (diesel, tires, sodium cyanide, etc.) and reagents to operate efficiently. In the event that the effects of climate change or extreme weather events cause prolonged disruption to the delivery of essential commodities, our production efficiency is likely to be reduced.

We can provide no assurance that efforts to mitigate the risks of climate changes will be effective and that the physical risks of climate change will not have an adverse effect on our operations and profitability.

Claims and Legal Proceedings

We may be subject to claims or legal proceedings covering a wide range of matters that arise in the ordinary course of business activities, including claims relating to ex-employees, claims that purport to be class actions and claims relating to our licenses and permits. We and certain of our officers and directors have been named in several purported class action claims alleging violations of Section 10(b) and Section 20(a) of the US Exchange Act and Rule 10b-5 promulgated thereunder. The lawsuits were filed following the issuance of a provisional decision by the Guatemalan Supreme Court suspending the Escobal mining license issued to our subsidiary, MSR, based upon the allegation that the MEM violated the Xinka indigenous people’s right of consultation. These matters may give rise to legal uncertainties or have unfavourable results and divert management’s attention and resources. In addition, we may be involved in disputes with other parties in the future that may result in litigation or unfavourable resolution which could materially adversely impact our financial position, cash flow and results of operations.

Conflicts of Interest

Certain of our directors and officers also serve as directors and/or officers of other companies involved in natural resource exploration and development. Consequently, there is a possibility that a conflict could arise for such directors and officers. Any Company-related decision made by any of these directors and officers should be made in accordance with their duties and obligations to deal fairly and in good faith and to act in the best interests of the Company and our shareholders. In addition, each of the directors is required to declare and refrain from voting on any matter in which such director may have a conflict of interest in accordance with the procedures set forth in our Code of Business Conduct, the Business Corporations Act (British Columbia) and other applicable laws.

Operating Through Foreign Subsidiaries

We conduct operations through foreign (including Guatemalan and Peruvian) subsidiaries, and a majority of our assets are held in such entities. Accordingly, any limitation on the transfer of cash or other assets between the parent corporation and such entities, or among such entities, could restrict our ability to fund our operations efficiently. Any such limitations, or the perception that such limitations may exist now or in the future, could have an adverse impact on our valuation and stock price.

Cyber Threats and Attacks

Attacks on our information technology (“IT”) systems (or on systems of key third parties on which we rely), failure or non-availability of a key IT system or industrial control system (“ICS”) whether intentional or not, could result in disruptions to our operations, personal injury, property damage or financial or reputational risks. As the cyber threat landscape is ever changing, our primary focus includes: evaluating risk-prioritized controls, policies and procedures to protect against known and emerging threats; tools to provide automated monitoring and alerting; and disaster and backup recovery systems to restore systems and return to normal operations. There can be no assurance that our systems will be effective in protecting against these types of threats and new threats that are constantly evolving.

As cyber threats continue to emerge, we may also be required to expend additional resources to continue to modify, enhance or refine protective measures and/or investigate and remediate any security vulnerabilities and processes.

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Failure to Comply with Anti-Bribery and Anti-Corruption Laws

Our activities are subject to a number of laws that prohibit various forms of corruption, including local laws that prohibit both commercial and official bribery and anti-bribery laws that have a global reach. The increasing number and severity of enforcement actions in recent years present particular risks with respect to our business activities, to the degree that any employee or other person acting on our behalf might offer, authorize, or make an improper payment to a foreign government official, party official, candidate for political office, or political party, an employee of a foreign state-owned or state-controlled enterprise, or an employee of a public international organization. A failure to comply with anti-bribery and anti-corruption laws could have an adverse impact on our reputation, future profitability and financial condition.

Failure to Maintain Effectiveness of Internal Control Over Financial Reporting

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 IFRS. Disclosure controls and procedures are designed to ensure that the information required to be disclosed by us in reports filed with securities regulatory agencies is recorded, processed, summarized and reported on a timely basis and is accumulated and communicated to our management, as appropriate, to allow timely decisions regarding required decisions. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation. Our failure to satisfy the requirements of applicable securities laws on an ongoing, timely basis, including as a result of any difficulties we encounter in integrating various acquisitions disclosure controls and procedures and internal controls over financial reporting with our existing procedures and controls could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our common shares.

In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. Any of these factors could have a material adverse effect on our results of operations, cash flows and financial position.

Reputation Risk

As a result of the increased usage and the speed and global reach of social media and other web-based tools used to generate, publish and discuss user-generated content and to connect with other users, companies today are at much greater risk of losing control over how they are perceived in the marketplace. Damage to our reputation can be the result of the actual or perceived occurrence of any number of events, and could include any negative publicity (for example, with respect to our handling of environmental matters or our dealings with community groups), whether true or not. We place a great emphasis on protecting our image and reputation, but we do not ultimately have direct control over how we are perceived by others. Reputation loss may lead to increased challenges in developing and maintaining community relations, decreased investor confidence and an impediment to our overall ability to advance our projects, thereby having a material adverse impact on financial performance, cash flows and growth prospects.

RISK FACTORS RELATING TO TAHOE'S SHARES

Market Price of Shares and Volatility

Our common shares are listed on the TSX and NYSE. Securities of mining companies have experienced substantial volatility in the past, often based on factors unrelated to a company’s financial performance or prospects. These factors include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries. The price of our common shares is also likely to be significantly affected by adverse business developments and short-term changes in gold, silver or other mineral prices or in our financial condition or results of operations. Other market-related factors unrelated to our performance that may affect the price of our common shares include the following:

• the extent of analytical coverage available to investors concerning our business may be limited if investment banks with research capabilities do not follow us;

• decreases in trading volume and general market interest in the common shares may affect an investor’s ability to trade significant numbers of common shares;

• the size of our public float may limit the ability of some institutions to invest in common shares; and

• a substantial decline in the price of the common shares that persists for a significant period of time could cause the common shares, if listed on an exchange, to be delisted from such exchange, further reducing market liquidity.

Annual Information Form for the Year Ended December 31, 2017 39

The market price of our common shares is also affected by many other variables which are not directly related to our success and are, therefore, not within our control. These include other developments that affect the market for all resource sector securities, including short-term changes in gold and silver prices, the breadth of the public market for our common shares and the attractiveness of alternative investments.

These factors, among others, could have an adverse impact on the market price of our common shares. Securities class action litigation often has been brought against companies following adverse business announcements or periods of volatility in the market price of their securities, such as the purported class action lawsuits that were filed against us and certain of our officers and directors following the issuance of a provisional decision by the Guatemalan Supreme Court suspending the Escobal mining license issued to our subsidiary, MSR, based upon the allegation that MEM violated the Xinka indigenous people’s right of consultation. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.

Foreign Private Issuer Exemptions

Because we are a foreign private issuer under the US Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: the rules under the US Exchange Act requiring the filing of annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K with the SEC; the sections of the US Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; the sections of the US Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and the selective disclosure rules by issuers of material non-public information under Regulation FD; and the requirement to reflect scientific and technical information pursuant to SEC Industry Guide 7.

While we file and furnish to the SEC information that we prepare and make public in accordance with Canadian securities laws, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, investors may not be afforded the same protections or information which would be made available to investors investing in a U.S. domestic issuer.

Loss of Foreign Private Issuer Status

We may in the future lose our foreign private issuer status if a majority of our shares are held in the United States and we fail to meet the additional requirements necessary to avoid loss of foreign private issuer status, such as if: (1) a majority of our directors or executive officers are U.S. citizens or residents; (2) a majority of our assets are located in the United States; or (3) our business is administered principally in the United States. At the present time, half of our directors reside in the United States and our business is administered principally from Nevada. The regulatory and compliance costs incurred under U.S. securities laws as a U.S. domestic issuer will be significantly more than the costs incurred as a Canadian foreign private issuer. If we are not a foreign private issuer, we would not be eligible to use foreign issuer forms and would be required to file periodic and current reports and registration statements on U.S. domestic issuer forms with the SEC, which are generally more detailed and extensive than the forms available to a foreign private issuer. This could result in significant additional costs and expenses.

THE ESCOBAL MINE

CURRENT TECHNICAL REPORT

The most recent technical report on the Escobal Mine, filed in accordance with NI 43-101 is Escobal Mine Guatemala NI 43-101 Feasibility Study, dated November 5, 2014 and available on SEDAR at www.sedar.com and on the Company’s website at www.tahoeresources.com.

PROJECT DESCRIPTION, LOCATION AND ACCESS

The Escobal Mine is an underground silver-gold-lead-zinc mine with mineral recovery by differential flotation producing precious metal-rich lead concentrates and zinc concentrates. The mine is located in southeast Guatemala, approximately 40 kilometres east-southeast of Guatemala City and 2 kilometres east of the town of San Rafael Las Flores in the Department of Santa Rosa. Primary access to the Escobal Mine is via 70 km of paved highway from Guatemala City.

The Escobal Mine is 100% owned by the Company through its wholly-owned subsidiary Mineral San Rafael, S.A. (“MSR”), and comprises two mineral licenses covering approximately 29.2 km². These include the Escobal Exploitation License covering 20 km² and the Juan Bosco Exploration License covering 9.2 km². The Escobal Exploitation License is valid for 25 years from receipt of the license on April 3, 2013 and is renewable for an

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additional 25 years. Exploration licenses in Guatemala are granted for an initial period of three years which can be extended for two additional two-year periods, for a total holding period of seven years; after which, application must be made for an exploitation license or new exploration concession. The Juan Bosco Exploration License was granted on May 9, 2012 for a two year term. As permitted by applicable laws, the Company has subsequently filed two extensions to extend the Juan Bosco Exploration License, but MEM has not taken any action to issue a new exploration license.

MSR makes annual payments to Guatemala’s MEM for each concession based on concession size and a graduating “concession age” factor. The annual fee to hold the Escobal Exploitation License is approximately US$1,500 per square kilometre.

There are no defined work requirements to keep an exploration concession or exploitation license valid, although annual reports documenting exploration and operation activities must to be filed with MEM on an annual basis. The Company has filed exploration and operations reports with MEM for all exploration and exploitation concessions each year as required. Required payments are current for all concessions held by the Company.

In Guatemala, there is a statutory one percent royalty on precious and base metal production. In addition, MSR paid an additional 4% NSR royalty on concentrates sold from the Escobal Mine; of which two percent benefited the local San Rafael municipality; one percent benefited certain outlying municipalities; and one percent benefited MEM. The Escobal Voluntary Royalty Agreements were canceled in 2017 upon the Escobal license suspension.

Within the Escobal Exploitation License, MSR owns approximately 281 hectares for the area required for mining operations, processing plant and ancillary facilities, surface operations, and tailings and waste rock disposal. Annual property taxes to the San Rafael municipality are approximately US$150,000 per year. In addition, the Company established a profit-sharing program that provides a 0.5% NSR royalty to an association of former land owners of the Escobal Mine property. Ten percent of this royalty is deposited in a special fund, administered by the association’s board of directors, and used for improvements in local communities.

To the best of the Company’s knowledge, other than the obligation to conduct exploitation and exploration activities in compliance with the applicable MEM and MARN requirements, there are no known permitting or environmental liabilities to which the properties are subject. Some communities and non-governmental organizations (“NGOs”) have been vocal and active in their opposition to mining and exploration activities in Guatemala. These communities and NGOs have taken actions such as blockades to limit access of equipment and supplies to the Escobal Mine. The Escobal Mine is currently on care-and-maintenance due to the Casillas blockade and while awaiting a decision from the Constitutional Court on the definitive decision of the Supreme Court reinstating the Escobal mining license. See "Description of Tahoe’s Business - Risk Factors Relating to Tahoe’s Business".

HISTORY

Activity at the Escobal property dates back to 1996 when Entre Mares, S.A., the Guatemalan subsidiary of Goldcorp, prospected in the area and identified high-grade gold values associated with surface quartz veins in the western portion of the Escobal vein. In 2006, Entre Mares initiated regional exploration in the area, partially based on verifying geochemical anomalies in its database. In late 2006, significant silver and gold grades were detected from surface sampling along an extensive alteration zone developed over the Escobal vein. An exploration license was applied for in October 2006 and was granted in March 2007. Entre Mares commenced exploration drilling on the Escobal property in May 2007. In early 2010, Goldcorp reported a Measured and Indicated Mineral Resource for the Escobal property of 6.97 million tonnes with average grades of 0.63 g/t gold and 580.3 g/t silver and an Inferred Mineral Resource of 13.15 million tonnes with average grades of 0.53 g/t gold and 443.4 g/t silver.

In May 2010, Tahoe executed an agreement to acquire the Escobal Project from Goldcorp’s indirectly wholly owned subsidiaries, Goldcorp Holdings Barbados Ltd. and Guatemala Holdings Ltd, which respectively held 9.1% and 91.9% of Entre Mares. On June 8, 2010 upon successful completion of Tahoe’s initial public offering, Tahoe acquired 100% of the Escobal project and associated exploration concessions from Entre Mares.

To be the best of the Company’s knowledge, there had been no production from the Escobal property prior to MSR’s activities.

GEOLOGICAL SETTING, MINERALIZATION AND DEPOSIT TYPE

The geological setting of Guatemala is comprised of two tectonic terrains juxtaposed across a major tectonic plate boundary. The northern half of Guatemala is on the North American plate, and the southern half is on the Caribbean plate with three major east-west trending faults forming the collision boundary. The Escobal

Annual Information Form for the Year Ended December 31, 2017 41

property is situated on the Caribbean plate, south of the faults. The area is characterized by a series of volcanic units derived from multiple eruptive events.

The Escobal deposit is an intermediate-sulfidation fault-related vein formed within Tertiary sedimentary and volcanic rocks within the Caribbean plate. The Escobal vein system hosts silver, gold, lead and zinc, with an associated epithermal suite of elements, within quartz and quartz-carbonate veins. Quartz veins and stockwork up to 50 metres wide, with up to 10% sulfides, form at the core of the Escobal deposit and grade outward through silicification, quartz-sericite, argillic and propylitic alteration zones.

Drilling and underground operations to date have identified continuous precious and base metal mineralization over a 2,400 metre lateral distance and 1,200 metre vertical range in three zones which comprise the Escobal vein system; the East, West and Central zones. The vein system is oriented generally east-west, with variable dips. The East zone dips to the south from 60° to 75° and steepens to near-vertical at depth. The majority of the mineralized structure(s) in the West zone dips from 60° to 70° to the north, steepens to near-vertical and then again dips towards the north at depth. The upper eastern portion of the Central zone dips 60° to 70° to the south as in the East Zone, and changes to vertical or north dip at depth.

EXPLORATION

Exploration at Escobal included surface prospecting, detailed surface geologic mapping and geochemical sampling, geophysical prospecting, and drilling. The most effective exploration tool at Escobal has been core drilling (discussed in the following section).

Soil sampling was completed by Entre Mares prior to Tahoe’s acquisition of the property in 2010. Entre Mares sampled at 100 m by 25 m spacing over the entire Escobal vein and adjoining areas. Soil and rock chip anomalies confirmed trends identified through geological mapping and subsequent drilling.

Both ground magnetic and induced polarization (IP)/resistivity orientation surveys were conducted by the Company over portions of the Escobal vein and neighboring secondary veins. Ground magnetics is not viewed as a valid exploration method as the low magnetite content associated with mineralized veins and the interference from magnetite-rich capping Quaternary sediments (ash and alluvium) provides chaotic magnetic results. IP and resistivity results show better correlation with mineralized veins only where veins with higher sulfide content extend to a shallow level (~150m depth) below minimal Quaternary cover.

Supplementary studies have been undertaken to aid interpretation and discovery of buried veins throughout the region. An alteration zonation model to enhance interpretation and help to identify other district exploration targets was conducted using spectroscopic analysis of the Escobal vein and other veins proximal to Escobal. Results to date suggest illite and kaolin concentrations in wallrock surround the Escobal vein and grade outwards to smectite-rich alteration both laterally and to depth.

DRILLING

Surface drilling at the Escobal property was conducted by Entre Mares from 2007 up to the time of Tahoe’s acquisition of the Escobal property and the Company has essentially conducted drilling on a continuous basis since that time. Drilling has been carried out from the surface and from underground using a combination of contracted and company-owned drills.

Beginning in 2012, MSR initiated systematic infill and stope definition drilling from underground drill stations in preparation for production mining using company-owned drills. Infill and stope definition drilling will continue throughout the life of the mine. All vein intercepts were drilled by diamond drill (core) methods, with the majority of mineralized intercepts drilled with NTW-size drill core, with lesser amounts of BQ-size core.

SAMPLING, ANALYSIS AND DATA VERIFICATION

Drill core from the Escobal Mine is photographed, logged for geologic and geotechnical properties and sampled at the project site. Geologists determine sample intervals based on geologic and/or mineralogic changes. The drill core is generally sampled at 1.0-meter to 1.5-metre lengths, though sample intervals can be defined from less than one metre in zones of discreet mineralization to over three metres in weakly mineralized or altered areas. Once the sample intervals are determined, the core is marked and tagged in wood core boxes.

Exploration core samples selected for analysis are cut lengthwise using mechanized diamond saws. One-half of the core is placed in a plastic sample bag with a sample tag while the remaining half core is replaced in the core box for future reference. The samples are stored in MSR’s secured facility until they are picked up by Bureau Veritas (formerly Inspectorate Laboratories), an independent commercial laboratory. Bureau Veritas operates a sample preparation facility in Guatemala City and couriers the sample pulps to their facility in

42 Tahoe Resources Inc.

Reno, Nevada USA for analysis. Bureau Veritas holds sample pulps in secured storage in Guatemala City. There is no relationship between the Company and Bureau Veritas other than that of a client-service provider nature.

Underground definition drill core is normally sampled in its entirety, with the samples placed in plastic bags with sample tags. Samples are stored in a secure location at the Escobal Mine site until they are either picked up by, or delivered to, Bureau Veritas. Bureau Veritas holds sample pulps in secured storage in Guatemala City and returns coarse reject to the mine.

Through late 2015, Bureau Veritas/Inspectorate has been the primary analytical laboratory for all Escobal drill samples with only minor exceptions. Samples have been prepared and analyzed using industry-standard practices suitable for the mineralization at Escobal. Gold is analyzed by fire assay with atomic absorption (“AA”) finish; silver is analyzed by digestion/AA, with higher grade samples repeated using fire assay and gravimetric methods. Lead and zinc are analyzed by induced coupled polarization or by digestion/AA, with high grade samples repeated using titration methods. Both Entre Mares and Tahoe conducted quality assurance and quality control (“QA/QC”) programs throughout all of the drill campaigns at Escobal, which included check assaying and duplicate sample assaying at other laboratories, and the use of blind assay standards and assay blanks. In late 2015, the Company began utilizing their on-site laboratory for analysis of a portion of the underground stope definition drill core and intends to increase its use of the laboratory for this purpose. Exploration samples will continue to be analyzed by an independent commercial laboratory.

The project drill data has been audited and verified by independent consulting firms on three separate occasions between 2010 and 2014. Verification work consisted of complete audit of the full assay database; ground verification of a significant portion of drill location and collar survey data; site visits including independent verification sampling; review of sample handling and logging procedures; and review of QA/QC data and processes. The results of the independent verification programs support the estimation of mineral resources at Escobal and the assignment of Measured and Indicated classifications to the majority of the Mineral Resources.

MINERAL PROCESSING AND METALLURGICAL TESTING

McClelland Laboratories (Sparks, Nevada, USA) conducted the initial metallurgical tests in 2009 on three drill core samples from the Escobal deposit. It was concluded from the results of the tests that differential lead/zinc flotation producing a high value lead concentrate containing most of the silver and gold and a salable lower value zinc concentrate was the optimum processing route.

In June 2010, FLSmidth Dawson Metallurgical Laboratories was contracted to conduct metallurgical testing on drill cores representative of the mineralization from the Escobal Project. The primary objective of the test program was to determine process design criteria for crushing, grinding and flotation for the Escobal sulfide deposit. Results of the differential flotation tests indicate that the Escobal sulfide mineralization would respond to widely used and proven mineral processing techniques. The test programs verified that good recoveries of gold, silver, lead and zinc and acceptable reagent consumptions could be obtained by using conventional lead-zinc differential flotation processes. No processing factors or deleterious elements were identified that could have a negative impact on the economic extraction of the resource.

The design flotation feed consisted of a primary grind size of 80% passing 105 µm in the rougher flotation circuits and regrind size of 80% passing 37 µm in the cleaner flotation circuits. Expected recoveries from the sulfide mineral processing were 86.8% for silver, 75.1% for gold, 82.5% for lead, and 82.6% for zinc. These recoveries were used for plant design and have generally been substantiated by operational results achieved by the Escobal processing plant.

In 2013, Tahoe commissioned a metallurgical pilot plant to validate the flotation process selected for the Escobal project, evaluate reagent type and usage, and to produce samples of lead and zinc concentrates for marketing to potential smelter customers. Overall, the pilot plant validated the results of the prior flotation tests and confirmed the process design selected for the Escobal Mine would produce highly marketable concentrates.

Additional flotation tests were conducted in 2014 on drill samples collected from new areas in the Escobal deposit. Although mineralization in each of these areas appeared to be same mineralogically as samples previously tested from the Escobal deposit, rougher flotation tests were completed as a check of metallurgical compatibility with the Escobal process plant design. Results from the flotation tests demonstrated that metal recovery from ore in each of the three of new areas is similar to previous flotation test results and modifications to the process design were not required.

The Company continues to routinely conduct metallurgical analysis and testing on site as required to assess mill performance and to optimize metal recovery.

Annual Information Form for the Year Ended December 31, 2017 43

MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

The Mineral Resource estimate for the Escobal Mine, effective January 1, 2018, is summarized below:

ESCOBAL MINERAL RESOURCES
Classification	Tonnes (M)	Silver (g/t)	Gold (g/t)	Lead (%)	Zinc (%)	Silver (Moz)	Gold (koz)	Lead (kt)	Zinc (kt)
Measured	4.8	374	0.33	0.68	1.20	58	51	33	58
Indicated	36.3	271	0.29	0.62	1.02	317	337	224	369
Meas + Ind	41.1	283	0.29	0.62	1.04	375	388	256	427
Inferred	1.9	180	0.90	0.22	0.42	11	54	4	8

Note: Mineral Resources are reported using a 100 g/t silver-equivalent cut-off grade. Silver-equivalent calculated using metal prices of US$20.00/oz silver, US$1,300.00/oz gold, $US1.00/lb lead and US$1.10/lb zinc. Totals may not sum due to rounding.

Mineral Resources for the Escobal vein are supported by samples obtained through surface and underground diamond drilling. The Escobal Mine Mineral Resources were estimated by defining the geologic model, evaluating the drill data statistically, interpreting mineral domains for silver, gold, lead and zinc on cross sections and refining the domains on level plans, analyzing the modeled mineralization statistically to establish estimation parameters, and separately estimating silver, lead, gold, and zinc grades into a three-dimensional block model using inverse distance cubed (ID³). The Escobal Mineral Resource estimate at January 1, 2018 was calculated by subtracting mine depletion volumes (tonnes and contained metal) from the Mineral Resources stated in the Escobal Feasibility Study.

The Mineral Resource estimate has been classified as Measured, Indicated and Inferred based on the confidence of the input data, geological interpretation and grade estimation parameters. The Mineral Resource estimate was prepared in accordance with NI 43-101, and classifications adopted by the CIM Council.

The Mineral Reserve estimate for the Escobal Mine, effective January 1, 2018, is summarized below:

ESCOBAL MINERAL RESERVES
Classification	Tonnes (M)	Silver (g/t)	Gold (g/t)	Lead (%)	Zinc (%)	Silver (Moz)	Gold (koz)	Lead (kt)	Zinc (kt)
Proven	2.5	486	0.42	1.02	1.75	40	34	26	44
Probable	22.1	316	0.34	0.77	1.25	225	244	170	276
Prov + Prob	24.7	334	0.35	0.79	1.30	264	278	196	320

Totals may not sum due to rounding.

Mineral Reserves as of January 1, 2018 were calculated by applying an updated mine plan to the Mineral Resource estimate stated in the Escobal Feasibility Study taking into account mining depletion through the end of 2017.

Cut-off grades to define the January 1, 2018 Mineral Reserves were calculated from the NSR value of the resource model blocks contained within the life-of-mine plan minus the production cost to account for variability in mining method and metallurgical response. Metal prices used to determine the NSR value are US$20.00 per ounce silver, US$1,300.00 per ounce gold, US$1.00 per pound lead and US$1.10 per pound zinc. Actual mining, processing and general and administrative (G&A) costs, metallurgical performance and smelter contract rates from the Escobal Mine were used to derive operating costs used in the reserve calculation.

Proven and Probable Mineral Reserves include approximately 33% dilution that takes into account internal and external mining dilution and dilution from paste backfill where applicable. Subeconomic material internal to the stope designs and external mining dilution account for approximately 30% of the dilution total and paste backfill dilution accounts for about 3% of the dilution total. Resources within the mine plan classified as Inferred have been given metal grades of zero for the calculation of Mineral Reserves.

The Escobal Mineral Reserve estimate is based on known inputs that include metallurgical performance, taxation/royalty obligations, geologic and geotechnical characterization, operational costs, and other economic parameters. There are currently no known factors that may have a negative material impact on the Mineral Reserves at the Escobal Mine. The Mineral Reserve estimate was prepared in accordance with NI 43-101 and classifications adopted by the CIM Council. Mineral Resources are inclusive of Mineral Reserves.

44 Tahoe Resources Inc.

MINING OPERATIONS

The Escobal Mine is accessed via two primary declines which provide access to the Central and West zones of the deposit. The East Zone is accessed by an internal ramp. Accesses to the orebody are driven from the main ramp system to establish sublevel footwall laterals drifts driven parallel to the vein on 25m vertical intervals. Primary and secondary development headings are mined 5 m wide by 6 m high with arched backs. The primary ramps are typically driven at a maximum gradient of -15%.

Mining at Escobal is done by transverse longhole stoping with future mining by a combination of transverse and longitudinal longhole stoping. The mining method selected for Escobal provides reasonable cost benefits and selectivity for this type of deposit. Ore is hauled to the surface by truck to the ore stockpile, located proximal to the primary crusher. Development waste rock is hauled by truck to the surface and used as construction material for the dry stack tailings buttress. The nominal production rate at the Escobal Mine is 4,500 tonnes per day.

Filtered tails from the process plant are combined with cement and water to make a structural fill (paste backfill) for filling the underground voids produced from stope mining. The paste backfill plant is centrally located on the surface above the Central zone and produces backfill for delivery via a system of ceramic-lined steel and HDPE pipe into the mine for placement in the mined-out stopes to provide stability to the excavated openings and allow for maximum recovery of the resource.

PROCESSING AND RECOVERY OPERATIONS

Ore from the Escobal Mine is processed by differential flotation producing lead concentrates with high precious metal (silver and gold) grades and zinc concentrates with a lesser precious metal component. The process facility operates at a nominal 4,500 tonnes per day. The Escobal processing facility performance in terms of throughput and metal recovery generally meets or exceeds design expectations.

Ore is transported from the underground mine to a stockpile located proximal to the primary crusher, from where it is delivered by front end loader to the crusher. The ore is reduced via a three stage crushing circuit followed by a single ball mill. Metal is recovered from the ball mill slurry discharge by a conventional lead-zinc differential flotation circuit consisting of tank cells with separate circuits for lead and zinc. Lead and zinc concentrates produced at the concentrator facility are filtered, packaged into super sacks, and placed in containers and loaded onto trucks for shipment to port for delivery to commercial concentrate smelters and metal refineries.

The following table summarizes the process plant production and performance for the past three years:

	ESCOBAL CONCENTRATE PRODUCTION 2015-2017
Year	Product2	Tonnes (kt)	Contained Metal				Recovery (%)
			Silver (Moz)	Gold (koz)	Lead (kt)	Zinc (kt)	Silver	Gold	Lead	Zinc
2015	Lead Concentrate	23.8	19.3	10.8	10.2	2.7	81.6	57.5	87.5	13.9
	Zinc Concentrate	28.1	1.1	0.9	0.3	14.8	4.7	5.3	2.6	77.4
2016	Lead Concentrate	22.5	19.7	9.6	10.0	2.4	80.6	54	87.2	12.6
	Zinc Concentrate	27.6	1.5	1.1	0.3	15.0	6.1	6.2	3.0	78.6
2017	Lead Concentrate	9.4	9.0	3.9	4.2	1.1	80.2	54.3	86	13.3
	Zinc Concentrate	11.3	0.7	0.4	0.1	6.1	6.2	5.8	3.0	76.0

Notes:

1. 2017 production through June 7, 2017.

2. Lead concentrates contain payable silver, gold and lead; zinc concentrates contain payable silver, gold and zinc.

INFRASTRUCTURE, PERMITTING AND COMPLIANCE ACTIVITIES

The Escobal Mine workings, processing plant, tailings and waste disposal areas, effluent management and treatment systems, ancillary facilities, roads and power lines have already been constructed and are located within the boundaries of the exploitation license and surface lands owned by the Company. The majority of the Escobal workforce is derived from communities within Santa Rosa department and elsewhere in Guatemala, with a small expatriate contingency.

The Escobal Mine tailings repository is designed and operated as a dry-stack facility, in which filtered (dewatered) tailings are spread in 30 centimetre lifts, compacted and graded for erosion control and stability. The use of dry-stacked tailings was selected and implemented at Escobal as an effective method to create

Annual Information Form for the Year Ended December 31, 2017 45

a geotechnically sound and environmentally safe facility that, upon closure, will become a long-term stable geomorphic form in the landscape. Over the life of the mine, approximately 50% to 60% of the tailings will be placed in the facility, with the remainder of the tailings returned underground as paste backfill.

Power for operations at Escobal is provided by on-site diesel generation capable of sustaining approximately 21.5 MW of power. The nominal operating requirement for mining, processing and surface operations is 7.5 MW to 8.5 MW.

All process and domestic water required for operations is supplied from mine dewatering and dedicated domestic water wells. Hydrologic studies demonstrate sufficient water will be available to meet process and non-potable water requirements for the life of the mine. Potable water is brought to the mine from outside sources as needed.

Guatemala has ports on both the Pacific and the Caribbean coasts. Access to the mine site from both ports is on paved highway. Filtered concentrate is placed in one or two tonne super-sacks, placed in sea-going containers, and carried on highway tractor trailer units along paved highway to port for shipment to international smelters.

The Escobal Mine operations are conducted under an EIS approved by MARN and an exploitation license issued by MEM. The export of concentrates is licensed through MEM, with annual renewal requirements. Land use changes and vegetation clearing and reforestation are permitted through Guatemala’s National Institute of Forests. Archeological clearances were issued by the Ministry of Culture and Sports. Other than an export credential which has not been renewed by MEM following its expiration in August, 2017, to the best of Tahoe’s knowledge, all other permits and licenses required to conduct its activities at the Escobal Mine have been obtained and are currently in good standing. See "Description of Tahoe’s Business - Risk Factors Relating to Tahoe’s Business".

Tahoe has implemented a comprehensive Environmental Impact Management Program developed specifically for the conditions at Escobal, which addresses operating, reporting, and mitigation procedures for surface and underground operations. Based on Tahoe’s due diligence in respect of the Escobal acquisition, its completed and approved EIS and its activities at the Escobal Mine since that time, the Company has identified and, where applicable, mitigated potential material environmental liabilities through its Environmental Impact Management Program.

The Company’s environmental management mandate is to meet or exceed North American standards, practices and regulations and the Escobal Mine has been designed so that no impacted materials are directly discharged from the site. Impacted water is treated when necessary to meet or exceed Guatemalan and industry standards prior to being released into the environment. Tahoe’s Environmental Impact Management Program for the Escobal project commenced in 2011 and includes the following:

• Filtered and dry stacked tailings;

• Lined storm water and waste water facilities;

• A concurrent reclamation program;

• Process water recovery and recycling;

• Process/contact water treatment systems;

• Surface and groundwater monitoring programs; and

• Underground paste backfill.

The Company estimates the undiscounted amount of asset retirement obligations at US$10.3 million to reclaim the Escobal Mine at the end of the mine life. As at December 31, 2017, Tahoe had recorded the present value of this closure and reclamation obligation.

CAPITAL AND OPERATING COSTS

In 2017, sustaining capital costs expended at the Escobal Mine totaled US$22.9 million, as summarized below:

46 Tahoe Resources Inc.

ESCOBAL 2017 CAPITAL EXPENDITURES (US$M)
Mine Development & Drilling	$	6.1
Infrastructure & Facilities	$	3.3
Mill Infrastructure Items	$	2.3
Tailings Facility	$	1.4
Mobile Equipment Rebuilds & Replacements	$	5.5
Other	$	4.3
Total 2017 Capital Expenditures	$	22.9

Totals may not sum due to rounding.    

There were no project capital expenditures at Escobal in 2017 and no project capital is forecasted for 2018.

Production cash costs in 2017 averaged US$88.95 per ore tonne processed, as summarized below:

ESCOBAL 20171 PRODUCTION COSTS (US$/tonne processed)
Mine Operations	$42.40
Process Operations	$23.94
Surface Operations	$3.03
Site General & Administration	$19.59
Total Production Costs	$88.95

1. Production costs through June 2017

Due to the suspension of operations at Escobal, the Company is not able to provide reliable 2018 capital and operating cost estimates for Escobal at this time.

EXPLORATION, DEVELOPMENT AND PRODUCTION

Exploration in late 2016 through 2017 at Escobal concentrated on drill testing the deep ‘Gap’ zone situated between the Central and East Escobal zones, drilling 17 core holes approximately 10,500 metres from underground platforms. Tahoe plans to continue the in-mine exploration program with approximately 8,500 metres of drilling planned in 2018. Due to the suspension of operations at Escobal, the Company is not able to provide reliable 2018 production estimates for Escobal at this time.

THE LA ARENA MINE

CURRENT TECHNICAL REPORT

The most recent technical report on the La Arena property, filed in accordance with NI 43-101 is Technical Report on the La Arena Project, Peru, dated February 20, 2018 with an effective date of January 1, 2018 and available on SEDAR at www.sedar.com and on the Company’s website at www.tahoeresources.com. The technical report provides an update to the current La Arena Mine oxide open pit heap leach operation and presents a Preliminary Economic Assessment of the La Arena II copper-gold porphyry project adjacent to the current operation.

PROJECT DESCRIPTION, LOCATION AND ACCESS

The La Arena Mine property includes the open pit, heap leach La Arena oxide gold mine currently in operation and an adjacent porphyry-hosted copper and gold deposit currently under study (referred to as “La Arena II”). La Arena is located in northern Peru, 480 kilometres north-northwest of Lima, Peru, in the Huamachuco District, Department of La Libertad. The project area is situated along the eastern slope of the western Cordillera, close to the continental divide at an average altitude of 3,400 metres above sea level. Primary access to La Arena is via a 165 kilometre national paved roadway from the coastal city of Trujillo.

There are several seaports available to the Company for equipment import - the Port of Callao in Lima, Port of Paita (northern Peru) and Port Salaverry at Trujillo. There are daily commercial flights between Lima and Trujillo on Peruvian national airlines.

The La Arena property is 100% owned by the Company through its wholly-owned subsidiary La Arena S.A. and is comprised of 26 concessions, totaling approximately 30,857 hectares, owned by and registered to La Arena S.A. Annual concession maintenance fees are US$3.00 per hectare. To the best of the Company’s knowledge,

Annual Information Form for the Year Ended December 31, 2017 47

the mining concessions are in good standing and there are no material litigation or legal issues adversely impacting the mining concessions comprising the project.

All Mineral Resources identified thus far in the La Arena deposits are completely contained within the mining concession, Acumulación La Arena, and owned by the Company free of any underlying agreements and/or royalties payable to previous private owners. There are ten mining concessions either encompassed by, or adjacent to, the Acumulación La Arena concession that are subject to NSR royalties ranging from 1.4% to two percent payable to the previous land owners.

In addition to the Modified Mining Royalty (“MMR”) described in “Doing Business in Guatemala, Peru and Canada - Taxation - Royalties” above, federal royalty payments and statutory contributions include:

Minimum Production Obligation - titleholders of metallic mining concessions must reach a minimum level of annual production of at least one Tax Unit of 3,850 Peruvian Soles (S/.) per hectare and three Tax Units within a period of ten years.

OSINERGMIN Contribution - payments of 0.15% of the value of monthly operating costs are made to El Organismo Supervisor de la Inversión en Energía y Minería (“OSINERGMIN”), Peru’s state energy and mines investment regulator.

OEFA Contribution - annual NSR royalty payments of 0.11% are made to El Organismo de Evaluación y Fiscalización Ambiental (“OEFA”), the government agency of record that inspects and audits mining operations to ensure compliance with environmental obligations and commitments.

Both the OSINERGMIN Contribution and OEFA Contribution are made net of the national Value Added Tax and the Municipal Promotion Tax. As of the date of this AIF, all royalty and contribution payment obligations were current.

The Company is not currently aware of any material permitting or environmental liabilities to which the property is subject. As with many mining projects in Peru, community groups or NGOs may initiate or undertake actions that could restrict access to the property or interrupt the Company’s activities. See "Description of Tahoe’s Business - Risk Factors Relating to Tahoe’s Business".

HISTORY

Gold mineralization at La Arena was first discovered by Cambior Inc. in December 1994. Cambior staked a claim for mining concessions of 1,800 hectares over the current La Arena oxide and porphyry deposits in January 1995. The mining concessions comprising the La Arena project passed to Iamgold following its acquisition of Cambior in 2006.

Rio Alto Mining Limited (“Rio Alto”) entered into an option and earn-in agreement with Iamgold Quebec Management Inc. in June 2009 which provided it with an option to acquire 100% of La Arena S.A., the Peruvian company that owned the La Arena project. In February 2011, Rio Alto exercised its option and acquired 100% of the La Arena project. Tahoe completed its acquisition of Rio Alto in April 2015 and assumed ownership of La Arena S.A. and the La Arena project.

GEOLOGICAL SETTING, MINERALIZATION AND DEPOSIT TYPES

La Arena is located in a prolific metallogenic province that contains many precious and polymetallic mines and projects such as Lagunas Norte Santa Rosa, La Virgen, Quiruvilca, Tres Cruces, Igor, and the Company’s Shahuindo Mine.

The La Arena oxide gold deposit currently in production contains epithermal gold mineralization that is both lithologically and structurally controlled, occurring principally in silicified fractured sandstones and hydrothermal breccias within the Chimu Formation. Higher grade gold mineralization is typically found at fault/fracture intersections and along high-angle structures (locally termed “Tilsa” structures) that likely emanate from the adjacent porphyry body.

Copper and gold mineralization is hosted in a multi-stage dacitic to andesitic porphyry intrusion. Mineral zonation from surface downwards consists of a thin oxidized zone grading into a zone of secondary enrichment (chalcocite + covellite ± copper oxides) ranging from ten to locally 50 metres thick which overlies a mixed oxide-sulfide zone (chalcocite + chalcopyrite ± covellite). The vast majority of porphyry-hosted mineralization is sulfide; primary sulfide minerals are chalcopyrite and pyrite with accessory molybdenite, pyrrhotite, sphalerite, galena, arsenopyrite, marcasite, native gold and rutile.

Mineralization identified to date at La Arena extends over a strike length of 2.2 kilometres north-south, a width of 1.1 kilometres east-west, and 1,000 metre vertical extent.

48 Tahoe Resources Inc.

EXPLORATION

Cambior identified mineralization at La Arena through field reconnaissance programs of geologic and alteration mapping, and rock chip and soil sampling. Rio Alto continued to characterize the La Arena deposits and applied this criteria, including structural mapping, mineral-spectral analysis (ASTER), soil geochemistry, stream sediment sampling, and aeromagnetic surveys, to acquire additional mining claims around the La Arena deposits. These techniques identified several additional prospects in the district which the Company is systematically evaluating.

It is likely that some artisanal mining occurred in the La Arena oxide deposit, though no record of activity is known to the Company.

DRILLING

The principal methods of exploration at La Arena have been diamond core drilling and reverse-circulation drilling (RC). Core drilling has primarily been done with HQ and, to a lesser degree, NQ size core. The oxide gold deposit has been drilled to a nominal 25 metre spacing; the porphyry deposit has been drilled to a nominal 50 metre spacing. The drill spacing is generally sufficient to characterize the oxide gold deposit, though it has been recognized during the course of mining operations that some occurrences higher-grade structurally-controlled gold mineralization has been underrepresented by the drill density. Drill density in the porphyry deposit is sufficient to model the different porphyry phases and characterize the resource with confidence.

SAMPLING, ANALYSIS AND DATA VERIFICATION

Diamond drill core is logged for geological, structural and geotechnical information. The drill core is routinely photographed prior to logging. Core samples are collected with sample breaks generally corresponding to geologic contacts. Sampling of core from exploration programs prior to 2011 consisted of chiselling the core in half. The standard procedure for core sampling since 2011 is to cut the drill core lengthways with a diamond saw, with half of the core sent for assay.

Reverse circulation drill cuttings are logged for geological features and collected at two-meter intervals and quartered in riffle splitters. Sub-samples weighing approximately 6 kg are collected in cloth-lined sample bags.

Sample preparation methods prior to 2003 are not documented. Since 2003, sample preparation consists of digitally weighing the samples, drying the samples to a maximum of 120ºC (for wet samples), crushing the samples to 70% passing 2 mm (10 mesh), riffle splitting to 250 g, and pulverizing to 85% passing 75% ìm (200 mesh). Subsample size of 50 g pulps are submitted for analysis.

Reference material is retained and stored on site, including half-core, photographs generated by diamond drilling, duplicate pulps and pulps of all submitted core and reverse circulation samples. All pulps are stored at the La Arena core shed.

Chemical analysis at the primary laboratory (ALS Chemex since 2005) and the secondary laboratory (CIMM Peru) consisted of fire assay (FA) with atomic absorption spectrometry (AAS) finish, using 50 g sub-samples. Those samples that returned grades ≥ 5 g/t gold were analysed using gravimetric methods. Four-acid digestion followed by AAS is used to analyze for copper, silver, molybdenum, lead, zinc, arsenic, antimony, and bismuth. Mercury is analysed using cold vapour AAS. In 2010, Rio Alto changed to the primary laboratory to CERTIMIN (previously CIMM Peru), with the secondary laboratory being ALS Chemex. The Company has continued this practice.

There is little information regarding QA/QC practices by previous owners of the La Arena property prior to 2004. Since 2004, systematic QA/QC programs have been implemented, including the use of assay control samples, blank samples, blind duplicate samples, and third-party analyses. The Company continually audits and validates the drill hole database and is confident sufficient controls and checks are in place to ensure that the data collection is reliable, assay results reproducible, and the database is of such quality as to support its use in the estimation of Mineral Resources.

MINERAL PROCESSING AND METALLURGICAL TESTING

Oxide

Numerous metallurgical test programs have been conducted by La Arena S.A. and independent metallurgical laboratories on the La Arena oxide ores beginning in 2010 and continuing to the present.

In 2010, Heap Leach Consulting S.A.C. (“HLC”) conducted the initial column leach tests on oxidized sandstone from the La Arena deposit to determine gold recovery, gold extraction rates, and reagent consumption. The

Annual Information Form for the Year Ended December 31, 2017 49

results of the test work showed an average gold recovery from run-of-mine material of 90.6% was achieved after 45 days of leaching, with lime and sodium cyanide consumption of 1.2 kg/t and 0.09 kg/t, respectively.

La Arena S.A. conducted column tests on run-of-mine material in 2012, which yielded an average gold recovery of 87.4% after 45 days. Lime and cyanide consumption were consistent with the prior HLC test results.

In 2013 and 2014, CERTIMIN S.A., SGS del Peru, and La Arena S.A each assessed the leaching characteristics of the oxidized porphyry intrusive by conducting multiple column leach tests and larger-scale dump leach tests. During the initial year of operation, it became apparent to La Arena S.A. that, due to the presence of clays in the porphyry, the intrusive must be blended with sandstone prior to placement on the leach pads to achieve optimal percolation and gold recovery. The results of this test work suggested the optimal blend of sandstone-to-intrusive to be from 4:1 to 3:1, with gold recoveries ranging from 79.6% to 81.1% after 51 days of leaching. Blending ratios lower than 3:1 produced less than desirable percolation rates.

Actual operational recovery is consistent with the results of the various metallurgical tests, with an average gold recovery of approximately 86% achieved to date at the La Arena oxide operation.

Sulfide

Between 2006 and 2013, SGS Lakefield and ALS Metallurgy conducted multiple metallurgical testing programs on the copper-gold porphyry to evaluate the metallurgical response to flotation recovery processes. Test work included bond rod and ball mill work indices tests, abrasion index determinations, JK drop weight tests, SAG mill comminution tests, variability flotation tests, locked cycle tests, and tailings rheology studies.

Locked cycle testing is the preferred method for arriving at a metallurgical projection from laboratory testing as the final cycles of the test are designed to simulate a continuous, stable flotation circuit. Copper recoveries from locked cycle tests completed on sample composites and variability samples from the copper-gold porphyry ranged from 64.7% to 94.2%; gold recoveries to the copper concentrate ranged from 16.9% to 74.7%. Copper and gold concentrate grades from the locked cycle tests ranged from 20.7% to 32.9% and from 4.2 g/t to 8.3 g/t, respectively. Mercury was identified as a potentially deleterious penalty element in the final copper concentrate product, but can likely be mitigated through blending of mill feed material.

Metallurgical simulation (METSIM^®) studies conducted by M3 Engineering and Technology in support of the Preliminary Assessment of La Arena II predicts average copper and gold recoveries to the final copper concentrate product of 85.6% and 58.7%, respectively, from the sulfide portion of the porphyry deposit. Unlike prior process flowsheets, the envisioned processing scheme will be differential flotation, where pyrite is depressed prior to copper flotation and reactivated to create a separate pyrite concentrate.

MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

La Arena Mine

The Mineral Resource estimate for the La Arena Mine, effective January 1, 2018, is summarized below:

LA ARENA MINE MINERAL RESOURCES
Material Type	Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Oxide	Measured	0.3	0.38	3.3
	Indicated	49.6	0.40	640.2
	Meas + Ind	49.9	0.40	643.5
	Inferred	0.4	0.32	4.3

Totals may not sum due to rounding.

Oxide mineralization for the La Arena Mine was modeled into four large low-grade domains, and a series of higher-grade domains that generally correspond to sub-vertical Tilsa structures. The lower-grade domains use a nominal 0.05 g/t cut-off grade as a hard boundary as this represents a natural break in the gold population distribution and it is below the current open pit operational cut-off grade of 0.10 g/t. Tilsa-style structures have a core (+/-1m) of very high grade but are typically not well defined by drilling due to a combination of thickness and orientation of the structures. Therefore, a nominal cut-off grade of 0.5 g/t was used to ‘bulk up’ these structures into broader zones. This also facilitated more depth and strike length to the interpretations. Estimation methods used were Localized Uniform Conditioning for the low-grade oxide domains and Ordinary Kriging for the Tilsa structure domains and background material. Samples from core drilling and RC drilling were used to estimate the Mineral Resources; blasthole samples were not used in the estimate. The oxide resource is reported at a cut-off grade of 0.10 g/t Au within an optimized undiscounted cash flow pit shell using a metal price of US$1,400/oz Au and actual costs experienced at the La Arena Mine.

50 Tahoe Resources Inc.

The La Arena Mine Mineral Resource estimate at January 1, 2018 was calculated by applying the mine topographic surface at January 1, 2018 to an updated Mineral Resource estimate completed in mid-year 2017. The Mineral Resource estimate has been classified as Measured, Indicated and Inferred based on the confidence of the input data, geological interpretation and grade estimation parameters. The Mineral Resource estimate was prepared in accordance with NI 43-101, and classifications adopted by the CIM Council.

The Mineral Reserve estimate for the La Arena Mine, effective January 1, 2018, is summarized below:

LA ARENA MINE MINERAL RESERVES
Material Type	Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Oxide	Proven	0.3	0.38	3
	Probable	43.7	0.40	565
	Prov + Prob	44.0	0.40	568

Totals may not sum due to rounding.

Oxide Mineral Reserves for the La Arena Mine are reported at a 0.10 g/t gold cut-off grade and have been constrained to the final pit design based on an optimized pit shell using US$1,200 per ounce gold and actual operating costs incurred. The Mineral Reserves were calculated from Measured and Indicated oxide Mineral Resources. As the resource block model is a diluted block model, no additional dilution or mining losses were applied. The life-of-mine strip ratio is 1.9 (waste:ore).

The La Arena Mine Mineral Reserve estimate was based on known inputs that include metallurgical performance, taxation/royalty obligations, geologic and geotechnical characterization, operational costs, and other economic parameters. The Company is not currently aware of any factors that are reasonably likely to have a negative material impact on the Mineral Reserves at La Arena. The Mineral Reserve estimate was prepared in accordance with NI 43-101, and classifications adopted by the CIM Council. Mineral Resources are inclusive of Mineral Reserves.

La Arena II

The Mineral Resource estimate for the La Arena II project, effective January 1, 2018, is summarized below:

LA ARENA II MINERAL RESOURCES
Material Type	Classification	Tonnes (M)	Gold (g/t)	Copper (%)	Gold (koz)	Copper (Mlbs)
Oxide	Measured	5.9	0.27	—	51	—
	Indicated	43.2	0.28	—	388	—
	Meas + Ind	49.1	0.28	—	440	—
	Inferred	41.3	0.26	—	349	—
Sulfide1	Measured	149.7	0.25	0.39	1,214	1,279
	Indicated	543.5	0.23	0.38	3,984	4,511
	Meas + Ind	693.2	0.23	0.38	5,197	5,790
	Inferred	50.4	0.21	0.31	344	349

Mineral Resources for the La Arena II copper-gold porphyry deposit were estimated by defining the various intrusive phases of the porphyry package, evaluating the drill data statistically, interpreting mineral domains for copper and gold on cross sections and refining the domains on level plans, analyzing the modeled mineralization statistically to establish estimation parameters, and separately estimating copper and gold grades into a three-dimensional block model using ID³. The La Arena II Mineral Resources are reported within an optimized undiscounted cash flow pit shell using metal prices of US$4.00 per pound copper and US$1,500 per ounce gold and operating cost parameters developed for the La Arena II PEA. Oxide Mineral Resources are reported using a 0.10 g/t gold cut-off grade; sulfide Mineral Resources are reported using a 0.18% copper-equivalent cut-off grade.

The Mineral Resource estimate has been classified as Measured, Indicated and Inferred based on the confidence of the input data, geological interpretation and grade estimation parameters. The Mineral Resource estimate was prepared in accordance with NI 43-101, and classifications adopted by the CIM Council.

There are no Mineral Reserves reported for La Arena II.

Annual Information Form for the Year Ended December 31, 2017 51

MINING OPERATIONS

The La Arena oxide mine is an open pit, run-of-mine heap leach operation that is currently exploiting the near-surface oxide gold reserve. The conventional truck and loading unit method of mining provides reasonable cost benefits and selectivity for this type of deposit. Oxide ore has been mined from Calaorco and Ethel pits; all production currently comes from the Calaorco pit, as the Ethel pit has been exhausted. The mining rate is currently approximately 36,000 tonnes of ore per day. The Calaorco pit is mined in eight metre high benches by conventional drill and blast methods. Loading is with 170 tonne face shovels and a fleet of predominantly 92 tonne trucks. Ore is truck dumped in either 8 metre or 16 metre lifts onto the leach pads, with no crushing or agglomeration required prior to irrigation.

PROCESSING AND RECOVERY OPERATIONS

Ore extracted by the current oxide mining operation is predominantly sediment-hosted gold, with a lesser component of oxidized porphyry intrusive. Due to the presence of clay, the intrusive is blended with sandstone for optimal gold recovery.

After the ore is placed on the leach pad, cyanide leach solution is sprayed onto each leach pad cell for a nominal period of 60 days. The pregnant solution flows onto the geomembrane underlying the pad to a central collection point and into the pregnant solution pond. Pontoon mounted pumps in this pond are used to pump the solution to the adsorption, desorption and refining (ADR) plant located approximately 300 metres north of the leach pad. The plant currently has the capacity to treat solution from 36,000 tonnes per day of ore placed on the pad. The process includes absorption onto carbon pellets and desorption in high caustic/high temperature leach columns. The carbon is sent to regeneration and the enriched solution is sent to electro-winning cells where a cathode is used to produce a fine-grained precipitate. The precipitate is filtered and dried, then smelted to produce doré bars of approximately 80% gold.

Production from the La Arena Mine since the Company’s acquisition of Rio Alto on April 1, 2015 is shown in the following:

LA ARENA MINE PRODUCTION 2015-2017
Year	Ore Placed on Pad			Gold Ounces Produced (k)
	Tonnes (M)	Gold (g/t)	Gold Ounces (k)
20151	9.7	0.61	189.8	174.1
2016	15.3	0.49	241.0	204.1
2017	12.9	0.49	203.3	195.6

¹Production from April thru December 2015

Gold recovery over the past three years has met or exceeded 86%. Average lime and cyanide consumption is 0.675 kg/t and 0.098 kg/t for sandstone, respectively, and 0.928 kg/t and 0.090 kg/t, respectively, for blended sandstone-intrusive ore leaching.

INFRASTRUCTURE, PERMITTING AND COMPLIANCE ACTIVITIES

The La Arena Mine open pit, leach pads, waste rock dumps, ADR plant and ancillary facilities have already been constructed and are located within the boundaries of the mining concessions and surface lands owned by the Company. The workforce is derived from the local area and from elsewhere in Peru, with a small expatriate contingency. La Arena S.A. operates an on-site camp for employees not residing in the local area.

The La Arena Mine site is connected to the Peruvian power supply grid which has sufficient capacity for current and future operations. All water required for operations is derived from water wells located on Company lands. Hydrologic studies demonstrate sufficient water is available to meet process and non-potable water requirements for the life of the Calaorco pit. Potable water is brought to the mine from outside sources as needed.

The La Arena Mine operates under an approved Environmental Impact Assessment (EIA), originally approved in 2010, and includes commitments regarding water quality, air quality, and sound level monitoring as well as social management programs. The original EIA has been periodically modified to accommodate leach pad and waste rock dump expansions. In 2017, a modification of the EIA was approved to increase the production rate from 36,000 tonnes per day to 46,000 tonnes per day. Other permits received include:

52 Tahoe Resources Inc.

• Certificate for the Inexistence of Archaeological Remains;

• Mine Closure Plan;

• Beneficiation Concession;

• Water usage permit;

• Mining Plan; and

• Operations Permit.

All permits necessary to operate the La Arena oxide mine are current and in good standing.

Environmental mitigation measures at La Arena include:

• Water treatment plant;

• Leach solution detoxification plant;

• Water catchment “raincoats” over leach pads for water conservation;

• Progressive reclamation programs;

• Surface and groundwater sampling programs; and

• Stormwater and freshwater diversions.

The mine closure plan has been approved by the Peruvian MEM. The Company estimates the undiscounted amount of asset retirement obligations at US$43.7 million for concurrent reclamation activities and post-closure reclamation of the La Arena Mine. As at December 31, 2017, Tahoe had recorded the present value of this closure and reclamation obligation.

CAPITAL AND OPERATING COSTS

In 2017, sustaining capital costs expended at the La Arena Mine totaled US$32.0 million, as in the table. There were no project capital expenditures in 2017.

LA ARENA MINE 2017 CAPITAL EXPENDITURES (US$M)
Mine Development (incl. deferred stripping & waste dump construction)	$8.1
Infrastructure & Facilities	$0.2
Processing (incl. leach pad expansion)	$21.4
Land Purchases	$2.3
Other Sustaining Capital	$6.1
Total 2017 Capital Expenditures	$32.0

The Company expects to spend approximately US$38.0 million on sustaining capital in 2018, as summarized below:

LA ARENA MINE 2018 SUSTAINING CAPITAL EXPENDITURE ESTIMATE (US$M)
Mine Development (incl. deferred stripping & waste dump construction)	$17.8
Infrastructure & Facilities	$0.1
Processing (incl. leach pads & water treatment plant expansion)	$14.2
Land Purchases	$5.3
Other Sustaining Capital	$0.5
Total 2018 Capital Expenditure Projection	$38.0

Operating costs in 2017 averaged US$8.91 per tonne ore, as summarized below. The Company expects 2018 operating costs to be in line with the 2017 costs.

LA ARENA MINE 2017 PRODUCTION COSTS (US$/tonne)
Mine Operations	$5.42
Process Operations	$1.01
Site General & Administration	$2.48
Total Production Costs	$8.91

Annual Information Form for the Year Ended December 31, 2017 53

EXPLORATION, DEVELOPMENT AND PRODUCTION

In 2018, Tahoe anticipates producing between 160 and 170 thousand ounces of gold from the La Arena Mine oxide open pit operation. Tahoe plans to undertake a minimum of 3,100 metres of drilling targeting resource expansion in the Calaorco pit in 2018.

The Company has experienced positive mine production reconciliations relative to the resource/reserve model in the lower benches in the Calaorco pit. Mining in 2017 has revealed an increase in the density and extent of higher-grade Tilsa and associated structures that were not evident with the current drill density in the lower portions of the reserve. Drilling to better define the resource with the potential to increase Mineral Reserves below the current pit levels was initiated in late 2017, with two holes totaling 737 metres completed by year end and the remainder of the 4,400 metre programed planned for Q1 2018.

Exploration during 2017 included deep drilling at La Arena II, with completion of 1,100 metres in one diamond drill hole. In addition, three drill holes totaling 1,850 metres were completed to provide samples for further metallurgical studies.

Field studies focused on defining drill targets were carried out at the Agua Blanca target east of the La Arena Mine in the second half of 2017. The Company has budgeted approximately 6,000 metres of exploration drilling at Agua Blanca in 2018.

LA ARENA II PRELIMINARY ASSESSMENT

The February 2018 technical report for the La Arena property includes a PEA of the La Arena II copper-gold porphyry project. The prior feasibility study issued by Rio Alto in 2015 considered a small capital-constrained project with strict financial hurdles. The resulting Mineral Reserve estimate presented in the prior study represented only a small portion of the total Mineral Resources. The Company’s PEA re-evaluates the La Arena copper-gold porphyry project without regard to the capital and operating constraints that were applied to the 2015 prefeasibility study.

Highlights of the PEA include:

• Total Measured and Indicated Mineral Resources of 5.8 billion pounds of copper and 5.6 million ounces of gold. Inferred Mineral Resources total 349 million pounds of copper and 683 thousand ounces of gold.

• Mineral Resources within the mine plan total 5.2 billion pounds of copper and 5.4 million ounces of gold.

• Annual metal recovered averages 207 million pounds of copper and 149 thousand ounces of gold over a 21 year mine life, plus an additional 115 million pounds of copper and 226 thousand ounces of gold recovered over a two year pre-production period. Total copper and gold recovered in concentrate and doré over the life of the project is estimated to be 4.5 billion pounds of copper and 3.4 million ounces of gold.

• Open pit mining rate of 80,000 tonnes of mill feed per day, with flotation processing to create a high-quality copper-gold concentrate. Oxide material would be processed by conventional run-of-mine heap leaching.

• Capital costs estimated at US$1.36 billion for project/initial capital and US$1.09 billion for sustaining capital over the mine life.

• Average annual after-tax cash flow of US$273 million from the commencement of commercial production.

• Average co-product cost of $600 per ounce gold and $1.55 per pound copper.

• Average annual cash operating cost of $395 million. Total operating cost is $12.87 per tonne processed.

• After tax net present value at an 8% discount rate of US$824 million and an internal rate of return of 14.7% with a payback period of 4.6 years at the base case metal prices of US3.30 per pound copper and US$1,300 per ounce gold.

A breakdown of Mineral Resources for the La Arena II project is summarized below:

54 Tahoe Resources Inc.

LA ARENA II MINERAL RESOURCES
Material Type	Classification	Tonnes (M)	Gold (g/t)	Copper (%)	Gold (koz)	Copper (Mlbs)
Oxide	Measured	5.9	0.27	—	51	—
	Indicated	43.2	0.28	—	388	—
	Meas + Ind	49.1	0.28	—	440	—
	Inferred	41.3	0.26	—	349	—
Sulfide1	Measured	149.7	0.25	0.39	1,214	1,279
	Indicated	543.5	0.23	0.38	3,984	4,511
	Meas + Ind	693.2	0.23	0.38	5,197	5,790
	Inferred	50.4	0.21	0.31	344	349
All Material	Measured	155.7	0.25	0.37	1,265	1,279
	Indicated	586.7	0.23	0.35	4,372	4,511
	Meas + Ind	742.4	0.24	0.35	5,637	5,790
	Inferred	91.6	0.23	0.17	683	349

Totals may not sum due to rounding.

Mineral Resources are reported within a US$4.00/lb copper and US$1,500/oz gold pit shell using cut-off grades of 0.10 g/t gold for oxide Mineral Resources and 0.18% copper-equivalent for sulfide Mineral Resources.

Mineral Resources included in the PEA mine plan contain 616 million tonnes of sulfide material at average grades of 0.38% copper and 0.24 g/t gold containing 5.2 billion pounds of copper and 4.8 million ounces of gold, and 69.5 million tonnes of oxide material at an average gold grade of 0.30 g/t containing 669 thousand ounces of gold. Mineral Resources in the mine plan are contained within an optimized pit designed using US$3.30/lb copper and US$1,300/oz gold and operating costs as shown below:

LA ARENA II AVERAGE ANNUAL OPERATING COSTS
	Total ($M)	$/tonne processed	$/tonne mined
Mining	$120.5	$3.93	$1.33
Processing1	$162.9	$5.29
General & Administrative	$27.9	$0.91
Refining & Treatment	$84.0	$2.74
Total	$395.3	$12.87

¹ Processing cost is the weighted average of $1.15 per leach tonne and $5.61per mill tonne

Operating costs include an additional US$0.03 per tonne haulage cost per 16 metre bench has been added to the mining cost to account for increased haulage distances as the pit deepens. Process recoveries for copper are estimated at 87.6% for supergene and sulfide mineralization and 43.8% for transitional oxide-sulfide mineralization. The study considers no copper recovery from oxide heap-leached material. Oxide gold recoveries are 86% for sediment-hosted mineralization and 83% for porphyry-hosted mineralization, in line with the gold recoveries achieved at the La Arena Mine.

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The La Arena II PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the Preliminary Economic Assessment will be realized.

The 2018 La Arena II PEA supersedes the 2015 feasibility study completed by Rio Alto. The prior study included Probable Mineral Reserves of 63.1 million tonnes at average grades of 0.43% copper and 0.31 g/t gold containing 579 million pounds of copper and 633 thousand ounces of gold. There are no Mineral Reserves reported in the 2018 PEA as the scope of the project has changed significantly with a refined geologic model, an updated Mineral Resource estimate, increased mining and processing rates, modified processing scheme, and the use of alternative tailings disposal facilities. While a portion of the data generated for the 2015 feasibility study provides support for some of the assumptions incorporated into the 2018 PEA, much of the mining, processing, geotechnical, hydrological, social, and capital and operating cost parameters used in the 2015 study are no longer applicable to the project as envisioned in the 2018 PEA.

Annual Information Form for the Year Ended December 31, 2017 55

Tahoe expects to continue its evaluation of the La Arena II project with the intent of advancing the project to the prefeasibility or feasibility stage at the appropriate time. The timeline and estimated capital required to progress the project to the next stage are under review and no decisions have been made at this time. The project will be evaluated in the context of existing operations and pipeline opportunities. Tahoe is open to all financial and strategic options available in order to progress the project responsibly and to maximize value for its shareholders.

THE SHAHUINDO MINE

CURRENT TECHNICAL REPORT

The most recent technical report on the Shahuindo Mine, filed in accordance with NI 43-101 is Technical Report on the Shahuindo Mine, Cajabamba, Peru dated January 25, 2016 and available on SEDAR at www.sedar.com and on the Company’s website at www.tahoeresources.com. The technical report summarizes the prefeasibility study of the technical and economic viability of the Shahuindo Mine.

PROJECT DESCRIPTION, LOCATION AND ACCESS

The Shahuindo Mine is an open pit heap leach oxide gold operation which is currently in production. The mine is located in northern Peru, 500 kilometers north-northwest of Lima and 30 kilometres north of the Company’s La Arena property. The project site can be accessed from Cajamarca via approximately 130 kilometers of asphalt-paved highway, with unimproved roads accessing the site from the highway.

There are several seaports available to the Company for equipment import - the Port of Callao in Lima, Port of Paita (northern Peru) and Port Salaverry at Trujillo. There are daily commercial flights between Lima and Cajamarca on Peruvian national airlines.

The Shahuindo Mine comprises one mineral right, Acumulación Shahuindo, which includes 26 mineral titles 100% controlled by Tahoe’s wholly owned subsidiary, Shahuindo S.A.C, with an approximate area of 7,339 hectares. Shahuindo S.A.C. also controls the neighboring Vikingo and Vinkingo I concession covering 1,858 hectares. All concessions are subject to an annual payment of $3 per hectare to the Peruvian government. To the best of the Company’s knowledge, as of the date of this AIF all concessions were in good standing.

Shahuindo S.A.C. has acquired 381 surface rights within the Shahuindo Mine area to date, covering a total area of approximately 2,559 hectares. Some of these surface rights were used to relocate local land owners into new areas. Shahuindo S.A.C. also acquired additional surface rights outside the mining concessions for the same process of relocating land owners. The Company controls sufficient surface lands to accommodate the infrastructure necessary to operate the Shahuindo mining project as envisioned in the Shahuindo Prefeasibility Study.

Federal royalty payments and statutory contributions are as described above under “The La Arena Mine”.

The Company is not currently aware of any material permitting or environmental liabilities to which the property is subject. As with many mining projects in Peru, community groups or NGOs may initiate or undertake actions that could restrict access to the property or interrupt the Company’s activities. See "Description of Tahoe’s Business - Risk Factors Relating to Tahoe’s Business".

HISTORY

Legal rights to the mineral leases of Shahuindo were in dispute between 1996 and 2009. A number of Peruvian, Mexican and Canadian companies have been involved in numerous legal processes that were eventually settled in 2009 with 100% ownership being legally registered to Shahuindo S.A.C. (previously Sulliden Shahuindo S.A.C.), a wholly owned subsidiary of the Company.

Sulliden Shahuindo S.A.C. entered into a Transfer of Mineral Rights and Properties Contract, named Contrato de Transferencia de Propiedades Mineras, with Compañia Minera Algamarca S.A. and Exploraciones Algamarca S.A. covering 26 mineral claims and 41 surface rights, which was formalized by public deed dated November 11, 2002.

Subsequently, the vendors (Compañia Minera Algamarca SA and Exploraciones Algamarca SA), controlled by new stockholders and other companies of the same group, challenged the Transfer of Mineral Rights and Properties Contract and launched a number of judicial proceedings against Sulliden Shahuindo S.A.C. Sulliden Shahuindo S.A.C. also commenced legal proceedings to confirm their rights under this agreement and a number of other judicial proceedings to protect its title to the Shahuindo property. In 2009, Sulliden Shahuindo S.A.C. prevailed and maintained 100% of the mineral claims and surface rights.

56 Tahoe Resources Inc.

In August 2014, Rio Alto acquired all of the outstanding shares of Sulliden Gold Ltd. and became the owner of Shahuindo Mineral claims and surface rights under their Peruvian subsidiary, Shahuindo S.A.C.

In April 2015, Tahoe completed an acquisition of Rio Alto, acquiring control of Shahuindo S.A.C. and the Shahuindo Mineral claims and surface rights. Shahuindo S.A.C. remains as Tahoe’s wholly owned operating company for the Shahuindo Mine. The Company commenced construction of the Shahuindo Mine in 2015, which reached commercial production in May 2016.

GEOLOGIC SETTING AND MINERALIZATION

The Shahuindo deposit is located on the eastern flank of the Andean Western Cordillera in northern Peru, within a regional fold and thrust belt of predominantly sedimentary rocks. The region is particularly well-endowed with mineral occurrences polymetallic and epithermal deposits.

Mineralization at Shahuindo is best described as an intermediate-sulfidation epithermal system, though high-sulfidation mineralization occurs at depth and in the core of hydrothermal breccias. Oxidation of mineralization extends to a depth of 150 metres below surface. In the weathered oxide facies, gold and silver are associated with the presence of jarosite and hematite. In the underlying fresh sulfide facies, gold is typically extremely fine grained with the related mineral species not yet identified.

The principal zone of mineralization in the Shahuindo district occurs in a belt between two large-amplitude regional-scale folds, the Algamarca anticline and the San Jose anticline. The Algamarca anticline is upright and symmetrical with amplitude of at least 400m, whereas the San Jose fold is an asymmetric, overturned, northeast-vergent fold with a shallowly dipping axial surface and amplitude of at least 300m. Important structural elements include fold limbs and fold axial surfaces, fold-related fractures, faults and related extension fractures, breccia dikes and irregular bodies, and igneous intrusive contacts.

The Shahuindo deposit formed in a predominantly intermediate-sulfidation epithermal system of probable Miocene age. Distinguishing characteristics of an intermediate-sulfidation environment include mineral assemblages indicating a sulfidation state between those of high and low sulfidation types, relatively high total sulfide content of five to ten percent in the sulfide environment, presence of silver sulfosalts, and association with andesitic to dacitic volcanics. Magmatic associated fluids are implied. There is no evidence of adularia at Shahuindo, thus ruling out a low-sulfidation environment. There are some observances of enargite at depth, suggesting a mixed intermediate- to high-sulfidation system.

Both structure and lithology control the location, shape, and orientation of the mineralization. The mineralization is hosted within the siliciclastic sandstone-dominant Farrat formation and the underlying sedimentary Carhuaz formation. These sedimentary rocks have been intruded by at least three felsic stocks which tend to be located along faults and cores of anticlinal structures. In addition, the metallurgical recovery of gold is affected by lithology with the identification of five primary geometallurgical domains based on the relationship between lithology and grain size and gold recovery. Modelling the distribution and occurrence of lithologic units / geometallurgical domains is critical to mine planning.

EXPLORATION

Prior to 1990, exploration was conducted by Algamarca on the Shahuindo property, though no public records are available to provide details of Algamarca’s work. From 1990 to 1998, Alta Tecnología e Inversión Minera y Metalúrgica SA (Atimmsa), Asarco LLC (Asarco), and Southern Peru Copper Corp. (Southern Peru) explored the Shahuindo Project area, completing mapping, geochemical sampling, and reverse circulation (RC) and core drilling.

Val Dór Geofisica Peru conducted magnetic and induced polarization geophysical surveys between 2002 and 2012 on behalf of the prior owners of Shahuindo. There have been no additional geophysical surveys completed on the concession since the acquisition of the deposit by Rio Alto in 2014.

Most of the accessible underground adits located on the concession were sampled prior to 2012. Where possible, samples were taken from the adit portal and along the accessible portion of the tunnel. Most samples were vertical and non-continuous. Approximately 140 small adits were sampled.

Detailed soil sampling completed by Sulliden between 2003 and 2012 revealed a series of continuous, parallel gold anomalies in the central and northern areas of the concession. Base metal anomalies were found to the northwest and to the southeast of the concession.

The present exploration strategy at Shahuindo utilizes relatively standard exploration techniques that include detailed surface geologic mapping, surface geochemical sampling, and drill testing. The most effective exploration tool at Shahuindo has been core and RC drilling. Samples have also been collected from

Annual Information Form for the Year Ended December 31, 2017 57

underground workings in the northern portion of the project area which has seen exploitation by informal miners.

DRILLING

The principal methods of exploration at Shahuindo have been diamond core drilling and RC drilling. Core drilling has primarily been done with HQ and, to a lesser degree, NQ size core. The majority of the drilling in the deposit is on a nominal spacing of 25m. The drill spacing and subsequent geologic interpretation based on drill information is sufficient to support the declaration of Mineral Resources and Mineral Reserves.

SAMPLING, ANALYSIS AND DATA VERIFICATION

The Company has limited information regarding sample preparation and analyses for the drill programs prior to the major drill programs by Sulliden beginning in 2003. The drilling prior to Sulliden’s work is considered to be a minimal risk to the estimate of Mineral Resources, as this dataset accounts for only 15% of the data used in the estimate and many of the holes drilled prior to Sulliden have been twinned or offset with new drill holes.

From 2003 to 2012, Sulliden’s sampling and sample dispatch for the Shahuindo Project were carried out under the supervision of Sulliden staff. Samples were sent to ALS Minerals (ALS, formerly known as ALS Chemex) in Lima for sample preparation and analysis. Samples were prepared and analyzed using industry-standard practices, including the use of quality assurance and quality control (QA/QC) duplicates, blanks, and assay standards.

Samples from Rio Alto’s 2014-2016 drill programs were analyzed by CERTIMIN (Lima). Gold was assayed with a 50-gram fire assay using an atomic adsorption finish. Fire assays were repeated using with a gravimetric finish for samples whose initial fire assay results were greater than 10 g/t Au. Tahoe continues to use the CERTIMIN laboratory in Lima as its primary assay lab for its continued drilling at the Shahuindo Mine.

The Company conducted an audit of the Rio Alto assay database in 2015 by comparing the analytical results reported in the hard copy certificates received from the laboratory (CERTIMIN) to the digital database used for the resource estimate. Tahoe compared 100% of the gold and silver assays in the database against the laboratory certificates with no errors detected.

The Company continually audits and validates the drill hole database and is confident sufficient controls and checks are in place to ensure that the data collection is reliable, assay results reproducible, and the database is of such quality as to support its use in the estimation of Mineral Resources.

MINERAL PROCESSING AND METALLURGICAL TESTING

The mineral processing and metallurgical testing that included cyanidation and flotation testing programs have been conducted on composite samples from the Shahuindo Mine by various companies starting in 1996. These companies include Asarco, Compania Minera Algamarca, Sulliden, Rio Alto and Tahoe, with test work conducted at FLSmidth Dawson Metallurgical Laboratories, Heap Leach Consultants, SGS Mineral Services, Kappes, Cassiday & Associates (KCA) and Knight Piesold. The results of the test work by KCA and Knight Piesold are the basis of the processing scheme at Shahuindo.

Results from the cyanidation tests conducted by KCA from 2009 to 2012 and in 2014, and by Shahuindo S.A.C. in 2014 and 2015 on drill core and surface composites were used in the development of the recovery and leach design parameters for use in the prefeasibility study. The results of the testing program indicate excellent gold recoveries at both run-of-mine (ROM) and coarse crush sizes with low to moderate reagent requirements, implying amenability to heap leaching. Silver recoveries were generally low.

KCA conducted compacted permeability tests on crushed samples, both with and without cement, in 2015. The results were variable with two-thirds of the columns passing the compacted permeability tests at a simulated heap height of approximately 110 meters; one-third of the tests failed. The results from KCA’s compacted permeability tests indicated that mixing of the fine-grained siltstone-hosted ore with the more competent, coarse-grained sandstone-hosted ore would be required to maintain suitable permeability of the heap leach over the life of the mine. As fine-grained material is considerably more abundant in the Shahuindo deposit, the Company determined crushing and agglomeration of a blended product would provide for optimal gold recovery. Based on the results of the KCA test work, the design parameters for the Shahuindo heap leach operation were as follows:

58 Tahoe Resources Inc.

Shahuindo Leach Design Parameters
Parameter	Run-of-Mine Ore	Crushed & Agglomerated Ore
Gold Recovery	73%	80%
Silver Recovery	7%	12%
NaCN Consumption	0.2 kg/t	0.3 kg/t
Lime Requirement	2.0 kg/t	1.0 kg/t
Cement Requirement	—	6.0 kg/t
Leach Time	80 days	70 days

Additional column tests initiated by the Company with Knight Piesold in late 2016 were used to determine the optimal blend of fine- to coarse-grained material. Knight Piesold conducted a geotechnical assessment of agglomerated material at various fine- to coarse-grained ratios to establish the permeability of the ore under a range of loads that would be expected to occur in the heap leach facility.

The metallurgical and process simulation testing of the Shahuindo ores have identified no deleterious elements that would have a significant effect on economic extraction. Likewise, no processing factors have been identified, other than the need to manage the fine- to coarse-grained ratios of run-of-mine material to the leach pad, which would have a negative effect on economic extraction. Shahuindo S.A.C. routinely conducts on-going test work to monitor the performance of the leach pads as part of normal plant operations.

MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

The Mineral Resource estimate for Shahuindo, effective January 1, 2018, is summarized below:

SHAHUINDO MINERAL RESOURCES
Material Type	Classification	Tonnes (M)	Gold (g/t)	Silver (g/t)	Gold (koz)	Silver (koz)
Oxide	Measured	89.1	0.47	5.9	1,358	16,807
	Indicated	67.6	0.42	5.1	921	11,122
	Meas + Ind	156.7	0.45	5.5	2,278	27,929
	Inferred	13.4	0.41	4.5	177	1,925
Sulfide	Inferred	97.4	0.74	14.4	2,323	45,055
All Material Types	Measured	89.1	0.47	5.9	1,358	16,807
	Indicated	67.6	0.42	5.1	921	11,122
	Meas + Ind	156.7	0.45	5.5	2,278	27,929
	Inferred	110.8	0.70	13.2	2,500	46,980

Totals may not sum due to rounding.

The Shahuindo Mineral Resources are reported using a gold cut-off grade for oxide material of 0.15 g/t. Oxide resources are reported within a $1,400/oz gold optimized pit shell. The sulfide Mineral Resources at Shahuindo are classified entirely as Inferred due to limited metallurgical characterization and wider drill spacing than in the oxide portion of the deposit. There have been no economic or mining studies of the sulfide portion of the Shahuindo deposit completed to date; the Inferred sulfide Mineral Resource is reported at a 0.5 g/t gold-equivalent cut-off grade using a silver-to-gold ratio of 80.

Lithological, oxidation and structural models were created to model the distribution of mineralization to the pertinent geologic domains. Gold mineralization domains were created using a 0.1 g/t Au cut-off; these domains were used as hard boundaries to constrain the grade estimate. Silver values have been estimated inside the gold domains. Grade estimates were performed using inverse ID³.

The Mineral Resource estimate has been classified as Measured, Indicated and Inferred based on the confidence of the input data, geological interpretation and grade estimation parameters. The Mineral Resource estimate was prepared in accordance with NI 43-101, and classifications adopted by the CIM Council.

The Mineral Reserve estimate for Shahuindo, effective January 1, 2018, is summarized below:

Annual Information Form for the Year Ended December 31, 2017 59

SHAHUINDO MINERAL RESERVES
Material Type	Classification	Tonnes (M)	Gold (g/t)	Silver (g/t)	Gold (koz)	Silver (koz)
Oxide	Proven	77.9	0.48	5.9	1,203	14,756
	Probable	49.9	0.44	5.2	704	8,384
	Prov + Prob	127.8	0.46	5.6	1,907	23,140

Totals may not sum due to rounding.

Oxide Mineral Reserves were reported at a 0.18 g/t gold cut-off grade and have been constrained to the final pit design based on an optimized pit shell using US$1,200/oz gold and actual operating costs incurred. The Mineral Reserves were calculated from Measured and Indicated oxide Mineral Resources only and include 5% dilution and mining losses of 2%. The life-of-mine strip ratio is 1.1 (waste:ore). There are no sulfide Mineral Reserves reported for Shahuindo.

In 2017, exploration drilling focused on identification of mineralized zones peripheral to the current Shahuindo pit with the potential to contribute to an expansion of the Mineral Resources and Mineral Reserves. A total of 17,500 metres (17,465 metres) were drilled during the year testing the San José, San Lorenzo, San Jose and La Chilca near-pit targets. Exploration success at these proximal targets replaced gold ounces produced in 2017 and added approximately 50 thousand additional gold ounces to the 2018 Mineral Reserve.

The Shahuindo Mineral Reserve estimate has been classified as Proven and Probable, applying applicable mining, metallurgical, economic, permitting, and other relevant factors to the Measured and Indicated Mineral Resources. The Mineral Reserve estimate was prepared in accordance with NI 43-101, and classifications adopted by the CIM Council. Mineral Resources are inclusive of Mineral Reserves.

The Shahuindo Mineral Reserve estimate is based on known inputs that include metallurgical performance, taxation/royalty obligations, geologic and geotechnical characterization, operational costs, and other economic parameters. The Company is not currently aware of any known factors that are reasonably likely to have a material negative impact on the Mineral Reserves at Shahuindo.

MINING OPERATIONS

The Shahuindo Mine is an open pit heap leach operation. The mining method used is a conventional drill/blast, shovel and dump truck operation which provides reasonable cost benefits and selectivity for this type of deposit.

The life-of-mine mining schedule at the Shahuindo Mine consists of mining higher grade starter pits providing run-of mine material to the leach pads through early 2018; after which, the Shahuindo Mine plan is designed to deliver ore to the crushing and agglomeration circuit in addition to lesser run-of-mine material delivered directly to the leach pads. The average mining rate in 2017 was approximately 17,800 tonnes of ore per day, with an average of 14,900 tonnes of ore per day placed on the leach pads. Over the course of the next two years, mining is projected to ramp up to a nominal 36,000 tonnes of ore per day.

PROCESSING AND RECOVERY OPERATIONS

Gold from the Shahuindo Mine is extracted from the ore via heap leach and then processed by carbon-in-column ADR operations. The civil and geotechnical design of the leach pads were engineered by Anddes Asociados S.A.C.; the process plant was engineered by Heap Leaching Consulting S.A.C., both of Lima, Peru.

Maintaining heap permeability and minimizing channeling at higher heap heights in the life-of-mine leach pads will require crushing and agglomeration of a significant portion of the ore. The first stage of crushing and agglomeration is designed to operate at a nominal 12,000 tonne per day rate, with ore delivered to the leach pads via grasshoppers and overland conveyors. The 12,000 tonne per day crushing-agglomeration-conveyance circuit is in the final stages of commissioning and has been placed into operation. Commissioning of the expanded crushing and agglomeration circuit to 36,000 tonnes per day is expected to commence in mid-2018. The Company continues to conduct further test work on the agglomeration circuit to optimize the efficiency of the circuit and the maximum leach pad height.

After the ore is placed on the leach pad, a diluted cyanide leach solution is sprayed onto each leach pad cell for a nominal period of 60 days. The pregnant solution flows onto the geomembrane underlying the pad to a central collection point and into the pregnant solution pond. Pontoon mounted pumps in this pond are used to pump the solution to the ADR plant. The plant currently has capacity to treat solution from 15,000 tonnes per day of ore placed on the pad. The process includes absorption onto carbon pellets and desorption in high caustic/high temperature leach columns. The carbon is sent to regeneration and the enriched solution is sent to electro-winning cells where a cathode is used to produce a fine-grained precipitate. The precipitate

60 Tahoe Resources Inc.

is filtered and dried, which also evaporates the mercury which is then captured for later disposal. The dried precipitate is smelted to produce doré bars of approximately 80% gold.

The following table summarizes the heap leach/process plant production since May 1, 2016, the date of commercial production:

SHAHUINDO PRODUCTION 2016-2017
Year	Ore Placed on Pad			Gold Ounces Produced (k)
	Tonnes (M)	Gold (g/t)	Gold Ounces (k)
20161	2.0	0.83	54.0	35.0
2017	5.4	0.61	105.1	79.0

1. May through December 2016

Gold recovery from run-of-mine material has achieved the 73% designed recovery rate. Average lime and cyanide consumption in 2017 was 1.37 kg/t and 0.129 kg/t, respectively.

INFRASTRUCTURE, PERMITTING AND COMPLIANCE

The Shahuindo Mine’s open pit, initial leach pads, waste rock dumps, ADR plant and ancillary facilities have already been constructed and are located within the boundaries of the mining concessions and surface lands owned by the Company. Leach pad construction will continue over the life-of-mine as required. The workforce is derived from the local area and from elsewhere in Peru, with a small expatriate contingency. Shahuindo S.A.C. operates an on-site camp for employees not residing in the local area.

Power at the site is provided by on-site diesel generation capable of sustaining 1.2 MW of power. In 2018, the Company expects that power would be provided via the National Commercial Grid. The long term power requirement for full production at the Shahuindo Mine is estimated to be 7.4MW.

All process and non-potable water for the operation is currently obtained from water wells and stormwater collection ponds. A portion of future process water requirements will be supplied from pit dewatering. Potable water is brought to the mine from outside sources as needed.

The Shahuindo Mine operates under an EIA approved in 2013. The original EIA has been modified to accommodate the planned mine expansion to 36,000 tonnes of ore per day, with approval from the Peruvian MEM currently pending. Other permits received include:

• Certificate for the Inexistence of Archaeological Remains;

• Mine Closure Plan;

• Beneficiation Concession;

• Water usage permit;

• Mining Plan; and

• Operations Permit.

As of the date of this AIF, all permits necessary to operate the Shahuindo Mine were current and in good standing.

Shahuindo S.A.C. works closely with community members and other stakeholders to ensure it meets its commitments and regulatory requirements. This includes involving community members in joint water quality sampling campaigns. Other environmental activities include:

• Installation of channels, sediment control basins and sediment ponds to channel and collect stormwater as well as route freshwater around the operations disturbance area;

• Utilization of water and/or sugarcane molasses on roads for fugitive dust control;

• Surface and groundwater monitoring programs;

• Use of head leach drip emitters to help conserve water resources; and

• Utilization of fruits and vegetables grown on site and within the adjacent communities for use at the onsite workforce cafeteria and local senior citizen care facilities.

The Shahuindo Mine was designed with closure in mind to the greatest extent practicable. The facilities were designed and are operated to minimize the footprints and areas of disturbance; and utilized the most advanced planning and reclamation techniques available. The mine closure plan has been approved by the Peruvian MEM. The Company estimates the undiscounted amount of asset retirement obligations at US$55.0 million for concurrent reclamation activities and post-closure reclamation at Shahuindo. As at December 31, 2017, Tahoe had recorded the present value of reclamation obligations associated with the current level of disturbance.

Annual Information Form for the Year Ended December 31, 2017 61

CAPITAL AND OPERATING COSTS

In 2017, sustaining capital costs expended at the Shahuindo Mine totaled US$22.2 million; project capital, primarily for the crushing-agglomeration-conveyance circuit, totaled US$47.1 million, as summarized below:

SHAHUINDO 2017 CAPITAL EXPENDITURES (US$M)
Sustaining Capital	Mine Development (incl. deferred stripping)	$14.3
	Infrastructure & Facilities	$2.8
	Land Purchases	$5.1
Project Capital	Leach Pad 2B	$10.5
	Crushing, Agglomeration & Conveyance	$33.7
	Power Line & Substation	$1.0
	Process Plant Expansion	$1.9
Total 2017 Capital Expenditures		$69.3

The Company expects to spend US$17.3 million in sustaining capital and US$87.4 million on project capital items in 2018, as summarized below:

SHAHUINDO 2018 CAPITAL EXPENDITURE ESTIMATE (US$M)
Sustaining Capital	Mine Development (incl. deferred stripping)	$6.0
	Infrastructure & Facilities	$1.1
	Processing	$5.4
	Land Purchases	$3.6
	Other Sustaining Capital	$1.2
Project Capital	Leach Pad Construction	$31.1
	ADR Plant Expansion	$23.1
	Crushing & Agglomeration Circuit	$30.0
	Substation & Power Line	$9.7
	Other Project Capital	$3.5
Total 2018 Capital Expenditure Projection		$114.7

Operating costs in 2017 averaged US$7.76 per tonne ore, as summarized below. The Company expects 2018 operating costs to temporarily increase to about US$10.20 per tonne ore as the crushing and agglomeration circuit comes into use; operating costs are expected to reduce to about US$7.00 per tonne ore once the operation reaches the increased production rate of 36,000 tonnes of ore per day.

SHAHUINDO 2017 PRODUCTION COSTS (US$/tonne)
Mine Operations	$3.36
Process Operations	$1.30
Site General & Administration	$3.10
Total Production Costs	$7.76

Economic Analysis

The Shahuindo Mine economic analysis presented in the January 2016 Shahuindo Prefeasibility Study indicated the project has an IRR of 40.6% with a payback period of 4.1 years after taxes and an after-tax NPV using a five percent discount rate of $318.9M. Annual after-tax cash flow from the operation was estimated at US$47.1 million over the ten year mine life.

EXPLORATION, DEVELOPMENT AND PRODUCTION

In 2018, Tahoe’s anticipates producing between 85 and 110 thousand ounces of gold from the Shahuindo Mine.

62 Tahoe Resources Inc.

The initial 12,000 tonne per day crushing and agglomeration circuit is in the final stages of commissioning and production ramp-up. The company expects to complete construction of the additional 24,000 tonne per day circuit in mid-2018, reaching the full production rate of 36,000 tonnes per day by the end of 2018.

During 2017, exploration reconnaissance work comprising prospecting, sampling and trenching was carried out in area north and northwest of the Shahuindo deposit to identify early-stage district targets. Tahoe plans to undertake approximately 30,000 metres of drilling at regional exploration targets in 2018.

THE BELL CREEK COMPLEX

CURRENT TECHNICAL REPORT

The most recent technical report on the Bell Creek Mine, filed in accordance with NI 43-101 is NI 43-101 Technical Report, Updated Mineral Reserve Estimate for Bell Creek Mine, Hoyle Township, Timmins, Ontario, Canada dated March 27, 2015 and available on SEDAR at www.sedar.com and on the Company’s website at www.tahoeresources.com.

PROJECT DESCRIPTION, LOCATION AND ACCESS

The Bell Creek Mine is an underground gold mine and processing facility located in Hoyle Township, Porcupine Mining Division, approximately 20 kilometres by road northeast of Timmins, Ontario. Access to the property is gained via an all-weather asphalt and gravel road north of Ontario Provincial Highway 101. The mine is situated approximately 564 km north-northwest of Toronto, Ontario. The project comprises Bell Creek deposit, mine infrastructure, the Bell Creek Mill, tailing facilities, warehouse, mine dry and other ancillary facilities.

The Bell Creek Mine is 100% owned by the Company through its wholly-owned subsidiary Tahoe Canada, having acquired the previous owner, Lake Shore Gold Corporation (Lake Shore) in April 2016. The Bell Creek property is comprised of 12 leases and five patented Boer War Vet lots covering a total area of approximately 512 hectares. All claims are either patented, leased mineral claims or patented veteran lots which remain valid in perpetuity as long as the annual taxes remain paid in full. To maintain these claims in good standing, yearly lease rents and land tenant taxes are required to be paid for the leased claims, while land taxes and municipal taxes are required for the Boer War Vet lots. Of the 12 leased claims, eight are due for renewal on September 30, 2025 with the remaining four due for renewal on September 30, 2027. All claims are in good standing.

Lake Shore signed a 20-year lease for one of the Boer War Vet lots, encompassing the historic Schumacher mine property, in 2005. The lease is renewable for a second 20-year term. The Company is required to make annual advanced royalty payments of CAD$50,000 (indexed to inflation) and to pay a two percent NSR royalty in the event commercial production is achieved at the property.

In December 2007, Lake Shore acquired the Bell Creek Mine from Goldcorp Inc., subject to a two percent NSR royalty payable to the Porcupine Joint Venture comprised of Goldcorp and Kinross. Kinross subsequently assigned its rights under the agreement to Goldcorp, and in July 2016 Tahoe acquired the royalty from Goldcorp. Underlying royalty agreements affect some of the Bell Creek claims including two agreements with net profit interests that can be purchased outright.

The Company is not currently aware of any material permitting or environmental liabilities to which the property is subject.

HISTORY

Gold was discovered in the Timmins area in the early part of the twentieth century. It was only with increased access to the region following the development of rail infrastructure in the 1900s that world class deposits such as Vipond, Dome, and Hollinger were discovered in the district.

Gold mineralization was first discovered on the Bell Creek property through a joint venture between Rosario and Dupont between 1980 and 1982. Between 1986 and 1991, Canamax Resources Inc. explored and developed the Bell Creek Mine. Falconbridge operated the mine between 1991 and 1992, followed by Kinross in 1993 and 1994 when mining operations ceased. The mine was kept on care and maintenance until 2001, when a decision was made to allow the underground workings to flood.

In 2002, the Porcupine Joint Venture, a joint venture between Placer Dome Canada Ltd. (“Placer”) and Kinross Gold, was formed and in 2005 the property was reactivated. Goldcorp acquired Placer’s interest later that year and became the operator of the Porcupine Joint Venture. Acquisition of the property by Lake Shore was finalized on December 18, 2007.

Annual Information Form for the Year Ended December 31, 2017 63

On January 1, 2012, Lake Shore announced the Bell Creek Mine to be in commercial production. On April 1, 2016, Tahoe acquired the Bell Creek Mine as part of its acquisition of Lake Shore.

GEOLOGICAL SETTING, MINERALIZATION AND DEPOSIT TYPES

The Bell Creek deposit is located in the western part of the Archean aged Southern Abitibi Greenstone Belt, a supracrustal complex of moderately to highly deformed, usually greenschist facies, volcanic-dominated oceanic assemblages that are approximately 2.7 million years in age. Supracrustal rocks in the Timmins region are assigned as members of seven volcanic and two sedimentary assemblages within the Western Abitibi Subprovince of the Superior Province. Intrusions were emplaced during the Archean and Proterozoic eons.

The Bell Creek property is underlain by carbonate altered, greenschist facies Archean-aged, metavolcanics and clastic metasedimentary rock units belonging to the Tisdale and Porcupine assemblages. The metavolcanics portion of the stratigraphy represents the lower portion of the Tisdale Group, with the ultramafic metavolcanics rocks belonging to the Hershey Lake Formation. The stratigraphy generally strikes east-west to west-northwest, and is steeply dipping and highly deformed.

In the Porcupine Camp, gold-bearing structures most commonly form in relatively competent volcanics intruded by felsic porphyry stocks and dykes. Porphyries dating from 2691 ± 3 Ma to 2688 ± 2 Ma intruded the already folded and faulted greenstone sequences and initiated the mesothermal systems with the formation of associated albitites. Observations of pyrrhotite and gold-mineralized clasts at both the nearby Pamour and Dome mines suggest a prolonged gold deposition event from the creation of the deep-seated regional steeply south-dipping Destor Porcupine fault zone up to the latest episode of crustal stabilization.

Fracture intensity and alteration increase toward mineralized zones. Alteration consists of bulk and fracture-controlled sericite, Fe-dolomite to ankerite, quartz, and dark green to black chlorite. Microfractures contain late chlorite and carbonate veinlets. Distal carbonatization, resulting in grey carbonate zones, is quite common.

Gold mineralization in the Bell Creek area occurs along selvages of quartz veins and wall rocks, in stylolitic fractures in quartz veins, in fine grained pyrite, and in association with amorphous carbon. High grade gold mineralization occurs within quartz veins contained in alteration zones. The alteration zones are characterized by carbonate, graphitic and amorphous carbon, fine grained pyrite, sericite, and/or paragonite and are enriched in gold, arsenic, bismuth and tungsten.

EXPLORATION

The type and extent of surface exploration programs completed by owners of the Bell Creek property prior to Lake Shore are unknown to the Company, with the exception of magnetometer surveys conducted to assist in defining stratigraphy ahead of drill targeting. All exploration conducted by Lake Shore and Tahoe has been done by surface and underground drilling.

DRILLING

The principal method of exploration at Bell Creek has been diamond core drilling, generally with NQ-size tools and, to a lesser extent, BQ-size tools, with drill holes collared from the surface and from the underground workings. To date, drilling and identified 16 mineralized zone within the overall Bell Creek deposit area, which extends from the surface to a currently defined depth of 1,700 metres. Mineralization identified by drilling remains open down plunge and to the east at depth. The drill spacing and subsequent geologic interpretation based on drill information is sufficient to support the declaration of Mineral Resources and Mineral Reserves for the Bell Creek deposit.

Surface drilling by Lake Shore also focused on extending resources to depth at the Schumacher and Vogel properties east of the Bell Creek Mine. The program identified mineralization approximately 250 metres below the current Vogel resource and one kilometer east of the Bell Creek deposit. The deep Vogel extension remains open to the east and to depth and will be the focus of additional drilling.

SAMPLING, ANALYSIS AND DATA VERIFICATION

For both surface and underground drill samples a secure chain of custody follows diamond drill core from the drill though analysis with the return of sample pulps to a locked on site storage facility.

For surface drill holes, the drill contractors secure the drill core boxes at the drill site and deliver them to the core logging facilities located at the Company’s exploration office in Timmins, Ontario. The core is logged for geologic, structural, alteration, and mineralization data with intervals to be sampled indicated by the geologist. Sample tags are inserted, and rock quality designation measurements and photographs are taken prior to sampling. The core is split using a diamond saw, with one-half placed in a plastic sample bag and the remaining

64 Tahoe Resources Inc.

half returned to the core box. Once the sampling is completed, all drill core is stored at the Company’s secure compound or at the Company’s Timmins West Mine compound. Samples are directly delivered to independent commercial analytical labs by Company employees.

All samples are analyzed for gold at various independent laboratories using fire assay with an atomic absorption finish, except for samples sent to SGS Labs, which analyzes by inductively coupled plasma- mass spectrometry (“ICP-MS”). For samples that return a value greater than 10 g/t gold, a second aliquot from the same pulp is taken and fire-assayed with a gravimetric finish. Occasionally, for samples that contain visible gold, analysis is completed using a pulp metallic method.

Drill core obtained from underground drill programs is generally subjected to the core handling, logging, and sampling procedures as the core from the surface programs. However, due to the density of drilling and the large amount of core being generated by the underground programs, most holes are whole core sampled rather than split.

The Company’s QA/QC program uses blanks, certified assay standards and pulp duplicates inserted into the sample stream at 40 sample intervals. The laboratory also collects one reject duplicate after every 25 samples processed which is resubmitted as a blind duplicate. QA/QC results are reviewed by Company personnel on a routine basis.

Lake Shore employed an independent third-party consultant to audit the historic drill hole database; a number of discrepancies were identified and resolved. The Company continually validates the drill hole database on an on-going basis and is confident sufficient controls and checks are in place to ensure that the data collection is reliable, assay results reproducible, and the database is of such quality as to support its use in the estimation of Mineral Resources.

MINERAL PROCESSING AND METALLURGICAL TESTING

Prior to 2011, metallurgical testing on Bell Creek mineralization had not been completed by Lake Shore. Reliance had been placed on historical test work conducted prior to the construction of the Bell Creek Mill and on historical milling experience.

Previous test work included mineral characterization, crushing and grinding property tests, flotation tests, cyanidation test and settling/filtration tests.

The Bell Creek Mill Phase 1 expansion was completed in October 2010. Phase 2 of the mill expansion was completed during the third quarter of 2013. Prior to launching the Phase 2 expansion project, more comprehensive test work was completed to verify and optimize design criteria.

Overall, mill performance achieved to date by the Company validates the combination of Lake Shore’s operating history and the extensive amount of previous test work that was conducted prior to the acquisition. The Bell Creek Mill continues to achieve targeted metal recovery and throughput.

MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

The Mineral Resource estimate for the Bell Creek deposit, effective January 1, 2018, is summarized below:

Bell Creek Mineral Resources
Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Measured	1.2	4.43	167
Indicated	4.1	4.27	569
Measured & Indicated	5.3	4.31	736
Inferred	3.0	4.36	415

Totals may not sum due to rounding.

The Bell Creek Mineral Resources are reported as in situ resources using a gold cut-off grade of 2.2 g/t.

Mineral Resources defined in the Bell Creek deposit occur within 16 identified mineralized geologic domains, with approximately 90% of the total Mineral Resource contained within four of the domains. The Mineral Resource model was constructed by interpreting the geologic domains on cross section with domain boundaries refined using a combination of gold grade, alteration, sulfide content and quartz content. Where available, data acquired from underground geologic mapping was used to aid in the interpretation. Three-dimensional wire-frames were constructed for each domain to constrain the grade estimate within the block model. Gold grades were estimated into the model using inverse distance squared (ID²).

Annual Information Form for the Year Ended December 31, 2017 65

The Mineral Resource estimate has been classified as Measured, Indicated and Inferred based on the confidence of the input data, geological interpretation and grade estimation parameters. The Mineral Resource estimate was prepared in accordance with NI 43-101, and classifications adopted by the CIM Council.

Mineral Resources for the Bell Creek deposit as of January 1, 2018 were reported by subtracting mining depletion through the end of 2017 from an updated resource model completed in May 2017.

The Mineral Reserve estimate for the Bell Creek deposit, effective January 1, 2018, is summarized below:

Bell Creek Mineral Reserves
Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Proven	0.5	3.90	68
Probable	1.9	4.12	246
Proven & Probable	2.4	4.07	315

     Totals may not sum due to rounding.

Mineral Reserves were calculated by applying the life-of-mine plan as of January 1, 2018 to the Measured and Indicated Mineral Resources using a long-term gold price of $1,275/oz and reported at a gold cut-off grade of 2.3 g/t. Mineral Reserves are supported by a mine plan that features variable stope thicknesses designed on the Mineral Resource model using operating costs of US$87.42 per tonne ore with 95% mining recovery, external dilution of 16% and metallurgical recovery of 94.5%. Mineral Resources are inclusive of Mineral Reserves.

The calculation of Mineral Resources and Mineral Reserves has taken into account environmental, permitting, legal, title, taxation, socio-economic, marketing and political factors and constraints, none of which are considered to be reasonably likely to materially affect the operation of the Bell Creek Mine. The Mineral Resource and Mineral Reserve estimates have the potential to be impacted by assumptions used for commodity prices, operating and capital costs, rock mechanics (geotechnical) constraints, constant underground access to all working areas, and metal recovery.

MINING OPERATIONS

The primary access at the Bell Creek Mine is via a portal and main ramp from surface. Personnel, materials, and ore and waste rock are transferred to/from the surface via a main ramp that is 5 metres wide x 5 metres high. All active production levels in the mine are accessed from the ramp system. Secondary access/egress is through a manway in a historic shaft that extends approximately 300 metres from the surface.

Narrow vein longitudinal longhole stoping with unconsolidated rock fill is the primary mining method used at the Bell Creek Mine. Sublevels are established at 15 to 20 metre vertical intervals. On each sublevel, the resource is typically accessed near the center of the deposit (along strike) with stope undercut and overcut sills developed along the eastern and western extents of the ore. Stope lengths are generally 20 metres along strike. Longitudinal mining retreats from the furthest stope from the access, toward the initial access point.

The Company believes that the mining method used at the Bell Creek Mine provides reasonable cost benefits and selectivity for this type of deposit. In 2017, the average mining rate at the Bell Creek Mine was approximately 960 tonnes of ore per day.

In 2017, the Company initiated rehabilitation of the existing shaft and began extending the shaft from the 300 metre depth to the 1080 metre level elevation. The shaft will be equipped to hoist both ore and waste and is expected to double the existing production capacity of the mine, extend the mine life and allow for accelerated delineation of the deep resources as well as exploration at depth. The shaft expansion project, which is expected to double production to 80,000 ounces of gold per year in 2020, is expected to be completed mid-2018, with commissioning of the facility in the second half of 2018. Mechanical installation of the hoist began in early February 2018; headframe civil engineering work is progressing with a projected start of steel installation by the end of Q1 2018.

PROCESSING AND RECOVERY OPERATIONS

Ore from the Bell Creek Mine is milled at the Bell Creek Mill. The processing plant consists of a one-stage crushing circuit, ore storage dome, one-stage grinding circuit with gravity recovery, followed by pre-oxidation and cyanidation of the slurry with carbon-in-leach (CIL) and carbon-in-pulp (CIP) recovery. Recovery of the gold

66 Tahoe Resources Inc.

from the carbon is a batch process where the carbon is stripped, cleaned with acid, reactivated in a kiln and reused in the circuit.

The loaded solution from the strip circuit is passed through two electro-winning cells in the refinery where the gold collects on the cathodes in a sludge form. The cells are washed weekly and the sludge is collected in filter bags and dried. The dried sludge is then mixed with reagents and melted in an induction furnace with gold bullion bars poured when the melt is completed.

The gravity gold material collected from the Knelson concentrator is transferred to the refinery and a gravity table is used to increase the gold content. The concentrate is then dried, reagents are added and the material is melted in the induction furnace. The gravity concentrate and the CIP gold sludge are melted separately due to the differing amounts of reagents used in each, and to more accurately determine recoveries in each circuit.

Ore from the Company’s Timmins West Mine is also trucked to the Bell Creek Milling facility for processing. Throughput at the Bell Creek process plant averaged just above 3,700 tonnes per day in 2017.

Processing results of Bell Creek Mine ore at the Bell Creek Mill since the Company’s acquisition of Lake Shore on April 1, 2016 are shown in the following table:

BELL CREEK MILL PRODUCTION 2016-2017
Year	Tonnes Milled (M)	Gold Head Grade (g/t)	Gold Ounces Produced (k)	Recovery (%)
20161	0.94	4.19	121.6	96
2017	1.36	3.97	167.0	96

¹ April through December 2016

The Bell Creek Mill continues to meet or exceed the Company’s expectations regarding throughput and metal recovery. The Bell Creek Mill is permitted to 5,500 tonnes per day.

INFRASTRUCTURE, PERMITTING AND COMPLIANCE ACTIVITIES

The Bell Creek Mine infrastructure, Bell Creek Mill, tailing facilities, warehouse, mine dry and other ancillary facilities are all located on lands owned or controlled by the Company. As the Bell Creek Mine is located within the well-established Timmins mining district, consumable materials and external services required to support the mining operation are readily sourced from local vendors or from other nearby mining centers.

The Bell Creek tailings facility is located to the west of the Bell Creek Mill. The tailings facility covers an area of approximately 250 hectares that includes five tailings cells, two clear water ponds, an effluent treatment plant and sludge settling pond. Tailings are pumped in a conventional slurry stream (40% to 45% solids) from the mill to the tailings facility for deposition. The Company has completed a depositional plan that accommodates tailings deposition within the existing tailings facility footprint for the next three years prior to the need for additional expansion.

All‐weather road access and electrical power transmission lines to the Bell Creek Mine are established and operational.

Provincially, the Ministry of Northern Development and Mines (“MNDM”) is the lead agency for mining projects in Ontario. The notification of intent to commence mine production triggers requirements under Part VII of the Mining Act. These requirements include public and agency notifications, public and First Nations consultations, closure plans and financial assurance. Approval of a closure plan provides rights for the Company to proceed under the Mining Act.

The Ministry of the Environment and Climate Change (“MOECC”) issues permits to take water (both surface and groundwater), emit noise and dust, and discharge into water, land and the atmosphere. The MOECC administers the following permits for the Bell Creek Complex:

• Wastewater treatment and effluent discharge from the mine process water, including construct and operate tailings impoundment - Ontario Water Resources Act (“OWRA”);

• Water taking permits - OWRA;

• Industrial Sewage Works Permit - OWRA;

• Solid waste management (waste generator registration) - Ontario Environmental Protection Act (EPA); and

• Noise/air emissions - EPA.

Currently, the Bell Creek Complex operates under the following permits issued by the MOECC:

Annual Information Form for the Year Ended December 31, 2017 67

• Permit to Take Water;

• Amended Environmental Compliance Approval (Industrial Sewage);

• Amended Environmental Compliance Approval (Air); and

• Waste Generator permit.

The Ministry of Natural Resources and Forestry (“MNRF”) issues land use permits and work permits under the Public Lands Act and the Lakes and Rivers Improvement Act, respectively. The MNRF administers the following permits for the Bell Creek Complex:

• Forest Resource Licenses which are issued for the cutting of crown owned timber (Crown Forest Sustainability Act);

• Land use permits for effluent ditches/pipelines, access roads, camps, etc., where the acquisition of crown lands is required - Public Lands Act; and

• Work permits for creek crossings or impoundment structures (dams) - Lakes and Rivers Improvement Act.

To the Company’s knowledge, all material permits required to conduct operations at Bell Creek have been obtained and are currently in good standing.

Consultations have been undertaken with regulatory agencies, the general public, the Métis Nation of Ontario, Wabun Tribal Council and the First Nation communities of Flying Post First Nation, Mattagami First Nation, and Matachewan First Nation, who are represented by Wabun Tribal Council, and also Wahgoshig First Nation. Consultation provides an opportunity to identify and address the impacts of the Company’s activities on external stakeholders and to expedite the authorization process.

As a result of the consultations undertaken, in November 2016, the Company signed an Impact and Benefits Agreement (“IBA”) relating to the Bell Creek Mine and surrounding properties with the Mattagami, Wahgoshig, Matachewan and Flying Post First Nation communities in the Timmins area. The IBA established a framework for continued consultation relating to the Company’s existing and future operations in and around Timmins, and provides long-term financial benefits to the four First Nations communities as well as opportunities in such areas as new business ventures, employment, training and education.

Water management and protection of the natural environment surrounding the Bell Creek Complex were recognized from the onset of the project as primary environmental concerns. Construction and other works conducted at Bell Creek passes through extensive screening by both Bell Creek environmental staff and a third party consultant in order to minimize environmental impacts.

The extensive sampling program initiated by the Company did not identify any material acid rock drainage issues.

At the conclusion of the mine life, the closeout rehabilitation measures to be implemented include:

• Removal of surface buildings and associated infrastructure;

• Removal of holding ponds by converting into naturally draining ponds;

• Sloping and covering of all waste rock and tailings with native grasses;

• Securing mine opening as per Ontario regulations; and

• Ensuring water quality as per monitoring program submitted in Closure Plan.

The Company estimates the undiscounted amount of asset retirement obligations at US$13.0 million for concurrent reclamation activities and post-closure reclamation of the Bell Creek Mine. As at December 31, 2017, Tahoe had recorded the present value of this closure and reclamation obligation.

CAPITAL AND OPERATING COSTS

In 2017, sustaining capital costs expended at the Bell Creek Complex totaled US$17.4 million; with project capital, consisting primarily of costs related to the Bell Creek shaft expansion project, totaled US$51.9 million, as summarized below:

68 Tahoe Resources Inc.

BELL CREEK 2017 CAPITAL EXPENDITURES (US$M)
Sustaining Capital	Mine Development	$9.8
	In-Mine Definition/Infill Drilling	$2.2
	Mobile Equipment	$2.7
	Other Sustaining Capital	$2.6
Project Capital	Shaft Project	$41.3
	Mine Development & Infrastructure	$4.9
	Tailings Facility	$4.5
	Other Project Capital	$1.2
Total 2017 Capital Expenditures		$69.3

The Company expects to spend US$21.2 million in sustaining capital and US$39.1 million on project capital in 2018, as summarized below:

BELL CREEK 2018 CAPITAL EXPENDITURE ESTIMATE (US$M)
Sustaining Capital	Mine Development	$12.4
	In-Mine Definition/Infill Drilling	$2.6
	Mobile Equipment	$4.8
	Other Sustaining Capital	$1.4
Project Capital	Shaft Project	$23.4
	Tailings Facility	$9.7
	Mobile Equipment	$2.1
	In-Mine Definition/Infill Drilling	$3.9
Total 2018 Capital Expenditure Projection		$60.3

Operating costs in 2017 averaged US$90.74 per tonne ore, as summarized below. The Company expects 2018 operating costs to generally be in line with the 2017 operating costs.

BELL CREEK 2017 PRODUCTION COSTS (US$/tonne)
Mine Operations	$71.83
Process Operations	$15.61
Site General & Administration	$3.30
Total Production Costs	$90.74

With the completion of the shaft expansion project, operating costs in 2019 are expected to decrease by about US$10.00 per tonne.

EXPLORATION, DEVELOPMENT AND PRODUCTION

In 2018, Tahoe anticipates producing between 55 and 65 thousand ounces of gold from the Bell Creek Mine. Tahoe plans to undertake approximately 2,630 metres of capitalized underground development and 15,400 metres of in-mine exploration/resource expansion drilling. The Company is targeting mid-2018 to begin commissioning of the Bell Creek shaft, which it expects to have the hoisting capacity to double the current mine production by the end of 2018.

Exploration at Bell Creek in 2017 continued to test lateral extensions of the east-west trending NA and NA2 zones and HW6 zone to depth. Recent drilling has marginally extended these zones in all directions. Elsewhere in the district, surface drilling focused on the Wetmore property, 900 meters south of the Bell Creek Mine where two zones of shallow mineralization have been delineated with the potential to incrementally add to Bell Creek district resources. Drilling was also carried out at the Vogel and Stringer zones, located immediately east and north, respectively of the Bell Creek Mine. Drill results warrant additional exploration in both areas. The Company plan to undertake approximately 10,000 metres of exploration drilling at regional exploration targets in 2018.

Annual Information Form for the Year Ended December 31, 2017 69

THE TIMMINS WEST MINE

CURRENT TECHNICAL REPORT

The most recent technical report on the Timmins West Mine, filed in accordance with NI 43-101 is National Instrument 43-101 Technical Report, Timmins West Mine, Timmins, Ontario, Canada dated September 20, 2017 and available on SEDAR at www.sedar.com and on the Company’s website at www.tahoeresources.com.

PROJECT DESCRIPTION, LOCATION AND ACCESS

The Timmins West Mine is an underground gold mine located approximately 19 kilometres west of the city of Timmins, Ontario. All season road access to the property is provided by provincial Highways 101 and 144. The provincial highways and a short access road provide year-round access to the mine.

The Timmins West Mine property encompasses a total area of approximately 17.1 square kilometers, or approximately 1,712 hectares. The majority of the property is situated within Bristol Township (1,340 hectares), with approximately 336 hectares located in Thorneloe Township and 36 hectares in Carscallen Township. Through its wholly-owned subsidiary, Tahoe Canada, the Company owns a 100% interest in most of the property, subject to underlying royalties. The exception to this is a 50% interest in ten unpatented mining claims. As of the date of this AIF, all claims and leases were in good standing.

The Timmins West Mine includes Mineral Resources and Mineral Reserves for three deposits: the Timmins deposit, the Thunder Creek deposit and the 144 Gap deposit (also known as the “HWY-144” deposit):

The Timmins deposit portion of the property consists of a block of 23 contiguous claims, totaling approximately 395 hectares, of which there are eleven patented and surface right claims, six claims with patent surface rights and leased mining rights, and six claims that hold a 21-year Crown mining and surface rights lease;

The Thunder Creek deposit portion of the property consists of 20 staked mineral claims, totaling approximately 629 hectares, of which two claims hold a surface rights patent and three claims hold a 21-year Crown mining and surface rights lease; and

The 144 Gap deposit portion of the property consists of a contiguous block of 33 claims that hold a 21-year Crown mining and surface rights lease, covering approximately 688 hectares. This lease is part of a larger lease covering 56 claims (1,083 hectares) which was obtained by the Company in 2016.

Surrounding the Timmins West Mine property proper are an additional 276 staked claims, six leases and 33 patents owned by the Company. In all, there are 89 claims and leases with NSR royalty obligations ranging from 1.5% to three percent, many with a buy-back option at the Company’s discretion.

The Company is not currently aware of any material factors or risks that are reasonably likely to adversely affect access or title, or the right or ability to perform work on the property, including permitting and environmental liabilities to which the property is subject.

HISTORY

Gold was initial discovered in Bristol Township in 1911 on the McAuley-Brydge property above what is currently the Timmins West Mine. During the period from 1911 to 1914 two shallow shafts were sunk; one of which was on the present main mineralized zone, and a second east of the main mineralized zone. Shortly after, fire storms swept through large parts of Carscallen, Bristol and Ogden Townships, and the surface plants at the various mines were completely destroyed. It was not until the late 1930s that any further significant drilling occurred, first by Orpit Mines Limited, which completed diamond drilling between 1938 and 1944, and also by Rusk Porcupine Mines, which excavated several pits and trenches across the Thunder Creek portion of the property. Holmer Gold Mines Limited (“Holmer”) acquired the first of its interest in what is now the Timmins West Mine property in 1963.

Lake Shore acquired the Timmins West Mine property by fulfilling the earn-in requirements as set out in option agreements entered into in 2003 with Holmer and West Timmins Mining Inc., formerly Band-Ore Resources Limited, and Sydney Resources Ltd., respectively, and by completing business combination agreements with those companies. Holmer became a wholly-owned subsidiary of Lake Shore in December 2004, and West Timmins Mining became a wholly-owned subsidiary of Lake Shore in November 2009.

In January of 2011, commercial production was declared for the Timmins Deposit. In January of 2012, commercial production was declared for the Thunder Creek Deposit. Subsequently, the Timmins and Thunder Creek Deposits were combined into a single operation called the Timmins West Mine. In March of 2012, Lake

70 Tahoe Resources Inc.

Shore filed an updated Mineral Resource Estimate for the Timmins Deposit, including a PEA for the Timmins West Mine. In May of 2012, Lake Shore released a pre-feasibility study and Mineral Reserves for the Timmins West Mine.

The 144 Gap Deposit was initially discovered in late 2014 as part of a successful surface diamond drilling campaign. In 2015, Lake Shore reported significant expansion of the 144 Gap Deposit through continued surface diamond drilling.

On April 1, 2016, Tahoe acquired the Timmins West Mine as part of its acquisition of Lake Shore.

GEOLOGICAL SETTING, MINERALIZATION AND DEPOSIT TYPE

The Timmins region comprises supracrustal rocks within the Western Abitibi Subprovince, of the Superior Province. Lithologic units in the region consist of seven volcanic and two sedimentary assemblages of Archean age that were subsequently intruded by porphyry rocks during the Archean and Proterozoic times.

The Timmins West Complex is dominated by mafic volcanic and sedimentary rocks of the Tisdale, Deloro and Porcupine Groups that occur within a broad basin which opens to the east. Rocks within the basin generally strike east-west with moderate north dips. These rocks are cut by a series of ultramafic to felsic intrusions. Key structural features of the property include the Destor Porcupine Fault Zone which passes through the south portion of the interpreted basin and the Company’s 144 and Gold River deposit trends which occur on the north and south basin limbs. These two trends represent intense zones of alteration and deformation that control all of the main gold occurrences identified on the property.

The Timmins Deposit, Thunder Creek Deposit and 144 Gap Deposit all occur along the 144 Trend, a broad and extensive structural corridor that extends to the southwest from the Timmins Deposit. This trend generally coincides with the northeast trending contact zone between southeast facing mafic metavolcanic rocks of the Tisdale Assemblage (to the northwest) and dominantly metasedimentary rocks that unconformably overlie Porcupine Assemblage (to the southeast).

Gold mineralization occurs in steep north-northwest plunging mineralized zones which coincide with parallel lineations related to folds and elongate lithologic units. Mineralization occurs within, or along favourable lithostructural settings in proximity (within hundreds of metres) to the 144 Trend and related structures. Mineralization comprises multiple generations of quartz-carbonate-tourmaline ± albite veins, associated pyrite alteration envelopes, and disseminated pyrite mineralization. Textural evidence suggests that veining formed progressively through two deformation events and is related to alkalic Intrusive complexes and syenitic to monzonitic intrusions.

EXPLORATION

Prior to 2003, all exploration on the Timmins West Mine area was carried-out by previous operators. Since 2003, exploration on the Timmins, Thunder Creek, and 144 Gap deposits by Lake Shore and the Company has consisted primarily of diamond drilling. Other exploration activities from 2003 to present consisted of basic geological and structural mapping, prospecting, outcrop stripping, litho-geochemical sampling, and mobile metal ion soil geochemical surveys.

Geophysical surveys including airborne magnetics as well as surface and downhole induced polarization surveys were also completed as part of various research projects by consultants or through university academic studies. These campaigns have helped form the current level of geological understanding necessary to generate useful drill targets for advanced exploration of the Timmins West Mine area.

DRILLING

Historical records show that exploration drilling in the Timmins West Mine area initially began in 1938; drilling at the property has continued through to the present. Much of the information regarding the historic drilling is either incomplete or not possible to verify; thus, the Company does not consider any of the drill data collected prior to 1984 and 1996 in its estimates of Mineral Resources for the Timmins and Thunder Creek deposits, respectively. All drilling at the 144 Gap deposit has been done by Lake Shore and Tahoe.

Tahoe and its predecessor, Lake Shore, have conducted near-continuous surface exploration, underground exploration and underground infill/definition drilling programs on a near-continuous basis since 2003. Drilling is done using diamond drill core methods. Surface holes are drilled using NQ-size tools and, to a lesser extent, BQ-size tools. Underground drilling is generally done with BQ-size tools, with lesser use of NQ-, HQ- and AQTK-size tools.

When Lake Shore optioned the property from Timmins deposit property in 2003, surface drilling focused on down-plunge and strike extensions of the known mineralization. As underground access became available,

Annual Information Form for the Year Ended December 31, 2017 71

underground drilling was used to delineate and define the ore body. Drilling from underground platforms continues to be used for near-mine exploration and stope definition. Drilling from surface is used to test for the deep continuation of the mineralized stratigraphy. A deep hole drilled in February 2017 successfully intersected the down-plunge projection of the ultramafic-style mineralization approximately 400 metres below the current Mineral Resource limit.

Surface drilling on the Thunder Creek deposit initially focused on testing historic showings and structures identified from geophysics, which led to the discovery of the ‘Rusk’ and ‘Porphyry’ mineralized zones which would become the primary targets of subsequent drilling. The Rusk and Porphyry zones contain the majority Thunder Creek deposit mineralization currently in production. Surface drilling by Lake Shore on the Thunder Creek deposit began in 2003 and continued through 2012; at which time underground drilling was used to define the resource. Underground drilling has been near-continuous since that time, focused on infill and stope definition and targeting the down-dip extensions of the Rusk and Porphyry zones as well as exploring for new mineralized structures at depth.

In 2010, Lake Shore began surface exploration drilling to test the southwest projection of the Thunder Creek Rusk zone, which was interpreted from regional geologic interpretation and geophysical signatures. The drilling successfully identified mineralization that would become the 144 Gap deposit, which is currently in production. Exploration, infill and stope drilling at the 144 Gap deposit continues through the present from underground drill platforms.

The drill spacing and geologic interpretation based on drill information is sufficient to support the declaration of Mineral Resources and Mineral Reserves for the Timmins, Thunder Creek and 144 Gap deposits.

SAMPLING, ANALYSIS AND DATA VERIFICATION

For both surface and underground drill samples a secure chain of custody follows diamond drill core from the drill though analysis with the return of sample pulps to a locked on site storage facility.

For surface drill holes, the drill contractors secure the drill core boxes at the drill site and deliver them to the core logging facilities located at the Company’s exploration office in Timmins, Ontario. The core is logged for geologic, structural, alteration, and mineralization data with intervals to be sampled indicated by the geologist. Sample tags are inserted, and rock quality designation measurements and photographs are taken prior to sampling. The core is split using a diamond saw, with one-half placed in a plastic sample bag and the remaining half returned to the core box. Once the sampling is completed, all drill core is stored at the Company’s secure compound or at the Company’s Timmins West Mine compound. Samples are directly delivered to independent commercial analytical labs by Company employees.

All samples are analyzed for gold at various independent laboratories using fire assay with an atomic absorption finish, except for samples sent to SGS Labs, which analyzes by ICP-MS finish. For samples that return a value greater than 10 g/t gold, a second aliquot from the same pulp is taken and fire-assayed with a gravimetric finish. Occasionally, for samples that contain visible gold, analysis is completed using a pulp metallic method.

Drill core obtained from underground drill programs is generally subjected to the core handling, logging, and sampling procedures as the core from the surface programs. However, due to the density of drilling and the large amount of core being generated by the underground programs, most holes are whole core sampled rather than split.

The Company’s QA/QC program uses blanks, certified assay standards and pulp duplicates inserted into the sample stream at 40 sample intervals. The laboratory also collects one reject duplicate after every 25 samples processed which is resubmitted as a blind duplicate. QA/QC results are reviewed by Company personnel on a routine basis.

Lake Shore employed an independent third-party consultant to audit the historic drill hole database; a number of discrepancies were identified and resolved. The Company continually validates the drill hole database on an on-going basis and is confident sufficient controls and checks are in place to ensure that the data collection is reliable, assay results reproducible, and the database is of such quality as to support its use in the estimation of Mineral Resources.

MINERAL PROCESSING AND METALLURGICAL TESTING

Metallurgical test work on the Timmins and Thunder Creek deposit ores has been conducted by SGS Lakefield Research Ltd, EHA Engineering Ltd., PRC Engineering, Inc., Pocock Industrial, Inc., and Golder Associates. The metallurgical programs included:

• bottle roll tests to determine metallurgical response of the various ore types to cyanidation;

• gravity concentration tests;

72 Tahoe Resources Inc.

• pulp agglomeration tests;

• flotation tests;

• crushing, grinding and abrasion indices determinations;

• flocculent screening, gravity sedimentation and pulp rheology on leached tailings samples; and

• SAG mill testing.

Test work results demonstrated that the Timmins West Mine ores are amenable to the existing Bell Creek gold milling process; specifically, the ores were free-milling with excellent (+95%) gold recovery by cyanide leaching and CIP recovery.

Upon discovery of the 144 Gap deposit, additional test work confirmed the compatibility of the 144 Gap ores with the existing Bell Creek Mill process.

In-house metallurgical tests continue on a regular basis to monitor and optimize mill performance. The Company’s operating experience, supported by extensive test work, provides a high level of confidence to the Company that the Bell Creek Mill process design can continue to achieve the targeted recovery and throughput levels.

MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES

The Mineral Resource estimate for the Timmins West Mine, effective January 1, 2018, is summarized below:

Timmins West Mine Mineral Resources
Deposit	Classification	Tonnes (k)	Gold (g/t)	Gold (koz)
Timmins	Measured	—	—	—
	Indicated	1,256	4.46	180
	Measured & Indicated	1,256	4.46	180
	Inferred	357	4.32	50
Thunder Creek	Measured	—	—	—
	Indicated	1,107	3.39	121
	Measured & Indicated	1,107	3.39	121
	Inferred	39	2.61	3
144 Gap	Measured	247	4.86	39
	Indicated	4,751	3.82	584
	Measured & Indicated	4,998	3.88	623
	Inferred	695	3.60	81
Total Timmins West Mine	Measured	247	4.86	39
	Indicated	7,114	3.87	885
	Measured & Indicated	7,361	3.90	923
	Inferred	1,091	3.80	133

Totals may not sum due to rounding.

The Timmins West Mine Mineral Resources are reported as in situ resources using a gold cut-off grade of 1.5 g/t.

Mineral Resources defined for the Timmins West Mine occur within 71, 21 and 13 discreet mineralized zones in the Timmins, Thunder Creek and 144 Gap deposits, respectively. The Mineral Resource model was constructed by interpreting the geologic/mineralogic domains on cross section with domain boundaries refined using a combination of gold grade, alteration, sulfide content and quartz content. Where available, data acquired from underground geologic mapping was used to aid in the interpretation. Three-dimensional wire-frames were constructed for each domain to constrain the grade estimate within the block model. Gold grades were estimated into the model using ID².

The Mineral Resource estimate has been classified as Measured, Indicated and Inferred based on the confidence of the input data, geological interpretation and grade estimation parameters. The Mineral Resource estimate was prepared in accordance with NI 43-101, and classifications adopted by the CIM Council.

Mineral Resources for the Timmins West Mine as of January 1, 2018 were reported by subtracting mining depletion through the end of 2017 from an updated resource model completed on May 15, 2017.

Annual Information Form for the Year Ended December 31, 2017 73

The Mineral Reserve estimate for the Timmins West Mine, effective January 1, 2018, is summarized below:

Timmins West Mine Mineral Reserves
Deposit	Classification	Tonnes (k)	Gold (g/t)	Gold (koz)
Timmins	Proven	—	—	—
	Probable	984	3.59	114
	Proven + Probable	984	3.59	114
Thunder Creek	Proven	—	—	—
	Probable	466	2.89	43
	Proven + Probable	466	2.89	43
144 Gap	Proven	407	3.61	47
	Probable	4,605	3.03	449
	Proven + Probable	5,012	3.08	496
Total Timmins West Mine	Proven	407	3.61	47
	Probable	6,055	3.11	606
	Proven + Probable	6,462	3.15	654

Mineral Reserves were calculated by applying the life-of-mine plan at January 1, 2018 to the Measured and Indicated Mineral Resources using a gold price of US$1,275/oz and a gold cut-off grade of 2.0 g/t. Mineral Reserves are supported by a mine plan that features variable stope thicknesses designed on the updated Mineral Resource model using operating costs of US$78.64 per tonne ore with 95% mining recovery, external dilution of 15% and metallurgical recovery of 97%. Mineral Resources are inclusive of Mineral Reserves.

The calculation of Mineral Resources and Mineral Reserves has taken into account environmental, permitting, legal, title, taxation, socio-economic, marketing and political factors and constraints, none of which are considered to have the potential to affect materially the operation of the Bell Creek Mine. The Mineral Resource and Mineral Reserve estimates have the potential to be impacted by assumptions used for commodity prices, operating and capital costs, rock mechanics (geotechnical) constraints, constant underground access to all working areas, and metal recovery.

MINING OPERATIONS

The Thunder Creek, Timmins, and 144 Gap deposits at the Timmins West Mine are accessed by a 5.5 metre diameter production shaft and 5 metre by 5 metre ramp from surface; the three deposits are connected by internal ramps and drifts.

Production from the Timmins, Thunder Creek and 144 Gap deposits comes from a combination of ore development and transverse and longitudinal longhole stoping. Sublevel spacing at the Timmins deposit is at 20 metre vertical intervals; sublevel spacing at the Thunder Creek and 144 Gap deposits is on 35 metre vertical intervals. Stopes are backfilled with either paste fill or cemented rock fill.

The mining methods used at the Timmins West Mine provide reasonable cost benefits and selectivity for these types of deposit. In 2017, the average mining rate at the Timmins West Mine was approximately 2,800 tonnes of ore per day.

PROCESSING AND RECOVERY OPERATIONS

All ore produced from the Timmins West Mine is hauled via surface highway trucks to the Company’s Bell Creek Mill for processing. Please refer the Processing and Recovery Operations section in the preceding Bell Creek Mine discussion.

INFRASTRUCTURE, PERMITTING AND COMPLIANCE ACTIVITIES

The Timmins West Mine infrastructure and surface facilities to support operations are all located on lands owned or controlled by the Company. As the Timmins West Mine is located within the well-established Timmins mining district, consumable materials and external services required to support the mining operation are readily sourced from local vendors or from other nearby mining centers.

All‐weather road access and electrical power transmission lines to the Timmins West Mine are established and operational.

74 Tahoe Resources Inc.

The required permits and approvals for operations at the Timmins West Mine have been acquired and include the Provincial Permits from MNDM; MOE, MNR, Ministry of Transportation (“MTO”), Technical Standards and Safety Authority (“TSSA”), and the Ministry of Labour (“MOL”); Occupational Health and Safety; Explosives; and Notification of Commencement of Construction and Operation.

The required permits and approvals for operations at the Timmins West Mine also include Federal Permits from Department of Fisheries and Oceans Canada (“DFO”); Natural Resources Canada (“NR CAN”) - Explosives Regulatory Division (“ERD”) and Environment Canada (“EC”).

To the Company’s knowledge, all material permits required to conduct operations at the Timmins West Mine have been obtained and as of the date of this AIF are currently in good standing.

The Company and two First Nations, namely Mattagami and Flying Post First Nations, entered into an IBA in February, 2011, which outlines how the Company and the First Nations communities will work together in the following areas: education and training of First Nation community members, employment, business and contracting opportunities, financial considerations and environmental provisions.

Water management and protection of the cold water systems on and adjacent to the Timmins West Mine site were recognized from the onset of the project as primary environmental concerns. Current operations at the Timmins West Mine include managing rock that has the potential to generate acid within a containment facility and treating runoff in accordance with regulatory requirements before release to the environment.

Mine water from the underground workings are directed to ponds and treated through the effluent treatment plant prior to discharge. The treatment process is designed to ensure that all Environmental Compliance Approval criteria are met prior to discharging into the natural environment.

To protect the nearby Thunder Creek, and maintain flows within the system, un-impacted stormwater is diverted away from Thunder Creek. Storm water is captured and treated prior to discharge to the natural environment.

The development of the mine will create a disturbance footprint on the terrestrial environment. Baseline work did not identify the possibility of provincially or federally listed fauna species on the site that will trigger concern. The closure plan is designed to reduce this disturbance area at closure and disturbed areas will be rehabilitated with the intent of returning the site to a productive use (i.e. forestry) resulting in limited long-term impact to the area.

The commercial production closure plan for the Timmins West Mine was filed in 2010; an amended was submitted in late 2016 (site compliance per Ontario Regulation 240/00) with approval expected in early 2018. At closure, the site will be rehabilitated in accordance with closure plans filed with the MNDM, including:

• Removal of surface buildings and associated infrastructure;

• Dewatering the ponds by pumping treated effluent to the approved discharge location;

• Breaching of existing ponds to all natural flows and remediate site drainages to their background watersheds;

• Allowing the underground workings to naturally submerge with local groundwater;

• Securing of mine openings in accordance with regulatory requirements; and

• Contouring, covering, and re-vegetating waste rock facilities and disturbed areas using available overburden.

Infrastructure will be removed from the site and any other disturbed areas associated with the project will be re-vegetated, mainly through natural regeneration using seed banks in the overburden stored on site.

CAPITAL AND OPERATING COSTS

In 2017, sustaining capital costs expended at Timmins West totaled $29.5 million, as summarized below. There were no project capital expenditures in 2017.

TIMMINS WEST 2017 CAPITAL EXPENDITURES (US$M)
Sustaining Capital	Mine Development	$15.1
	In-Mine Definition/Infill Drilling	$4.6
	Mobile Equipment	$5.6
	Other Sustaining Capital	$4.2
Total 2017 Capital Expenditures		$29.5

The Company expects to spend US$32.4 million in sustaining capital and US$6.4 million on project capital in 2018, as summarized below:

Annual Information Form for the Year Ended December 31, 2017 75

TIMMINS WEST 2018 CAPITAL EXPENDITURE ESTIMATE (US$M)
Sustaining Capital	Mine Development	$19.9
	In-Mine Definition/Infill Drilling	$3.8
	Mobile Equipment	$6.3
	Other Sustaining Capital	$2.4
Project Capital	Mine Development	$2.4
	Mine Infrastructure	$2.9
	Underground Construction Projects	$1.1
Total 2018 Capital Expenditure Projection		$38.8

Operating costs in 2017 averaged US$75.98 per tonne ore, as summarized below:

TIMMINS WEST 2017 PRODUCTION COSTS (US$/tonne)
Mine Operations	$57.75
Process Operations	$15.60
Site General & Administration	$2.63
Total Production Costs	$75.98

As a greater percentage of production comes from the 144 Gap deposit, which has considerable longer haul distances than production from the Timmins or Thunder Creek deposits, operating costs are expected to increase by approximately US$2.00 per tonne in 2018.

EXPLORATION, DEVELOPMENT AND PRODUCTION

In 2018, Tahoe anticipates producing between 115 and 125 thousand ounces of gold from the Timmins West Mine. Tahoe plans to undertake approximately 5,600 metres of underground development and 7,500 metres of resource expansion drilling and 13,000 metres of district exploration drilling in 2018.

Exploration drilling at the Timmins West property totaled approximately 45,700 metres in 2017:

Drilling at the Timmins deposit continued to test the down-plunge extension of the Timmins Deposit Fold Nose (TDFN) from surface and underground platforms. Surface directional drilling targeted the TDFN approximately 350 to 550 meters below the previous resource from two deep master holes. Two holes collared from underground platforms tested the area immediately below the current resource limit.

A deep underground exploration program was initiated at the Thunder Creek deposit to test the down-dip extensions of the Rusk and Porphyry Zones and explore for potential new mineralized structures at depth. Significant alteration and narrow veining with low-grade gold has been observed in all deeper drilling.

Surface exploration along the 144 Trend in 2017 focused on the 144 South, 144 Offset and 17 Zone targets. Drilling in the 144 South Zone, located approximately 1.6 km southwest of the 144 Gap Deposit, tested the extension of mineralization now defined over a 300 meter strike length and 700 meter vertical window along a southwest-trending corridor which remains open at depth and along strike to the southwest.

The 144 Offset and 17 Zone areas are new targets located 1.5 to 3 kilometers southwest of the 144 South Zone where wide spaced drilling has defined a target corridor over a 750 meter strike length and to 800 meters depth. The zones remain open along strike to the northeast. Additional drilling is planned for 2018.

Exploration along the Gold River Trend, located 4 kilometers south of the Timmins West Mine, focused on infill drilling to improve the geologic model interpretation, evaluate several extensional targets and provide metallurgical samples. Additional infill/metallurgical and extensional drilling is proposed for 2018.

FRANCO-NEVADA ROYALTY AGREEMENT

In February of 2012 Lake Shore and Franco-Nevada entered into a royalty agreement relating to production from the Timmins West Mine. Pursuant to the terms of the royalty agreement, Franco-Nevada paid US$35 million for a 2.25% NSR royalty on the sale of minerals from the Timmins West Mine. The terms of the royalty agreement provide for, among other things, a right of first refusal in respect of any further royalties granted on the Timmins West Mine, as well as a preferential processing right with respect to ore from the Timmins West Mine being processed at the Company’s Bell Creek Mill.

76 Tahoe Resources Inc.

Under the terms of the right of first refusal, if the Company proposes to grant a new royalty or stream interest on the Timmins West Mine, Franco-Nevada must be given notice of such proposed new royalty or stream. Franco-Nevada would then have 30 business days to decide whether to acquire the royalty or stream on the proposed terms. Under the terms of the preferential processing right, the Company has agreed to use commercially reasonable efforts to mine ore from the Timmins West Mine at the maximum operational rate in accordance with sound mining practices, with a view to maximizing the economic potential of the Franco-Nevada royalty. To the extent that the Company fails to use such efforts, the Company would be obligated to pay the 2.25% NSR royalty to Franco-Nevada on any replacement material that displaced ore from the Timmins West Mine at the Bell Creek Mill. The preferential processing right ceases to apply once US$35 million in royalty payments are made under the royalty agreement. As at the end of 2017, approximately US$19.7 million was paid to Franco-Nevada pursuant to the terms of the royalty. As of the date of this AIF, the preferential processing right has not required any payment to be made in regards to any replacement material.

OTHER EXPLORATION AND DEVELOPMENT PROPERTIES

WHITNEY

The Whitney gold property is located in the township of Whitney, within the city limits of Timmins, Ontario. The property is comprised of two unpatented mining claims and 45 patented claims totaling approximately 872 hectares held in joint venture by Tahoe (79%) and Goldcorp (21%), with Tahoe as operator. All of the Whitney claims are in good standing.

Gold mineralization at Whitney is broadly classified as mesothermal mineralization in the Archean-age Abitibi Greenstone Belt and is associated with large-scale regional deformation zones (Destor Porcupine zone). The greenstone-hosted quartz-carbonate vein deposits at Whitney are related to metamorphic fluids liberated during accretionary processes and generated by prograde metamorphism.

The Mineral Resource estimate for Whitney, with an effective date of February 26, 2014, is summarized below:

WHITNEY MINERAL RESOURCES
Resource Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Measured	1.0	7.02	218
Indicated	2.3	6.77	491
Meas + Ind	3.2	6.85	709
Inferred	1.0	5.34	171

Totals may not sum due to rounding.

The Whitney Mineral Resource estimate is reported using a gold cut-off grade of 3.0 g/t, which was derived using a gold price of US$1,200/oz, operating costs of US$96.75/tonne milled, mining dilution of 20% and process recovery of 95%. The Mineral Resource estimate was prepared in accordance with NI 43-101 and classifications adopted by the CIM Council. There are no Mineral Reserves reported for the Whitney property.

GOLD RIVER

The Gold River gold property is located approximately 20 kilometres southwest of the city of Timmins, Ontario. The property consists of 95 unpatented mining claims, totaling approximately 2,320 hectares, within Thorneloe Township which are subject to multiple underlying NSR royalties ranging from two to three percent. All of the Gold River claims are in good standing.

The Gold River deposit is situated in the western portion of the Archean-age Abitibi Greenstone Belt, hosted in metasedimentary rocks of the Porcupine assemblage. Mineralization generally occurs as steeply-dipping irregular lenses which vary from less than one metre to locally five metres in width. Gold mineralization within these zones is associated with disseminated and quartz vein-related arsenopyrite and pyrite, with traces of ancillary sulfides.

The Mineral Resource estimate for the Gold River deposit, with an effective date of April 5, 2012, is summarized below:

Annual Information Form for the Year Ended December 31, 2017 77

GOLD RIVER MINERAL RESOURCES
Resource Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Indicated	0.7	5.29	117
Inferred	5.3	6.06	1,028

The Gold River Mineral Resource estimate is reported using a gold cut-off grade of 2.0 g/t, which was derived using a gold price of US$1,200/oz, operating costs of US$82.00/tonne milled and process recovery of 85%. A minimum thickness of two metres was used to constrain the reported Mineral Resources. The Mineral Resource estimate was prepared in accordance with NI 43-101 and classifications adopted by the CIM Council. There are no Measured Mineral Resources nor Mineral Reserves reported for the Gold River property.

JUBY

The Juby gold property is located approximately 15 kilometres southwest of the town of Gowganda, Ontario and about 100 kilometres southwest of the city of Timmins, Ontario in the Shining Tree Area of northern Ontario. The Company holds a 100% interest in 221 unpatented mining claims totaling approximately 5,837 hectares. All of the Juby claims are in good standing.

The Juby deposit is situated along the regional Ridout-Tyrrell Deformation Zone and hosted in Archean-age metavolcanics and metasediments of the Indian Lake Group. Gold mineralization is associated with discreet narrow quartz veins, quartz-carbonate-pyrite veins within broad zones of ankerite-albite-silica-sericite alteration, and feldspar (± quartz) porphyry dikes. Structural and stratigraphic contacts and rheological contrasts appear to be the primary controls of mineral emplacement.

The Mineral Resource estimate for the Juby deposit, with an effective date of February 24, 2014, is summarized below:

JUBY MINERAL RESOURCES
Resource Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Indicated	26.6	1.28	1,090
Inferred	96.2	0.94	2,909

Mineral Resources are reported as in situ resources using a gold cut-off grade of 0.40 g/t. The Mineral Resource estimate was prepared in accordance with NI 43-101 and classifications adopted by the CIM Council. There are no Measured Mineral Resources nor Mineral Reserves reported for the Juby property.

FENN-GIB

The Fenn-Gib gold property is located approximately 80 kilometres east of the city of Timmins, Ontario and 21 kilometres east of Matheson, Ontario. The property is 100% owned by the Company and is comprised of eight unpatented mining claims, 20 patented mining claims, and 58 mineral leases with varying NSR and Net Profit (“NP”) royalties attached. Approximately 26% of the Mineral Resources occur within mineral leases which are subject to a two percent NSR royalty; the remaining resources are not subject to NSR or NP royalties. Barrick Gold has an option to acquire a 51% interest in the Fenn-Gib property and become the project’s operator upon the release of a NI 43-101 compliant resource that demonstrates the existence of a mineral resource of at least five million ounces of gold. Should they exercise the option, Barrick would be required to pay the Company cash consideration representing two times the total investment by the Company, excluding acquisition costs.

The Fenn-Gib property is situated in the southern portion of the Abitibi Subprovince and is underlain by metavolcanics and metasediments of the Hoyle Sedimentary Assemblage and Kidd-Munro Volcanic Assemblage. Gold mineralization is primarily associated with disseminated pyrite in syenites and basalts affected by albitization and silicification in proximity to the fault contact between the two assemblages, with a close association with syenite dikes and intrusions.

The Mineral Resource estimate for the Fenn-Gib deposit, with an effective date of November 17, 2011, is summarized below:

78 Tahoe Resources Inc.

FENN-GIB MINERAL RESOURCES
Resource Classification		Tonnes (M)	Gold (g/t)	Gold (koz)
Inside Pit Shell	Indicated	40.8	0.99	1,300
	Inferred	23.3	0.90	670
Below Pit	Indicated	0.04	1.89	2
	Inferred	1.2	1.90	80
All Material	Indicated	40.8	0.99	1,300
	Inferred	24.5	0.95	750

Totals may not sum due to rounding.

Nearly all of the Indicated Mineral Resources and approximately 90% of Inferred Mineral Resources are reported within a $1,190/oz gold pit shell using a gold cut-off grade of 0.50 g/t, operating costs of US$13.00/tonne ore and process recovery of 85%. The remaining Indicated and Inferred Mineral Resources which are occur below the pit limits are reported using a gold cut-off grade of 1.5 g/t. The Mineral Resource estimate was prepared in accordance with NI 43-101 and classifications adopted by the CIM Council. There are no Measured Mineral Resources nor Mineral Reserves reported for the Fenn-GIb property.

MARLHILL

The Marlhill gold deposit is located within the Company’s Bell Creek Mine property in Hoyle Township, approximately 20 kilometres northeast of the city of Timmins, Ontario. The Marlhill property is comprised of a Crown mining lease for four unpatented mining claims and two patented claims covering approximately 65 hectares. The property is subject to a two percent NSR royalty.

The Marlhill deposit is situated in the western part of the Archean-age Southern Abitibi Greenstone Belt and is hosted in metavolcanic and clastic metasedimentary rocks of the Tisdale and Porcupine assemblages. Gold is hosted in quartz veins generally within magnesium-rich tholeiitic mafic metavolcanics. Mineral Resources estimated for the Marlhill deposit are confined to the M1 Vein, which strikes northwest and dips to the northeast. Other veins have been identified at Marlhill, but the lack of defined continuity has precluded their inclusion in the Mineral Resource estimate.

The Mineral Resource estimate for the Marlhill deposit, with an effective date of March 1, 2011, is summarized below:

MARLHILL MINERAL RESOURCES (M1 VEIN)
Resource Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Indicated	0.4	4.52	57

Mineral Resources are reported as in situ resources using a gold cut-off grade of 0.2.9 g/t and a minimum width of two metres. The cut-off grade was determined using a gold price of US$1,125/oz, operating costs of C$100/tonne and metallurgical recovery of 90%. The Mineral Resource estimate was prepared in accordance with NI 43-101 and classifications adopted by the CIM Council. There are no Measured or Inferred Mineral Resources nor Mineral Reserves reported for the Marlhill property.

VOGEL/SCHUMACHER

The Vogel/Schumacher gold property is located Hoyle Township, approximately 20 kilometres east of the city of Timmins, Ontario. The property is comprised of two patent lots totaling 12.8 hectares which are subject to a two percent NSR royalty.

The Vogel/Schumacher deposit is situated within the Western Abitibi Subprovince, hosted in Archean-age carbonate-altered greenschist facies metavolcanic and metasedimentary rocks belonging to the Tisdale and Porcupine assemblages. Gold mineralization occurs within zones of quartz veining associated with pyrite and ankerite-albite-sericite alteration. Mineralized zones vary from less than one metre to in excess of 20 metres.

The Mineral Resource estimate for the Vogel/Schumacher deposit, with an effective date of June 14, 2011, is summarized below:

Annual Information Form for the Year Ended December 31, 2017 79

VOGEL/SCHUMACHER MINERAL RESOURCES
Resource Classification		Tonnes (M)	Gold (g/t)	Gold (koz)
Inside Pit Shell	Indicated	2.2	1.75	125
	Inferred	0.7	1.43	32
Below Pit	Inferred	0.8	5.56	137
All Material	Indicated	2.2	1.75	125
	Inferred	1.5	3.60	169

Totals may not sum due to rounding.

Mineral Resources labeled as ‘Inside Pit Shell’ are those resources which occur inside an optimized pit shell developed using a gold price of US$1,150/oz, operating costs of US$24.75/tonne and process recovery of 95%. ‘Inside Pit Shell’ Mineral Resources are reported at a gold cut-off grade of 0.63 g/t. Mineral Resources which occur below the pit shell are reported using a gold cut-off grade of 2.9 g/t. The Mineral Resource estimate was prepared in accordance with NI 43-101 and classifications adopted by the CIM Council. There are no Measured Mineral Resources nor Mineral Reserves reported for the Vogel/Schumacher property.

DIVIDENDS DISTRIBUTIONS AND REINVESTMENT PLAN

In December 2014 the Company paid its inaugural cash dividend of $0.02 per Share per month, and additional $0.02 per Share dividends were paid each month in 2015 and 2016, and until and including July 2017. The Company implemented a dividend reinvestment plan in October 2016, which was open for enrollment to qualified participants.

Dividends declared and paid during 2017, 2016 and 2015 totaled $43.7 million, $69.4 million and $49.7 million, respectively. Dividends paid in 2017 and 2016 consisted of cash and non-cash payments in the form of Shares of the Company through the dividend reinvestment plan. For 2017 and 2016, cash payments were $35.7 million and $67.0 million, respectively, and non-cash payments were $8.0 million and $2.4 million, respectively, for a total issuance of 1,010,844 Shares and 256,747 Shares of the Company, respectively.

The Company announced the cessation of the dividend and the dividend reinvestment plan, beginning August 8, 2017, due to the ruling of the Guatemalan court to provisionally suspend the Escobal mining license. The dividend cessation is intended to protect the health of the Company’s balance sheet and to ensure the Company has financial flexibility.

DESCRIPTION OF CAPITAL STRUCTURE

The Company is authorized to issue an unlimited number of Shares. As at the date of this AIF, 312,775,761 shares were issued and outstanding as fully paid and non-assessable Shares.

The holders of Shares are entitled to one vote per Share at meetings of the shareholders of the Company. Holders of Shares are entitled to dividends, if, as and when declared by the Board and, upon liquidation, to participate equally in such assets of the Company as are distributed to the holders of Shares.

MARKET FOR SECURITIES

The Shares are listed on the TSX under the symbol “THO” and on the NYSE under the symbol “TAHO.” The following table sets forth information relating to the trading of the Shares on both the TSX and NYSE for the months indicated.

80 Tahoe Resources Inc.

TRADING HISTORY ON THE TSX

TRADING PRICE (CAD$)
2017	High	Low	Volume
January	15.11	11.27	41,062,400
February	12.59	10.57	23,401,600
March	11.57	9.58	27,554,100
April	12.26	10.58	23,635,400
May	12.98	10.50	27,678,400
June	12.68	10.72	23,996,200
July	11.11	6.36	38,453,400
August	7.20	5.31	26,483,800
September	8.50	5.57	40,854,500
October	6.87	5.70	17,283,500
November	6.33	5.44	18,594,900
December	6.15	5.34	18,844,500
TRADING PRICE (CAD$)
2018	High	Low	Volume
January	6.36	5.32	26,277,900

Source: http://finance.yahoo.com/q?s=tho.to

The price of the Shares as reported by the TSX at the close of business on December 29, 2017, the last business day of the year in Canada, was CAD$6.03 per share and on February 21, 2018 was CAD$5.12 per share.

TRADING HISTORY ON THE NYSE

TRADING PRICE (USD)
2017	High	Low	Volume
January	11.43	8.59	58,585,400
February	9.58	8.03	47,496,700
March	8.68	7.12	65,398,100
April	9.25	7.82	63,211,700
May	9.68	7.67	65,454,700
June	9.44	8.07	76,695,700
July	8.51	4.93	82,551,900
August	5.68	4.24	71,407,200
September	7.00	4.59	80,963,700
October	5.50	4.42	46,069,100
November	4.91	4.29	44,307,400
December	4.86	4.15	47,843,600
TRADING PRICE (USD)
2018	High	Low	Volume
January	5.09	4.27	58,459,500

Source: http://finance.yahoo.com/q?s=taho

The price of Shares as reported by the NYSE at the close of business on December 29, 2017, the last business day of the year in the US, was $4.79 and on February 21, 2018 was $4.04 per share.

Annual Information Form for the Year Ended December 31, 2017 81

PRIOR SALES

In the 12-month period ended December 31, 2017, the Company granted 1,407,000 options and 270,750 share awards (consisting of 195,000 Deferred Share Awards granted on April 1, 2017 (186,000) and August 21, 2017 (9,000), and 75,750 Restricted Share Awards granted on May 5, 2017) under its Share Option and Incentive Share Plan adopted on April 20, 2010. The details of the options granted by the Company during the year ended December 31, 2017 are as follows:

Grant Date	Options Granted	CAD$	Expiry Date
January 9, 2017	15,000	$12.73	December 9, 2022
March 14, 2017	1,230,000	$10.00	February 11, 2023
March 27, 2017	60,000	$10.23	February 24, 2023
May 5, 2017	15,000	$11.65	April 4, 2023
July 3, 2017	15,000	$11.18	June 2, 2023
August 21, 2017	72,000	$6.96	July 21, 2023

DIRECTORS AND EXECUTIVE OFFICERS

DIRECTORS AND EXECUTIVE OFFICERS

The following tables set forth information regarding Tahoe’s directors and executive officers. The term of office for the Directors expires as of the Company’s Annual General Meeting which will be held on May 2, 2018.

DIRECTORS
Name and Municipality of Residence	Position(s) with the Company	Date of Appointment		Principal Occupation
Ronald W. Clayton Reno, Nevada, United States	Director		9-Aug-16	President and Chief Executive Officer of the Company
Tanya Jakusconek(3) (4) Toronto, Ontario, Canada	Director		2-May-11	Senior Gold Research Analyst for Scotia Bank
Chuck Jeannes(2) (3) Reno, Nevada, United States	Director		1-Jan-17	Independent Director
Drago G. Kisic(1) (4) Lima, Peru	Director		1-April-15	President of Macrocapitales Safi and Bodega San Nicolas
C. Kevin McArthur(5) Reno, Nevada, United States	Executive Chair		10-Nov-09	Executive Chair of the Company
Alan Moon(1) (4)  Calgary, Alberta, Canada	Director		4-Apr-16	Corporate Director
A. Dan Rovig(2) Reno, Nevada, United States	Lead Director		8-Jun-10	Independent Consultant
Paul B. Sweeney(1) (3) Vancouver, British Columbia, Canada	Director		14-Apr-10	Independent Business Consultant
James S. Voorhees(2) (4) Santa Barbara, California, United States	Director		14-Apr-10	Independent Director
Kenneth F. Williamson(1)(3) Dwight, Ontario, Canada	Director		8-Jun-10	Independent Director

Member of:

(1) Audit Committee.

(2) Corporate Governance and Nominating Committee.

(3) Compensation Committee.

(4) Health, Safety, Environment and Community Committee.

Other:

(5) Mr. McArthur was previously the President and Chief Executive Officer of the Company beginning November 10, 2009.

(6) Mr. Klaus Zeitler resigned as a Director on May 3, 2017.

82 Tahoe Resources Inc.

EXECUTIVE OFFICERS
Name and Municipality of Residence	Position(s) with the Company	Date of Appointment	Principal Occupation
C. Kevin McArthur Reno, Nevada, United States	Executive Chair and Director	7-April-15	Executive Chair of the Company
Ronald W. Clayton Reno, Nevada, United States	President and Chief Executive Officer	9-Aug-16	President and Chief Executive Officer of the Company
Elizabeth McGregor Reno, Nevada, United States	Vice President and Chief Financial Officer	9-Aug-16	Vice President and Chief Financial Officer of the Company
Brian Brodsky Reno, Nevada, United States	Vice President, Exploration	1-Jun-10	Vice President, Exploration of the Company
Edie Hofmeister Reno, Nevada, United States	Executive Vice President, Corporate Affairs and General Counsel	1-Feb-10	Executive Vice President, Corporate Affairs and General Counsel

The principal occupation of each of the Company’s directors and executive officers within the past five years is disclosed in the brief biographies set forth below.

Ron Clayton, Director, President and Chief Executive Officer. Mr. Clayton was appointed President and Chief Executive Officer on August 16, 2016 at which point he became a member of the Board of Directors. Mr. Clayton began work with the Company on March 30, 2010 as the Company’s first Chief Operating Officer and was appointed President on March 12, 2014. On January 30, 2018, Mr. Clayton was appointed as a Director to the Board of Gold Standard Ventures Corp. Mr. Clayton is a seasoned mining executive with over 35 years of mine operating experience. As a member of Tahoe’s founding executive team, Mr. Clayton led the construction of the Escobal mine. Prior to joining Tahoe, he was Senior Vice President, Operations, and the General Manager of several underground mines for Hecla Mining Company. He also held the position of Vice President, Operations with Stillwater Mining Company and a number of engineering and operations management positions with Climax Molybdenum Company and Homestake Mining Company. Mr. Clayton earned his Bachelor of Science Degree in Mining Engineering from the Colorado School of Mines and is a graduate of the Tuck School of Business Executive Program at Dartmouth College.

Tanya Jakusconek, Director. Ms. Jakusconek is a Senior Gold Research Analyst who has covered large and mid-tier North American producers since 1991. She began her investment career at RBC Dominion Securities, and then worked at BBN James Capel and National Bank Financial before moving to Scotiabank in 2011. She earned a B.Sc (Honours) in Geology and an M.Sc Applied (MINEX Program), both from McGill University in Montreal.

Charles Jeannes, Director. Mr. Jeannes was appointed to the Board of Directors effective January 1, 2017. He is also currently a director of Wheaton Precious Metals Corporation and serves as a University of Nevada, Reno (“UNR”) Foundation Trustee (a non-profit Board). At Goldcorp Inc. (“Goldcorp”), he served as President and Chief Executive Officer from 2009 until April, 2016, and Executive Vice President, Corporate Development from 2006 until 2008. From 1999 until the acquisition of Glamis Gold Ltd. (“Glamis”) by Goldcorp, he was Executive Vice President, Administration, General Counsel and Secretary of Glamis. Prior to joining Glamis, Mr. Jeannes worked for Placer Dome Inc. (“Placer Dome”), most recently as Vice President of Placer Dome North America. He holds a Bachelor of Arts degree from UNR and graduated from the University of Arizona School of Law with honours in 1983. He practiced law from 1983 until 1994 and has broad experience in capital markets, mergers and acquisitions, public and private financing and international operations.

Drago G. Kisic, Director. Mr. Kisic holds a B.S. from Pontificia Universidad Católica del Perú and a Master’s degree (B-Phil) from Oxford University. As a founding partner and current Director of Macroconsult and Macroinvest, Mr. Kisic advised the Government of Peru during the privatization of Centromin, Minero-Peru, Hierro-Peru and Peru's telephone and telecommunications companies CPT and Entel-Peru. Mr. Kisic is a member of the board of the Obrainsa (a construction company); Haug (a steel contractor); and Corporación Rey (textile related company). Currently, he is President of Macrocapitales Safi and Bodega San Nicolás and is a member and former President of the Peruvian Center for International Studies (CEPEI) and the Peruvian Institute of Business Management (IPAE). Mr. Kisic was advisor to the Executive Director of the World Bank, and was President of CONASEV (the Peruvian securities and companies' regulatory authority) and Vice-president of the Lima Stock Exchange. Mr. Kisic was a member of the board and head of the Economic Office and Manager of the Balance of Payments & External Sector Bureau of Peru's Central Reserve Bank and member of the board of Banco Financiero del Peru. He was also the Head of the Border Integration Team during the peace negotiations between Peru and Ecuador.

Annual Information Form for the Year Ended December 31, 2017 83

C. Kevin McArthur, Executive Chair of the Board. Mr. McArthur founded the Company and was appointed President and Chief Executive Officer on November 10, 2009. On April 7, 2015, upon the completion of the acquisition of Rio Alto, he assumed the role of Executive Chair of the Company. From November 15, 2006 until his retirement in December 2008, he was President, Chief Executive Officer and a Director of Goldcorp. He was President and Chief Executive Officer of Glamis Gold Ltd. from January 1998 until it was acquired by Goldcorp in November 2006 and served in a variety of management positions with Glamis beginning in 1988. Prior experience includes various operating and engineering positions with BP Minerals and Homestake Mining Company. He holds a B.S. degree in Mining Engineering from the University of Nevada. He is currently a Director of Royal Gold, Inc.

Alan Moon, Director. Mr. Moon is a former senior executive with significant international and Canadian business experience. For the past 20 years he has served on the Board of Directors, including Board Chair, on companies in a variety of industries that operated both internationally and in Canada, including Oil and Gas Exploration and Production, Electrical Generation and Distribution and Mineral Exploration and Production. Mr. Moon was Chair of Lake Shore from 2005 until it was acquired by Tahoe. Mr. Moon is very active in the charitable sector in Calgary having served on the Board of Directors of a number of organizations. He was the past Chair of the Kahanoff Centre for Charitable Activities a unique charity that owns and operates a significant office building that exclusively rents space to charitable organizations. Mr. Moon has a B.Sc. Chem. Eng. from the University of Alberta and an MBA from the University of Western Ontario. He earned his ICD.D designation in 2005.

A. Dan Rovig, Lead Director. Mr. Rovig was the founding Chair of the Board of the Company and served in that capacity from June 2010 until the completion of the acquisition of Rio Alto on April 1, 2015. Mr. Rovig is currently the Lead Director of the Board of the Company. He was a Director and Chairman of the Board of Glamis Gold Ltd. from November 1998 to November 2006 and a Director of Goldcorp from 2006 to 2014. Prior to November 1998, Mr. Rovig served first as President of Glamis from September 1988 until his appointment as a Director, and the President and Chief Executive Officer of Glamis and its subsidiaries from November 1989 to August 1997 when he retired. Prior to 1988, Mr. Rovig was an executive Officer of British Petroleum Ltd., including its subsidiaries Amselco Minerals Inc. and BP Minerals America for five years. Prior experience included 16 years in the Anaconda Company in a variety of positions from Metallurgist to Senior VP Operations. Mr. Rovig holds a B.S. degree in Mining Engineering, a M.S. degree in Mineral Dressing Engineering from Montana College of Mineral Science and Technology, and a Doctor of Science degree, Honoris Causa, from Montana Tech of the University of Montana. He is also a registered member of the Society for Mining, Metallurgy and Exploration, and the Geological Society of Nevada.

Paul B. Sweeney, Director. Mr. Sweeney has been a Director of the Company since April 2010. He is also currently a director of OceanaGold Corporation and Adventus Zinc Corporation. From May 2010 to May 2011, he was a part-time commercial advisor to Plutonic Power Corporation and subsequently Alterra Power Corp. From August 2009 to April 2010, he served as Plutonic Power Corporation’s President. He was Executive Vice President, Corporate Development of Plutonic Power Corporation from October 2008 to August 2009 and was Executive Vice President, Business Development of Plutonic Power Corporation from January 2007 to October 2008. He was an independent business and financial consultant from 2005 to 2007 and was Vice President and Chief Financial Officer of Canico Resource Corp. from 2002 to 2005. Mr. Sweeney has over 35 years of experience in financial management of mining and renewable energy companies.

James S. Voorhees, Director. Mr. Voorhees has been an independent consultant since 2007. From 2005 to 2006 Mr. Voorhees was Executive Vice President and Chief Operating Officer of Glamis Gold Ltd. and from 1999 to 2005 he was Vice President Operations and Chief Operating Officer of Glamis. Prior to joining Glamis, Mr. Voorhees held various engineering and operating positions with Newmont Mining Corp., Santa Fe Pacific Minerals, Western Mining Corp., and Atlantic Richfield Company. Mr. Voorhees holds a B.S. degree in Mining Engineering from the University of Nevada and is a registered professional engineer.

Kenneth F. Williamson, Director. Mr. Williamson has been a Director of the Company since June 2010 and a Director of Goldcorp since November 2006. He was Vice Chairman Investment Banking of Midland Walwyn/Merrill Lynch Canada Inc. from 1993 until his retirement in 1998. He was a Director of Glamis Gold Ltd. from April 1999 to November 2006. He has worked in the securities industry for more than 25 years, concentrating on financial services and the natural resource industries in the United States and Europe. He was Chairman of the Board of BlackRock Ventures until it was acquired by Shell Canada in 2006. As an active board member he has chaired various committees including audit, governance, and compensation. Mr. Williamson is a registered Professional Engineer and holds a Bachelor of Applied Science degree from the University of Toronto and a M.B.A. degree from the University of Western Ontario.

Brian Brodsky, Vice President, Exploration. Mr. Brodsky was appointed Vice President of Exploration of the Company and began work for the Company on June 1, 2010. Mr. Brodsky is an economic geologist with over 35 years of precious metals exploration experience. He worked for Goldcorp and its predecessor Glamis Gold Ltd. from 2003 to 2010 as Exploration Manager, overseeing regional studies and detailed property assessments

84 Tahoe Resources Inc.

throughout Guatemala. His team was instrumental in the exploration and development of the Marlin Mine and Cerro Blanco gold-silver deposit as well as the grass-roots discovery and definition of the Escobal vein. In early 2010 Mr. Brodsky was appointed to the position of Director of Exploration for the US and Latin America for Goldcorp. Prior to joining Glamis/Goldcorp, Mr. Brodsky explored gold-silver, base metals and uranium deposits in various geologic environments throughout the United States, Peru and West Africa for Rio Algom Ltd., Cordex, Cruson & Pansze. He holds a B.S. in Geology from the University of Nevada.

Edie Hofmeister, Executive Vice President Corporate Affairs & General Counsel. Ms. Hofmeister was appointed Corporate Secretary of the Company on February 1, 2010, Vice President, General Counsel on March 2, 2011 and Executive Vice President, Corporate Affairs, General Counsel on August 8, 2017. Prior to that, she served as General Counsel to a $2-billion bankruptcy Trust in Reno, Nevada. From 1994 to 2001 she worked as an attorney at Brobeck, Phleger and Harrison LLP where she acted as senior litigation counsel to Exxon/Mobil, Shell and Imperial Oil Canada in complex environmental coverage cases. Since 2007 she has worked with indigenous groups in developing nations to promote reforestation and sustainable community programs. Ms. Hofmeister holds a B.A. from the University of California Los Angeles, an M.A. in International Studies from the University of Notre Dame, and a J.D. from the University of San Francisco School of Law.

Elizabeth McGregor, Vice President and Chief Financial Officer. Ms. McGregor was appointed Vice President and Chief Financial Officer of the Company on August 9, 2016. Ms. McGregor is a Canadian Chartered Professional Accountant (CPA, CA) and, prior to her current assignment, served as Tahoe’s VP Treasurer. She directs financial planning, corporate liquidity, financial reporting and risk management. Prior to joining Tahoe, she worked at Goldcorp where she held various financial roles including Director of Project Finance and Cost Control; Administration Manager at the Peñasquito mine; and Director of Risk. Ms. McGregor began her career at KPMG as Audit Manager. She holds a B.A. (Hons) from Queen’s University at Kingston.

As of February 21, 2018, Tahoe’s directors, executive officers and employees, as a group, beneficially owned, directly or indirectly, or exercised control or direction over vested Shares, representing approximately 1.3% of the issued Shares before giving effect to the exercise of share purchase options and the receipt of Shares issuable pursuant to Deferred or Restricted Share Awards. The directors, executive officers and employees, as a group, held 417,000 Deferred Share Awards and 3,570,000 options as at February 21, 2018.

CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS

No director or executive officer of the Company is, or within ten years prior to the date hereof has been, a director, chief executive officer or chief financial officer of any company (including the Company) that, (i) was subject to a cease trade order, an order similar to a cease trade 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 while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or (ii) was subject to a cease trade order, an order similar to a cease trade 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 the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

No director or executive officer of the Company, or a shareholder holding a sufficient number of securities of the Company that would affect material control of the Company, (i) is, or within ten years prior to the date hereof has been, 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, or (ii) has, within ten years prior to the date hereof, 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 the director, executive officer or shareholder.

No director or executive officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, has been subject to (i) 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 (ii) 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.

Annual Information Form for the Year Ended December 31, 2017 85

CONFLICTS OF INTEREST

To the best of the Company’s knowledge there are no known existing or potential material conflicts of interest among the Company and the Company’s directors, officers or other members of management, as a result of their outside business interests except that certain of Tahoe’s directors and officers serve as directors and officers of other companies, and therefore it is possible that a conflict may arise between their duties to Tahoe and their duties as a director or officer of such companies. In the event of such a conflict of interest, the Company will follow the requirements and procedures of applicable corporate and securities legislation and applicable exchange policies, including the relevant provisions of the BCA. See "Description of Tahoe’s Business - Risk Factors Relating to Tahoe’s Business".

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

None of Tahoe’s directors, executive officers or any shareholder who beneficially owns or controls or directs, directly or indirectly, more than 10% of the issued Shares, or any of their respective associates or affiliates, had any material interest, directly or indirectly, in any transaction within the three most recently completed financial years or during the current financial year that has materially affected or is reasonably expected to affect the Company.

MATERIAL CONTRACTS

On February 16, 2018, the Company closed its Second Amended and Restated Credit Facility with its bank syndicate, providing the Company with full access to a $175 million revolving credit facility, which includes a $25 million accordion feature, for total access of $200 million in capital. The Second Amended and Restated Credit Facility matures on July 19, 2021.See "General Development of Tahoe’s Business - Indebtedness - Revolving Credit Facility".

TRANSFER AGENTS AND REGISTRAR

The transfer agent and registrar for the Shares is Computershare Investor Services Inc. at its principal offices in Vancouver, British Columbia.

INTERESTS OF EXPERTS

All scientific and technical information in this AIF relating to the Escobal, La Arena, Shahuindo, Bell Creek and Timmins West Mines, as well as La Arena II has been verified by Charles Muerhoff, the Company’s Vice President Technical Services and Qualified Person as defined by NI 43-101. Mr. Muerhoff beneficially owns, directly or indirectly, less than 1% of the outstanding securities of the Company.

The independent registered public accounting firm of the Company is Deloitte LLP. Deloitte LLP is independent with respect to the Company within the meaning of the Rules of Professional Conduct of the Chartered Professional Accountants of British Columbia.

86 Tahoe Resources Inc.

SELECTED CONSOLIDATED FINANCIAL INFORMATION

Selected audited consolidated financial information is as follows:

	Years Ended December 31,
	2017		2016		2015			2014
Revenues	$	733,557		784,503		519,721			350,265
Earnings (Loss)	$	81,793		117,876		(71,911	)		90,790
Earnings (Loss) Per Share
Basic	$	0.26		0.41		(0.35	)		0.62
Diluted	$	0.26		0.41		(0.35	)		0.61
Cash and Cash Equivalents	$	125,665		163,368		108,667			80,356
Total Assets	$	3,080,638		3,071,253		2,002,461			975,628
Total Liabilities	$	455,750		499,099		338,430			97,568
Total Shareholders’ Equity	$	2,624,888		2,572,154		1,664,031			878,060

(1) In thousands of US dollars, except per share amounts.

Further discussion of the Company’s financial results is contained in the Company’s Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2017.

ADDITIONAL CORPORATE AND FINANCIAL INFORMATION

Additional information relating to the Company, including additional financial information contained in the audited annual financial statements and the related Management Discussion and Analysis for the year ended December 31, 2017, and directors’ and officers’ remuneration and indebtedness, principal holders of the Company’s securities and securities authorized for issuance under equity compensation plans contained in the Company’s 2017 Management Information Circular which will be filed on March 26, 2018, can be found on SEDAR at www.sedar.com or on the Company’s website at www.tahoeresources.com.

INFORMATION CONCERNING THE COMPANY'S AUDIT COMMITTEE AND EXTERNAL AUDITOR

THE AUDIT COMMITTEE'S DUTIES AND CHARTER

The Audit Committee reviews all financial statements of the Company prior to their publication, recommends the appointment of independent auditors, reviews and approves professional services to be rendered by them and reviews fees for audit services. The Audit Committee meets with the Company’s auditors without management being present to discuss the various aspects of the Company’s financial statements and the independent audit.

On April 20, 2010, the Board adopted a charter for the Audit Committee to follow in carrying out its audit and financial review functions. The charter was amended effective April 13, 2012 in order to reflect certain requirements applicable to audit committees under Rule 10A-3(b) under the US Exchange Act, in connection the Company’s successful application to list its common shares on the NYSE. The charter was further amended effective March 12, 2014, to include certain provisions clarifying the Audit Committee’s responsibilities with respect to the Company’s internal audit function, as required by Section 303A.07 of the NYSE Listed Manual. This charter was further amended effective August 2015 to add minor clarifications. This amended charter can be found on Tahoe’s website at www.tahoeresources.com.

COMPOSITION OF THE AUDIT COMMITTEE

The Audit Committee is currently composed of four directors: Paul Sweeney (Chairman), Drago Kisic, Kenneth Williamson, and Alan Moon. Each of these individuals is independent and financially literate within the meaning of NI 52-110.

RELEVANT EDUCATION AND EXPERIENCE

All Audit Committee members have significant management experience in the mining, securities or investment banking industry as well as extensive continuing financial education. Details regarding the education and experience of each member of the Audit Committee that is relevant to the performance of his responsibilities as an Audit Committee member is as follows:

Annual Information Form for the Year Ended December 31, 2017 87

Mr. Sweeney has been a Director of the Company since April 2010. He is also currently a Director of OceanaGold Corporation and Adventus Zinc Corporation. From May 2010 to May 2011, he was a part-time commercial advisor to Plutonic Power Corporation and subsequently Alterra Power Corp. From August 2009 to April 2010, he served as Plutonic Power Corporation’s President. He was Executive Vice President, Corporate Development of Plutonic Power Corporation from October 2008 to August 2009 and was Executive Vice President, Business Development of Plutonic Power Corporation from January 2007 to October 2008. He was an independent business and financial consultant from 2005 to 2007 and was Vice President and Chief Financial Officer of Canico Resource Corp. from 2002 to 2005. Mr. Sweeney has over 35 years of experience in financial management of mining and renewable energy companies.

Mr. Kisic holds a B.S. from Pontificia Universidad Católica del Perú and a Master’s degree (B-Phil) from Oxford University. As a founding partner and current Director of Macroconsult and Macroinvest, Mr. Kisic advised the Government of Peru during the privatization of Centromin, Minero-Peru, Hierro-Peru and Peru's telephone and telecommunications companies CPT and Entel-Peru. Mr. Kisic is a member of the board of the Obrainsa (a construction company); Haug (a steel contractor); and Corporación Rey (textile related company). Currently, he is President of Macrocapitales Safi and Bodega San Nicolás and is a member and former President of the Peruvian Center for International Studies (CEPEI) and the Peruvian Institute of Business Management (IPAE). Mr. Kisic was advisor to the Executive Director of the World Bank, and was President of CONASEV (the Peruvian securities and companies' regulatory authority) and Vice-president of the Lima Stock Exchange. Mr. Kisic was a member of the board and head of the Economic Office and Manager of the Balance of Payments & External Sector Bureau of Peru's Central Reserve Bank and member of the board of Banco Financiero del Peru. He was also the Head of the Border Integration Team during the peace negotiations between Peru and Ecuador.

Mr. Williamson has been a Director of the Company since June 2010 and a Director of Goldcorp since November 2006. He was Vice Chairman Investment Banking of Midland Walwyn/Merrill Lynch Canada Inc. from 1993 until his retirement in 1998. He was a Director of Glamis Gold Ltd. from April 1999 to November 2006. He has worked in the securities industry for more than 25 years, concentrating on financial services and the natural resource industries in the United States and Europe. He was Chairman of the Board of BlackRock Ventures until it was acquired by Shell Canada in 2006. As an active board member he has chaired various committees including audit, governance, and compensation. Mr. Williamson is a registered Professional Engineer and holds a Bachelor of Applied Science degree from the University of Toronto and a M.B.A. degree from the University of Western Ontario.

Mr. Moon is a former senior executive with significant international and Canadian business experience. For the past 20 years he has served on the Board of Directors, including Board Chair, on companies in a variety of industries that operated both internationally and in Canada, including Oil and Gas Exploration and Production, Electrical Generation and Distribution and Mineral Exploration and Production. Mr. Moon was Chair of Lake Shore from 2005 until it was acquired by Tahoe. Mr. Moon is very active in the charitable sector in Calgary having served on the Board of Directors of a number of organizations. He was the past Chair of the Kahanoff Centre for Charitable Activities a unique charity that owns and operates a significant office building that exclusively rents space to charitable organizations. Mr. Moon has a B.Sc. Chem. Eng. from the University of Alberta and an MBA from the University of Western Ontario. He earned his ICD.D designation in 2005.

Tahoe has not adopted specific policies and procedures for the engagement of non-audit services; however, the Audit Committee has considered whether the provision of services other than audit services is compatible with maintaining the auditors’ independence and has adopted a general policy governing the provision of these services. This policy requires the pre-approval by the Audit Committee of all audit and non-audit services provided by the external auditor, other than any de minimis non-audit services allowed by applicable law or regulation.

Pre-approval from the Audit Committee can be sought for planned engagements based on budgeted or committed fees. No further approval is required to pay pre-approved fees. Additional pre-approval is required for any increase in scope or in final fees.

88 Tahoe Resources Inc.

EXTERNAL AUDITOR AND OTHER PROFESSIONAL SERVICE FEES

The Audit Committee has reviewed the nature and amount of the audit and non-audit services provided by Deloitte LLP to ensure auditor independence. The following table sets out the aggregate fees billed in CAD$ for services performed during the years ended December 31, 2017 and 2016 for the category of fees described:

Financial Period	Audit Fees(1)(2)
Jan. 1 - Dec. 31, 2017 Jan. 1 - Dec. 31, 2016	$1.3 million $1.3 million

(1) “Audit Fees” include fees necessary to perform the annual audit and quarterly reviews of the Company’s consolidated financial statements. Audit Fees include fees for accounting consultations on matters reflected in the financial statements and other attest services required by legislation or regulation, such as comfort letters, consents, reviews of securities filings and statutory audits.

(2) Deloitte LLP did not provide any other services to the Company during the years ended December 31, 2017 and 2016.

Annual Information Form for the Year Ended December 31, 2017 89

EX-99.2

CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2017 and 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Tahoe Resources Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Tahoe Resources Inc.and subsidiaries (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2017 and December 31, 2016, the consolidated statements of operations and total comprehensive income (loss), consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended,and the related notes, including a summary of significant accounting policies and other explanatory information (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2017 and December 31, 2016, and its financial performance and its cash flows for the years then endedin accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Report on Internal Control over Financial Reporting

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 22, 2018 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error. Those standards also require that we comply with ethical requirements. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. Further, we are required to be independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada and to fulfill our other ethical responsibilities in accordance with these requirements.

An audit includes performing procedures to assess the risks of material misstatement of the financial statements, whether due to fraud or error, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies and principles used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a reasonable basis for our audit opinion.

/s/ Deloitte LLP

Chartered Professional Accountants

Vancouver, Canada

February 22, 2018

We have served as the Company's auditor since 2012.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Tahoe Resources Inc. (“the Company”) is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or caused to be designed under the supervision of, the President and Chief Executive Officer and the Vice President and Chief Financial Officer and effected by the Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. It includes those policies and procedures that:

I. pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions and dispositions of assets of the Company;

II. provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and that the Company’s receipts and expenditures are made only in accordance with authorizations of management and the Company’s directors; and

III. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements.

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

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017, based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has concluded that, as of December 31, 2017, the Company’s internal control over financial reporting was effective.

The effectiveness of the Company’s internal control over financial reporting, as of December 31, 2017, has been audited by Deloitte LLP, Independent Registered Public Accounting Firm, who also audited the Company’s consolidated financial statements as at and for the years ended December 31, 2017 and 2016, as stated in their report which appears on the preceding page.

/s/Ron Clayton	/s/Elizabeth McGregor
Ron Clayton	Elizabeth McGregor
President and Chief Executive Officer	Vice President and Chief Financial Officer
Reno, Nevada
February 22, 2018

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Tahoe Resources Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Tahoe Resources Inc.and subsidiaries (the “Company”) as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB) and Canadian generally accepted auditing standards, the consolidated financial statements as at and for the year ended December 31, 2017, of the Company and our report dated February 22, 2018, expressed an unmodified/unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

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 International Financial Reporting Standards as issued by the International Accounting Standards Board. 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 International Financial Reporting Standards as issued by the International Accounting Standards Board, 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.

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.

/s/ Deloitte LLP

Chartered Professional Accountants

Vancouver, Canada

February 22, 2018

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Expressed in thousands of United States dollars)

	Notes	December 31, 2017			December 31, 2016
ASSETS
Current
Cash and cash equivalents	7	$	125,665		$	163,368
Trade and other receivables	8	39,617			64,646
Inventories	9	128,381			126,618
Other		5,412			4,810
		299,075			359,442
Non-current
Mineral interests, plant and equipment	10	2,616,789			2,556,953
Sales tax and other receivables		47,196			36,107
Restricted cash		5,124			4,672
Deferred tax asset	20b	369			1,994
Goodwill	10a	112,085			112,085
		2,781,563			2,711,811
Total Assets		$	3,080,638		$	3,071,253
LIABILITIES
Current
Accounts payable and accrued liabilities	11	$	110,084		$	129,170
Current portion of long-term debt	12	35,000			—
Lease obligations	13	6,146			8,696
Income tax payable		2,277			10,733
Other		2,323			1,837
		155,830			150,436
Non-current
Lease obligations	13	1,608			7,250
Long-term debt	12	—			35,000
Reclamation provision	14	62,569			64,219
Deferred tax liability	20b	230,184			236,175
Other		5,559			6,019
Total Liabilities		455,750			499,099
SHAREHOLDERS’ EQUITY
Share capital	19e	2,788,234			2,775,068
Share-based payment reserve	19	20,090			18,629
Deficit		(183,436		)	(221,543		)
Total Shareholders’ Equity		2,624,888			2,572,154
Total Liabilities and Shareholders’ Equity		$	3,080,638		$	3,071,253

Commitments and Contingencies (notes 25b and 27), Subsequent events (note 29)

APPROVED BY THE DIRECTORS

“Ron Clayton”	“Dan Rovig”
Ron Clayton	Dan Rovig
PRESIDENT AND CEO	LEAD INDEPENDENT DIRECTOR

See accompanying notes to the consolidated financial statements.

Consolidated Financial Statements 1

CONSOLIDATED STATEMENTS

OF OPERATIONS AND TOTAL COMPREHENSIVE INCOME

(Expressed in thousands of United States dollars, except per share and share information)

					Years Ended
					December 31,
	Notes	2017			2016
Revenues	15,23	$	733,557		$	784,503
Operating costs
Production costs	16,23	348,146			332,721
Royalties	23	15,570			22,913
Care and maintenance	17,23	24,855			—
Depreciation and depletion	23	153,016			124,744
Total operating costs		541,587			480,378
Mine operating earnings	23	191,970			304,125
Other operating expenses
Exploration		18,522			14,350
General and administrative	18	45,788			47,507
Total other operating expenses		64,310			61,857
Earnings from operations		127,660			242,268
Other expense (income)
Interest income		(743		)	(150		)
Interest expense		3,282			3,644
Loss on debenture conversion	6	—			32,304
Foreign exchange loss		2,441			435
Other expense (income)		2,853			(2,697		)
Total other expense		7,833			33,536
Earnings before income taxes		119,827			208,732
Current income tax expense	20	42,400			70,654
Deferred income tax (recovery) expense	20	(4,366		)	20,202
Earnings and totalcomprehensive income		$	81,793		$	117,876
Earnings per share
Basic	21	$	0.26		$	0.41
Diluted	21	$	0.26		$	0.41
Weighted average sharesoutstanding
Basic	21	312,804,323			289,726,501
Diluted	21	312,833,500			289,988,046

See accompanying notes to the consolidated financial statements.

2Tahoe Resources Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of United States dollars)

					Years Ended
					December 31,
	Notes	2017			2016
OPERATING ACTIVITIES
Earnings for the year		$	81,793		$	117,876
Adjustments for:
Interest expense		3,284			3,644
Payment on extinguishment of currency swap		—			(1,939		)
Income tax expense	20	38,034			90,856
Items not involving cash:
Depreciation and depletion		152,536			128,072
Loss on disposition of plant and equipment		1,026			451
Gain on currency swap		—			(803		)
Share-based payments	19	5,483			7,224
Shares issued as transaction costs		—			5,332
Unrealized foreign exchange loss		2,218			539
Loss on debenture conversion	6	—			32,304
Accretion	14	2,640			2,370
Cash provided by operating activities  before changes in working capital		287,014			385,926
Changes in working capital	22	8,243			(67,556		)
Cash provided by operating activities		295,257			318,370
Income taxes paid		(60,993		)	(68,916		)
Net cash provided by operating activities		234,264			249,454
INVESTING ACTIVITIES
Additions to mineral interests, plant and equipment		(224,089		)	(190,885		)
Cash acquired through acquisition	6	—			70,187
Net cash used in investing activities		(224,089		)	(120,698		)
FINANCING ACTIVITIES
Proceeds from issuance of common shares on exercise of share options		914			19,790
Dividends paid to shareholders	21	(35,697		)	(67,044		)
Loan origination fees and other		(671		)	(403		)
Interest paid		(2,614		)	(2,989		)
Payments on finance leases		(9,455		)	(22,266		)
Net cash used in financing activities		(47,523		)	(72,912		)
Effect of exchange rates on cash and cash equivalents		(355		)	(1,143		)
Increase (decrease) in cash and cash equivalents		(37,703		)	54,701
Cash and cash equivalents,beginning of year		163,368			108,667
Cash and cash equivalents,end of year	7	$	125,665		$	163,368

Supplemental cash flow information (note 22)

See accompanying notes to the consolidated financial statements.

Consolidated Financial Statements 3

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of United States dollars, except share information)

	Notes	Number of Shares	Share Capital		Reserves			Deficit			Total
At January 1, 2017		311,362,031	$	2,775,068	$	18,629		$	(221,543	)	$	2,572,154
Earnings and comprehensiveincome		—	—		—			81,793			81,793
Shares issued under the Share Plan	19	290,750	3,838		(3,182		)	—			656
Shares issued on exerciseof share options	19	112,136	1,339		(425		)	—			914
Share-based payments	19	—	—		5,068			—			5,068
Dividends paid to shareholders	21	1,010,844	7,989		—			(43,686		)	(35,697		)
At December 31, 2017		312,775,761	$	2,788,234	$	20,090		$	(183,436	)	$	2,624,888
	Notes	Number of Shares	Share Capital		Reserves			Deficit			Total
At January 1, 2016		227,401,681	$	1,914,676	$	19,372		$	(270,017	)	$	1,664,031
Earnings and comprehensive loss		—	—		—			117,876			117,876
Shares issued under the Share Plan	19	244,000	3,729		(2,942		)	—			787
Shares issued as transaction costs	6	455,019	5,332		—						5,332
Shares issued on acquisition of Lake Shore Gold	6	69,239,629	676,670		8,436			—			685,106
Shares issued on conversion of Performance Share Units (“PSUs”) on acquisition of Lake Shore Gold	6	211,442	2,131		—			—			2,131
Shares issued on conversion and redemption of convertible debentures	6	10,733,675	137,997		—			—			137,997
Shares issued on exercise of share options	19	2,819,838	32,175		(12,385		)	—			19,790
Share-based payments	19	—	—		6,148			—			6,148
Dividends paid to shareholders	21	256,747	2,358		—			(69,402		)	(67,044		)
At December 31, 2016		311,362,031	$	2,775,068	$	18,629		$	(221,543	)	$	2,572,154

See accompanying notes to the consolidated financial statements.

4Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of United States dollars, except as otherwise stated)

Years ended December 31, 2017 and 2016

1. OPERATIONS

Tahoe Resources Inc. (“Tahoe”) was incorporated under the Business Corporations Act (British Columbia) on November 10, 2009. These audited annual consolidated financial statements (“consolidated financial statements”) include the accounts of Tahoe and its subsidiaries (together referred to as the “Company”). The Company’s principal business activities are the operation of mineral properties for the mining of precious metals and the exploration, development and acquisition of mineral interests in the Americas.

The Company’s registered office is located at 1500 Royal Centre, 1055 West Georgia Street, P.O. Box 11117, Vancouver, BC V6E 4N7, Canada.

The Company’s Board of Directors authorized issuance of these consolidated financial statements on February 22, 2018.

2. BASIS OF PREPARATION

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) effective as of December 31, 2017. IFRS includes IFRSs, International Accounting Standards (“IASs”), and interpretations issued by the IFRS Interpretations Committee (“IFRICs”) and the former Standing Interpretations Committee (“SICs”).

3. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of measurement

The consolidated financial statements have been prepared on an historical cost basis, except for certain financial instruments, which are measured at fair value through profit or loss (“FVTPL”), as explained in the accounting policies set out below. Additionally, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

b) Currency of presentation

The consolidated financial statements are presented in United States dollars (“USD”), which is the functional and presentation currency of the Company and all of its subsidiaries. Certain values are presented in Canadian dollars and described as CAD.

c) Basis of consolidation

The accounts of the subsidiaries controlled by the Company are included in the consolidated financial statements from the date that control commenced until the date that control ceases. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. The Company is presumed to have significant influence if it holds, directly or indirectly, 20% or more of the voting power of the investee. If the Company holds less than 20% of the voting power, other relevant factors are examined by the Company to determine whether it has significant influence.

The factors that may enable the exercise of significant influence include but are not limited to: the proportion of seats on the board of directors being assigned to the Company; the nature of the business decisions that require unanimous consent of the directors; the ability to influence the operating, strategic and financing decisions; and the existing ownership composition regarding the Company’s ability to exercise significant influence.

Consolidated Financial Statements 5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

The principal subsidiaries (operating mine sites and projects) of the Company and their geographic locations at December 31, 2017 were as follows:

Direct Parent Company	Location	Ownership Percentage	Mining Properties and Development Projects Owned
Minera San Rafael, S.A.	Guatemala	100%	El Escobal mine
La Arena S.A.	Peru	100%	La Arena mine
			La Arena II Project
Shahuindo S.A.C.	Peru	100%	Shahuindo mine
Lake Shore Gold Corp.	Canada	100%	Bell Creek mine,
		100%	Timmins West mine,
		100%	Fenn-Gib Project
Temex Resources Corp.	Canada	100%	Juby Project
		79%	Whitney Project

During the year ended December 31, 2016, the Company divested of its ownership interest in Northern Superior Resources which was acquired on April 1, 2016 as part of the Lake Shore Gold acquisition and previously accounted for using the equity method. A gain of $1,059 was recognized in the consolidated statements of operations and total comprehensive income for the year ended December 31, 2016.

Intercompany assets, liabilities, equity, income, expenses and cash flows arising from intercompany transactions are eliminated in full on consolidation.

d) Foreign currency translation

Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in foreign currencies are not re-translated. Total foreign exchange gains and losses are recognized in earnings. The unrealized portion of foreign exchange gains and losses are disclosed separately in the consolidated statements of cash flows.

e) Business Combinations

A business combination is defined as an acquisition of assets and liabilities that constitute a business. A business is an integrated set of activities and assets that consist of inputs, including non- current assets, and processes, including operational processes that, when applied to those inputs, have the ability to create outputs that provide a return to the Company and its shareholders. A business also includes those assets and liabilities that do not necessarily have all the inputs and processes required to produce outputs, but can be integrated with the inputs and processes of the Company to create outputs. When acquiring a set of activities or assets in the exploration and development stage, which may not have outputs, the Company considers other factors to determine whether the set of activities or assets is a business.

Business combinations are accounted for using the acquisition method whereby identifiable assets acquired and liabilities assumed, including contingent liabilities, are recorded at their fair values at acquisition date. The acquisition date is the date at which the Company obtains control over the acquiree, which is generally the date that consideration is transferred and the Company acquires the assets and assumes the liabilities of the acquiree. The Company considers all relevant facts and circumstances in determining the acquisition date.

The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the fair values of the assets at the acquisition date transferred by the Company, the liabilities, including contingent consideration, incurred and payable by the Company to former owners of the acquiree and the equity interests issued by the Company. The measurement date for equity interests issued by the Company is the acquisition date. Acquisition-related costs are expensed as incurred.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports in its consolidated financial statements provisional

6Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

amounts for the items for which the accounting is incomplete. During the measurement period, the Company will retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. During the measurement period, the Company will also recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period ends as soon as the Company receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable and shall not exceed one year from the acquisition date.

Non-controlling interests (“NCI”) are the equity in a subsidiary not attributable, directly or indirectly, to a parent. NCI are recorded at their proportionate share of the fair value of identifiable net assets acquired on initial recognition. Goodwill is recognized as the sum of the total consideration (acquisition date fair value) transferred by the Company, including contingent consideration and the NCI in the acquiree, less the fair value of net assets acquired.

Goodwill

Goodwill typically arises on the Company’s acquisitions due to: i) the ability of the Company to capture certain synergies through management of the acquired operation within the Company; and ii) the requirement to record a deferred tax liability for the difference between the assigned fair values and the tax bases of assets acquired and liabilities assumed.

Goodwill is not amortized. The Company performs an impairment test for goodwill annually and when events or changes in circumstances indicate that the related carrying amount may not be recoverable. If the carrying amount of a mine site or project, which is the cash-generating unit, to which goodwill has been allocated exceeds the recoverable amount, an impairment loss is recognized for the amount in excess. The impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the mine site to nil and then to the other assets of the mine site based on the relative carrying amounts of those assets. Impairment losses recognized for goodwill are not reversed in subsequent periods.

Upon disposal or abandonment of a mine site or project to which goodwill has been attributed, the carrying amount of goodwill allocated to that mine site is derecognized and included in the calculation of the gain or loss on disposal or abandonment.

f) Cash and cash equivalents and restricted cash

Cash and cash equivalents comprise cash balances and deposits with maturities of 90 days or less. Restricted cash comprises cash balances which are restricted from being immediately exchanged or used to settle a transaction and can be classified as either a current or non-current asset depending on the terms of the restriction(s).

g) Inventories

Finished goods, work-in-process, heap leach ore and stockpiled ore are measured at the lower of average cost or net realizable value. Net realizable value ("NRV") is calculated as the estimated price at the time of sale based on prevailing metal prices less estimated future costs to convert the inventories into saleable form and estimated costs to sell.

Ore extracted from the mine may be stockpiled and subsequently processed into finished goods (gold and by-products in doré or silver and by-products in concentrate form). The costs of finished goods represent the costs of work-in process inventories incurred prior to the sale of doré or concentrate. Costs are included in inventory based on current costs incurred to produce doré and concentrate, including applicable depreciation and depletion of mining interests, and removed at the cost per ounce of doré produced (gold) or cost per tonne of concentrate produced (silver and by-products).

The recovery of gold and by-products from certain oxide ore is achieved through a heap leaching process at the La Arena and Shahuindo mines. Costs are included in heap leach ore inventory based on current mining and leaching costs, including applicable depreciation and depletion of mining interests, and removed from heap leach ore inventory as ounces of gold are recovered at the average cost per recoverable ounce of gold on the leach pads. Estimates of recoverable gold on the leach pads are calculated based on the quantities of ore placed on the leach pads (measured tonnes added to the leach pads), the estimated grade of ore placed on the leach pads, and an estimated recovery percentage.

Supplies are measured at average cost. In the event that the net realizable value of the finished product is lower than the expected cost of the finished product, the supplies used in the finished product are

Consolidated Financial Statements 7

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

written down to net realizable value. Replacement costs of supplies are generally used as the best estimate of net realizable value.

h) Mineral interests, plant and equipment

Mineral interests, plant and equipment are carried at cost, less accumulated depreciation and accumulated impairment losses.

On initial acquisition, mineral interests, plant and equipment are valued at cost, being the purchase price and the directly attributable costs of acquisition or construction required to bring the asset to the location and condition necessary for the asset to be capable of operating in the manner intended by management. Land is stated at cost less any impairment in value and is not depreciated, and is included in non-depletable mineral interests. When provisions for closure and decommissioning are recognized, the corresponding cost is capitalized as part of the cost of the related assets, representing part of the cost of acquiring the future economic benefits of the operation. The capitalized cost of closure and decommissioning activities is recognized in mineral interests, plant and equipment and depreciated accordingly.

Each asset or component’s estimated useful life has due regard to both its own physical life limitations and the present assessment of economic viability of the mineral interests benefitting from its use, and to possible future variations in those assessments. Estimates of remaining useful lives and residual values are reviewed on a periodic basis. Changes in estimates are accounted for prospectively.

Borrowing costs directly relating to the financing of a qualifying project are added to the capitalized cost of those projects until such time as the assets are substantially ready for their intended use or sale which, in the case of mineral interests, is when commercial production is achieved.

Expenditure on major maintenance or repairs includes the cost of the replacement of parts of assets and overhaul costs. Where an asset or part of an asset is replaced and it is probable that future economic benefits associated with the item will be available to the Company, the expenditure is capitalized and the carrying amount of the item replaced derecognized. Similarly, overhaul costs associated with major maintenance are capitalized and depreciated over their useful lives where it is probable that future economic benefits will be available and any remaining carrying amounts of the cost of previous overhauls are derecognized. All other costs are expensed as incurred.

Operational mineral interests and mine development

When it has been determined that a mineral interest can be economically developed, the costs incurred to develop such interest are capitalized.

Major development expenditures on producing mineral interests incurred to increase production or extend the life of the mine are capitalized while ongoing mining expenditures on producing mineral interests are charged against earnings as incurred.

Costs associated with commissioning activities are capitalized until the date the Company is ready to commence commercial production.

A mine is ready to commence commercial production when it is capable of operating at levels intended by management. The main criteria management uses to assess operating levels are:

• Operational commissioning of major mine and plant components is complete;

• Operating results are being achieved consistently for a period of time;

• Indicators that these operating results will continue; and

• Other factors which can include:

◦ Significant milestones for the development of the mineral interests have been achieved;

◦ A significant portion of plant/mill/pad capacity has been achieved;

◦ A significant portion of available funding is directed towards operating activities rather than capital projects; or

◦ A pre-determined, reasonable period of time has passed.

Management may use additional criteria to determine mine-specific operating levels for commercial production.

Any revenues earned during this period are recorded as a reduction in construction capital. These costs are amortized using the units-of-production method (“UOP”) over the life of the mine, commencing on the date of commercial production.

Costs related to the acquisition of land and mineral rights are capitalized as incurred.

8Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

Assets under construction are capitalized as construction-in-progress. The cost of construction-in-progress comprises its purchase price and any costs directly attributable to bringing it into working condition for its intended use. Construction-in-progress is not depreciated. Once the asset is complete and available for use it is transferred to mineral interests, plant and equipment and depreciation commences.

Deferred Stripping

In open pit mining operations, it is necessary to remove mine waste materials or overburden to gain access to mineral ore deposits. Stripping costs incurred during the development phase of the mine (prior to commercial production) are capitalized and deferred as part of the cost of building, developing and constructing the mine (included in mineral interests) if the costs relate to anticipated future benefits and meet the definition of an asset. Once commercial production begins, the capitalized stripping costs are amortized using the units of production (“UOP”) method over the estimated life of the component to which they pertain.

During the production phase, to the extent the benefit from the stripping activity is realized in the form of inventory produced, the stripping costs are considered variable production costs and are included in the costs of the inventory during the period in which they are incurred. If the benefit from the stripping activity during the production phase provides access to deeper levels of material that will be mined in future periods, the stripping costs, including directly attributable overhead costs, are capitalized as part of mineral interests and amortized using the UOP method over the estimated life of the component to which they pertain. Stripping costs during the production phase are recognized as an asset if all the following criteria are met:

• It is possible that the future benefit, i.e. improved access to the ore body, associated with the stripping activity will flow to the entity;

• The Company can identify the component of the ore body for which access has been improved; and

• The stripping activity costs associated with the component can be measured reliably.

Stripping activity occurs on separately identifiable components of the open pit and the amount capitalized is calculated by multiplying the tonnes removed for stripping purposes from each identifiable component during the period by the mining cost per tonne. If the stripping costs cannot be attributed to a separately identifiable component, they are allocated to inventory and mineral interests based on the actual waste-to-ore ratio (“strip ratio”) of material extracted compared to the estimated strip ratio.

Depreciation of mineral interests, plant and equipment

The carrying amounts of mineral interests, plant and equipment are depreciated to their estimated residual value over the estimated useful lives of the specific assets concerned, or the estimated life of the associated mine, if shorter. Estimates of residual values and useful lives are reviewed on a periodic basis and any change in estimate is taken into account in the determination of remaining depreciation charges, and adjusted if appropriate, at each reporting period. Changes to the estimated residual values or useful lives are accounted for prospectively. Depreciation commences on the date when the asset is available for use as intended by management.

Units of production basis (“UOP”)

For mineral interests and certain mining equipment, the economic benefits from the asset are consumed in a pattern which is linked to the production level. Except as noted below, such assets are depreciated on a UOP basis. In applying the UOP method, depreciation is normally calculated using the quantity of material extracted from the mine in the period as a percentage of the total quantity of material to be extracted in current and future periods based on life-of-mine reserves and, if appropriate, a portion of the resources where it is considered highly probable that those mineral resources will be economically extracted.

Upon declaration of commercial production, the carrying amounts of mineral interests are depleted using the UOP over the estimated life of mine based on proven and probable mineral reserves and, if appropriate, the portion of mineral resources where it is considered highly probable that those mineral resources will be economically extracted. Economic extraction is considered highly probable for those mineral resources where sufficient drill data exists, geologic interpretation has been undertaken and management has included the mineral resources in the life of mine plan. The life of mine plan represents management’s best estimate of the future economic benefits expected to be obtained from the mineral properties and therefore the production levels contained in these plans may include mineral resources in each of the measured, indicated and/or inferred mineral resources category. The percentage of measured, indicated and/or inferred mineral resources to be included in the estimated recoverable

Consolidated Financial Statements 9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

ounces of a mining property and depleted using the unit-of-production method is determined on a site by site basis using the most current life of mine plan for each site and includes considerations of the following factors:

• The Company’s history of converting mineral resources to mineral reserves at its operations has ranged from 40% to 80%; the Company recognizes past performance may not be indicative of future mineral resource to mineral reserve conversion rates;

• The type of deposit(s) at each mine site; and

• The geological characteristics of the ore body and its impact to the costs related to the access of the resources.

At sites where there is a lower confidence of mineral resources or where production calculated in the life of mine models does not exceed the mineral reserves, no mineral resources are included in the estimated recoverable ounces for those sites.

If commercial production commences prior to the determination of proven and probable mineral reserves, depletion is calculated based on the mineable portion of the resource as defined in the life of mine plan.

For the years ended December 31, 2017 and 2016, all of the Company’s operating mines were depleted using the UOP method over the estimated life of mine based on proven and probable reserves and the portion of resources expected to be converted to mineral reserves (depletion at Shahuindo began May 1, 2016, the commencement of commercial production).

Straight line basis

For all other assets depreciation is recognized in earnings or loss on a straight line basis over the estimated useful lives of each part of an item (component), since this most closely reflects the expected pattern of consumption of economic benefits embodied in the asset. The estimated useful lives for assets and components that are depreciated on a straight line basis range from 2 to 20 years.

Depreciated Items	Useful Life
Computer equipment and software	2 - 5 years
Vehicles	3 - 5 years
Mining equipment	2 - 14 years
Ancillary facilities(1)	20 Years
Mineral interests and plant	UOP

⁽¹⁾  The lessor of 20 years or life of mine (“LOM”).

Impairment and Disposal

At the end of each reporting period the Company reviews whether there is any indication that the assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of the asset’s fair value less costs to sell and its value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in earnings or loss for the period. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit (“CGU”) to which the asset belongs.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in earnings or loss.

Where an item of mineral interests, plant and equipment is disposed of, it is derecognized and the difference between its carrying value and net sales proceeds is disclosed as earnings or loss on disposal in the consolidated statements of operations and total comprehensive income (loss). Any items of mineral interests, plant or equipment that cease to have future economic benefits are derecognized with any gain or loss included in the financial year in which the item is derecognized.

10Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

i) Exploration and evaluation assets

The cost of exploration and evaluation assets acquired through a business combination or an asset acquisition are capitalized, as are expenditures incurred for the acquisition of land and surface rights. All other exploration and evaluation expenditures are expensed as incurred, including those incurred before the Company has obtained the legal rights to explore an area of interest.

Capitalization of evaluation expenditures commences when the technical feasibility and commercial viability of a project has been reached and hence it is probable that future economic benefits will flow to the Company.

Capitalized exploration and evaluation costs are classified as non-depletable mineral interests within mineral interests, plant and equipment.

Corporate general and administrative costs related to exploration and evaluation assets are expensed as incurred.

j) Leases

In addition to contracts which take the legal form of a lease, other significant contracts are assessed to determine whether, in substance, they are or contain a lease, if the contractual arrangement contains the use of a specific asset and the right to use that asset. Where the Company receives substantially all the risks and rewards of ownership of the asset, these assets are capitalized at the lower of the fair value of the lease asset or the estimated present value of the minimum lease payments. The corresponding lease obligation is included within lease obligations and accretion expense is recognized over the term of the lease.

The Company will engage in sale and leaseback transactions as part of its financing strategy if and when it is deemed appropriate. Where a sale and leaseback transaction results in a finance lease, any excess of sales proceeds over the carrying amount is deferred and amortized over the lease term. Where a sale and leaseback transaction results in an operating lease, and it is clear that the transaction is established at fair value, any profit or loss is recognized immediately. If the sales price is below fair value, the shortfall is recognized in income immediately, except that, if the loss is compensated for by future lease payments at below market prices, it is deferred and amortized in proportion to the lease payments over the period for which the asset is expected to be used. If the sale price is above fair value, the excess over fair value is deferred and amortized over the period the asset is expected to be used.

Operating leases are not capitalized and payments are included in the consolidated statements of operations and total comprehensive income (loss) on a straight-line basis over the term of the lease.

k) Provision for site reclamation and closure costs

The Company recognizes a liability for site closure and reclamation costs in the period in which it is incurred for disturbance to date, if a reasonable estimate of costs can be made. The Company records the net present value of estimated future cash flows associated with site closure and reclamation as a liability when the liability is incurred and increases the carrying value of the related assets for that amount. Subsequently, these capitalized costs are amortized over the life of the related assets. At the end of each reporting period, the estimated net present value of reclamation and closure cost obligations is assessed to reflect the passage of time (accretion expense) and changes in the estimated future cash flows underlying any initial estimates.

l) Financial instruments

Financial assets and liabilities are recognized when the Company or its subsidiaries become party to the contracts that give rise to them and are classified as loans and receivables, financial instruments at FVTPL, held-to-maturity, available for sale financial assets and other liabilities, as appropriate. The Company considers whether a contract contains an embedded derivative when the entity first becomes a party to it. The embedded derivatives are separated from the host contract if the host contract is not measured at FVTPL and when the economic characteristics and risks are not closely related to those of the host contract. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.

The Company ceases to recognize financial assets when the contractual rights to the cash flows from the assets expire, or it transfers the rights to receive the contractual cash flows on the financial assets in a transaction in which substantially all the risks and rewards of ownership of the financial assets are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset.

Consolidated Financial Statements 11

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

Other financial liabilities are recognized initially at fair value net of any directly attributable transaction costs. Subsequent to initial recognition, current debt is measured at amortized cost using the effective interest method and the currency swap was measured at FVTPL.

Financial assets at fair value through profit or loss

Financial assets at FVTPL include financial assets held for trading and financial assets designated upon initial recognition as at FVTPL. A financial asset is classified in this category principally for the purpose of selling in the short term, or if so designated by management. The Company holds warrants in certain public companies; the warrants are considered derivatives and measured at fair value, with changes in fair value at each period end recorded in earnings. Transaction costs are expensed as incurred.

Available for sale financial assets

AFS financial assets are those non-derivative financial assets that are designated as such or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL. AFS financial assets are measured at fair value upon initial recognition and at each period end, with unrealized gains or losses being recognized as a separate component of equity in other comprehensive income (loss) until the investment is derecognized or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in earnings. The Company classifies its investments in certain public companies as AFS.

Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are initially recognized at the transaction value and subsequently carried at amortized cost using the effective interest method. Gains and losses are recognized in the statement of operations and comprehensive income when the loans and receivables are derecognized or impaired, as well as through the amortization process. Interest income is recognized by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Other financial liabilities

Other financial liabilities, including loans and borrowings, are recognized initially at fair value, net of transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest method. Gains and losses are recognized in earnings when the liabilities are derecognized as well as through the amortization process. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date, and are derecognized when, and only when, the Company’s obligations are discharged or they expire.

Derivative instruments

Derivative instruments, including embedded derivatives, are recorded at fair value on initial recognition and at each subsequent reporting period. Any gains or losses arising from changes in fair value on derivatives are recorded in the statement of operations and comprehensive income.

Fair values

The fair value of quoted investments is determined by reference to market prices at the close of business on the statement of financial position date. Where there is no active market, fair value is determined using valuation techniques. These include using recent arm’s length market transactions; reference to the current market value of another instrument which is substantially the same; discounted cash flow analysis; and, pricing models.

Impairment of financial assets

Financial assets, other than those recorded at FVTPL, are assessed for indicators of impairment at each period end. A financial asset is considered impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investments have been adversely impacted.

If an available for sale asset is impaired, the change in fair value is transferred to earnings in the period, including cumulative gains or losses previously recognized in other comprehensive income (loss). Reversals of impairment in respect of equity instruments classified as available for sale are not recognized in earnings but included in other comprehensive income (loss).

12Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

m) Share capital

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares are recognized as a deduction from equity, net of any tax effects.

The Company offers a dividend reinvestment plan for its common shareholders. Participation is optional and under the terms of the plan, cash dividends on common shares are used to purchase additional common shares. The common shares are issued from the Company’s treasury at a 3% discount to the average market price. The Company maintains the right to reduce or eliminate the discount at any time.

The company has suspended the active operation of its dividend reinvestment program effective August 8, 2017.

n) Revenue recognition

Revenue is recognized when the significant risks and rewards of ownership have passed to the buyer; it is probable that economic benefits associated with the transaction will flow to the Company; the sale price can be measured reliably; the Company has no significant continuing involvement; and the costs incurred or to be incurred in respect of the transaction can be measured reliably. In circumstances where title is retained to protect the financial security interests of the Company, revenue is recognized when the significant risks and rewards of ownership have passed to the buyer.

Revenues and trade receivables on concentrate sales are subject to adjustment upon final settlement of metal prices, weights, and assays as of a date that is typically a few months after the shipment date. The Company records adjustments to concentrate revenues and trade receivables monthly based on quoted forward prices for the expected settlement period. Adjustments for weights and assays are recorded when results are determinable or on final settlement. A portion of trade receivables are therefore measured at FVTPL and changes in value are recorded in revenues. Treatment and refining charges are netted against revenues from metal concentrate sales.

Revenues and trade receivables on doré sales are recorded at the time the refined metal is transferred to the customer’s account.

Until a mine is operating at the level intended by management, revenues will be offset against mineral interests, plant and equipment costs.

o) Share-based payments

Share-based compensation arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions. If the fair value of the goods or services received cannot be estimated reliably, the share-based payment transaction is measured at the fair value of the equity instruments granted at the date the Company receives the goods or the services.

The fair value of share-based compensation on the grant date to key management personnel and employees is recognized as an expense, with a corresponding increase in equity, over the period that the optionee becomes unconditionally entitled to the options. The amount recognized as an expense is adjusted to reflect the actual number of share options for which the related service and vesting conditions are met.

The amount payable in respect of share appreciation rights ("SARs"), which are settled in cash, is recognized as an expense with a corresponding increase in liabilities over the period that the rights are exercisable. The liability is measured at each reporting date using the Black-Scholes option pricing model and is recorded at fair value.

p) Income taxes

Income tax on the earnings or loss for the years presented comprises current and deferred tax. Income tax is recognized in earnings or loss in the statements of operations except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax expense is the expected tax payable on the taxable income for the period, using tax rates substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for temporary differences which arise on the

Consolidated Financial Statements 13

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting, nor taxable earnings or loss. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet reporting date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable earnings will be available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent it is no longer probable that the related tax benefit will be realized.

q) Earnings (loss) per share

The Company presents basic and diluted earnings (loss) per share (“EPS”) data for its common shares. Basic EPS is calculated by dividing earnings (loss) attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year.

Diluted EPS is determined by adjusting the earnings (loss) attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares.

r) Other comprehensive income (loss)

Other comprehensive income (loss) is the change in the Company’s net assets that results from transactions, events and circumstances from sources other than the Company’s shareholders and includes items that are not included in net earnings such as unrealized gains and losses on financial assets classified as AFS, net of income taxes and gains or losses on certain derivative instruments.

s) Employee benefits

The Company has defined contribution pension plans which cover certain of the Company’s employees. Under the provisions of the plans, the Company contributes a fixed percentage of the employees’ salaries to the pension plans. The employees are able to direct the contributions into a variety of investment funds offered by the plans. Pension costs associated with the Company’s required contributions under the plans are recognized as an expense when the employees have rendered service entitling them to the contribution and are charged to earnings or loss, or capitalized to mining interests for employees directly involved in the specific projects. The Company has no further legal or constructive obligation once the contributions have been paid.

t) Investments in associates

The Company’s investments in associates are accounted for using the equity method of accounting. Under the equity method, the Company’s investment in an associate is initially recognized at cost and subsequently increased or decreased to recognize the Company's share of earnings and losses of the associate and for impairment losses after the initial recognition date. The Company’s share of an associate’s losses that are in excess of its investment in the associate are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. The Company's share of earnings and losses of associates are recognized in earnings during the period.

After application of the equity method, the Company determines whether it is necessary to recognize an impairment loss on the Company’s investment in an associate. The Company determines at each statement of financial position date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount in earnings. When a group entity transacts with an associate of the Company, profits and losses are eliminated to the extent of the Company’s interest in the relevant associate.

u) Care and Maintenance costs

Under certain circumstances the Company’s operations may be placed on Care and Maintenance status. During such times costs associated with maintaining the mine will be aggregated and reflected on the statement of operations in a separate line. These costs will be reported separately from production costs and will include all necessary costs to sustain the operations during these periods.

14Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

4. CHANGES IN ACCOUNTING POLICIES AND STANDARDS

a) Application of new or amended accounting standards effective January 1, 2017

New or amended standards adopted in the Company’s consolidated financial statements.

The Company has adopted the following new or amended IFRS standards for annual periods beginning on or after January 1, 2017. The Company has determined there to be no material impact on the consolidated financial statements upon adoption:

IAS 7 – Statement of Cash Flows; and

• IAS 12 – Income Taxes.

b) Future accounting standards and interpretations

A number of new IFRS standards, and amendments to standards and interpretations, are not yet effective for the year ended December 31, 2017, and have not been applied in preparing these consolidated financial statements.

The Company has evaluated or is currently evaluating the impact the following standards are expected to have on its consolidated financial statements:

i. New or amended standards effective January 1, 2018 and thereafter.

• IFRS 9 – Financial Instruments;

• IFRS 15 – Revenue from Contracts with Customers; and

• IFRS 16 – Leases.

In July 2014, the IASB issued the final version of IFRS 9 “Financial Instruments” (“IFRS 9”), which replaces IAS 39 “Financial Instruments: Recognition and Measurement” (“IAS 39”). IFRS 9 is effective for annual periods beginning on or after January 1, 2018.

IFRS 9 provides a revised model for classification and measurement of financial assets, including a new “expected credit loss” impairment model. The revised model for classifying financial assets results in classification according to their contractual cash flow characteristics and the business models under which they are held. IFRS 9 introduces a reformed approach to hedge accounting. IFRS 9 also largely retains the existing requirements in IAS 39 for the classification of financial liabilities.

The Company will adopt IFRS 9 for the annual period beginning January 1, 2018 on a retrospective basis, using certain available transitional provisions.

The Company has completed its assessment of the impact of IFRS 9 and does not expect the new standard to have a material impact on the consolidated financial statements.

In May 2014, the IASB issued IFRS 15 “Revenue from Contracts with Customers” (“IFRS 15”). IFRS 15 replaces IAS 11 “Construction Contracts”, IAS 18 “Revenue”, IFRIC 13 “Customer Loyalty Programmes”, IFRIC 15 “Agreements for the Construction of Real Estate”, IFRIC 18 “Transfer of Assets from Customers” and SIC 31 “Revenue - Barter Transactions Involving Advertising Services”, and is effective for annual periods beginning on or after January 1, 2018.

The standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract‐based five‐step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized.

The Company will adopt IFRS 15 for the annual period beginning January 1, 2018 using the modified retrospective approach. Under this approach, the Company will recognize transitional adjustments in retained earnings on the date of adoption

Consolidated Financial Statements 15

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

(January 1, 2018), without restating the comparative financial statements on a retrospective basis.

The Company has completed its assessment of the impact of IFRS 15 and does not expect the new standard to have a material impact on the consolidated financial statements and there is no material impact at January 1, 2018.

IFRS 16 was issued by the IASB on January 13, 2016, and will replace IAS 17, Leases. The new Standard will bring most leases on-balance sheet for lessees under a single model, eliminating the distinction between operating and finance leases. Lessor accounting however, remains largely unchanged and the distinction between operating and finance leases is retained. IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019. Earlier application is permitted if IFRS 15, Revenue from Contracts with Customers, has been applied. The Company is currently evaluating the impact of IFRS 16 on its consolidated financial statements.

5. CRITICAL JUDGMENTS AND ESTIMATES IN APPLYING ACCOUNTING POLICIES

The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments and estimates that affect the application of accounting policies and the reported amounts of assets, liabilities, contingent liabilities, income and expenses. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and applied prospectively.

a) Judgments

i. Commercial Production

In order to declare commercial production, a mine must be able to operate at levels intended by management. Prior to commercial production costs incurred are capitalized as part of the cost of placing the asset into service and proceeds from the sale of concentrates and doré are offset against the costs capitalized. Subsequent to the declaration of commercial production depletion of the costs incurred begins. Management considers several criteria in determining when a mine is operating at levels intended, and is therefore in commercial production.

ii. Functional Currency

The functional currency for each of the Company and its subsidiaries is the currency of the primary economic environment in which the entity operates. The Company has determined that for each subsidiary the functional currency is the United States dollar. When determining the functional currency certain judgments may be involved to assess the primary economic environment in which the entity operates. If there is a change in events or conditions which determined the primary economic environment, the Company reevaluates the functional currency for each of the subsidiary impacted.

iii. Economic recoverability and probability of future economic benefits of exploration, evaluation and development costs.

The Company makes determinations whether development and related costs incurred which have been capitalized are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits including geological and metallurgical information, economic assessments and existing permits for the life of mine plan. The estimates contained within these criteria could change over time which could affect the economic recoverability of capitalized costs.

b) Estimates

i. Revenue recognition

As is customary in the industry, revenue on provisionally priced concentrate sales is recognized based on relevant forward market prices. At each reporting period, provisionally priced concentrate sales are marked to market based on the estimated forward price for the quotational period stipulated in the contract. The adjustment to provisionally priced metal sold is included in concentrate revenue.

ii. Estimated material in the Mineral Reserves

16Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

The figures for Mineral Reserves and Mineral Resources are determined in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), issued by the Canadian Securities Administrators. NI 43-101 articulates the standards of disclosure for mineral projects including rules relating to the determination of Mineral Reserves and Mineral Resources. Management assesses the estimated Mineral Reserves and Mineral Resources used in the calculation of depletion at least annually, or whenever facts and circumstances warrant that an assessment should be made. Changes to estimates of Mineral Reserves and Mineral Resources and depletable costs including changes resulting from revisions to the Company's mine plans and changes in metal price forecasts can result in a change in future depletion rates.

Where commercial production has commenced but proven and probable reserves have yet to be established, the carrying amounts of the Company’s depletable mineral interests are depleted based on the mineable portion of measured and indicated resources.

iii. Determination of Useful Lives

Plant and equipment other than mineral interests are depreciated using the straight-line method based on the specific asset’s useful life. Should the actual useful life of the plant or equipment vary from the initial estimation, future depreciation charges may change. Should the componentization of these like assets change, depreciation charges may vary materially in the future.

iv. Impairment charges

At the end of each reporting period, the Company assesses whether any indication of impairment exists. Where an indicator of impairment exists, an impairment analysis is performed. The impairment analysis requires the use of estimates and assumptions including amongst others, long-term commodity prices, discount rates, length of mine life, future production levels, future operating costs, future capital expenditures and tax positions taken. The estimates and assumptions are subject to risk and uncertainty; hence, there is the possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the individual assets or CGUs. In such circumstances, some or all of the carrying value of the assets or CGUs may be further impaired or the impairment charge reduced with the impact recorded in the consolidated statements of operations and comprehensive income (loss).

v. Reclamation provision and site closure costs

The Company’s accounting policy for the recognition of accrued site closure costs requires significant estimates and assumptions such as the requirements of the relevant environmental, legal and regulatory framework, the magnitude of possible disturbance and the timing, extent and costs of required closure and rehabilitation activity. Changes to these estimates and assumptions may result in future actual expenditures differing from the amounts currently provided for. The decommissioning liability is periodically reviewed and updated prospectively based on the available facts and circumstances.

vi. Income taxes

The Company is periodically required to estimate the tax basis of assets and liabilities. Where applicable tax laws and regulations are either unclear or subject to varying interpretations, it is possible that changes in these estimates could occur that materially affect the amounts of deferred income tax assets and liabilities recorded in the financial statements. Changes in deferred tax assets and liabilities generally have a direct impact on earnings in the period of changes. Each period, the Company evaluates the likelihood of whether some portion or all of each deferred tax asset will not be realized. This evaluation is based on historic and future expected levels of taxable income, the pattern and timing of reversals of taxable temporary timing differences that give rise to deferred tax liabilities, and tax planning initiatives. Levels of future taxable income are affected by, among other things, the market price for saleable metals, production costs, interest rates and foreign currency exchange rates.

vii. Valuation of inventory

All inventory is valued at the lower of average cost or net realizable value. Management is required to make various estimates and assumptions to determine the value of stockpiled ore, concentrate inventories, ore stacked on leach pads and ore in process. The estimates and assumptions include surveyed quantities of stockpiled ore, in-process volumes, contained metal content, recoverable metal content, costs to recover saleable metals, payable metal values

Consolidated Financial Statements 17

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

once processed and the corresponding metals prices. Changes in these estimates can result in changes to the carrying amounts of inventories and mine operating costs of future periods.

viii. Deferred stripping costs

Stripping costs incurred during the production phase of a mineral property that relate to reserves and resources that will be mined in a future period are capitalized. The Company makes estimates of the stripping activity over the life of the component of reserves and resources which will be made accessible. Changes in estimated strip ratios can result in a change to the future capitalization of stripping costs incurred.

ix. Share-based compensation

The Company makes certain estimates and assumptions when calculating the fair values of share-based compensation granted. The significant estimations and assumptions include expected volatility, expected life, expected dividend yield and expected risk-free rate of return. Changes in these assumptions may result in a material change to the expense recorded for the issuance of share-based compensation.

x. Business combinations

The information necessary to measure the fair values as at the acquisition date of assets acquired and liabilities assumed requires management to make certain judgments and estimates about future events, including but not limited to:

• Estimates of mineral reserves, mineral resources and exploration potential acquired;

• Future operating costs and capital expenditures;

• Discount rates to determine fair value of assets acquired; and

• Future metal prices and long-term foreign exchange rates.

Changes to the preliminary measurements of assets and liabilities acquired may be retrospectively adjusted when new information is obtained until the final measurements are determined within one year of the acquisition date.

xi. Contingencies

Due to the size, complexity and nature of the Company’s operations, various legal and tax matters arise in the ordinary course of business. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated.

There are no matters at December 31, 2017 that are expected to have a material effect on the consolidated financial statements of the Company.

6. BUSINESS COMBINATION

a) Acquisition of 100% interest in Lake Shore Gold Corp. ("Lake Shore Gold")

i. Terms of the business combination

On April 1, 2016 (the “Acquisition Date”), the Company completed the previously announced acquisition of Lake Shore Gold pursuant to a statutory plan of arrangement (the “Arrangement”). The Arrangement was approved by shareholders of the Company and the shareholders of Lake Shore Gold on March 31, 2016 and received final court approval on April 1, 2016.

The Arrangement was completed pursuant to the terms of a definitive arrangement agreement dated February 8, 2016 between the Company and Lake Shore Gold (the “Arrangement Agreement”). Pursuant to the terms of the Arrangement Agreement, Lake Shore Gold became a wholly-owned subsidiary of the Company on April 1, 2016 and all of the issued and outstanding common shares of Lake Shore Gold (each a “Lake Shore Gold Share”) were transferred to the Company in consideration for the issuance by the Company of 0.1467 of a common share for each Lake Shore Gold Share (each whole common share a “Tahoe Share”).

In connection with the closing of the Arrangement, the Company issued an aggregate of 69,239,629 Tahoe Shares to the former shareholders of Lake Shore Gold. The Company authorized the issuance of up to an additional 1,621,877 Tahoe Shares issuable upon the exercise of former stock options to acquire Lake Shore Gold Shares.

18Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

Total consideration paid was based on the April 1, 2016 opening price of Tahoe Shares on the Toronto Stock Exchange (“TSX”) of CAD$12.75 and a CAD to USD foreign exchange rate of 0.7665, and is comprised of the following:

	Shares Issued/Issuable	Consideration
Fair value estimate of the Tahoe share consideration	69,239,629	$	676,670
Fair value estimate of the consideration for options(1)	1,621,877	8,436
Total consideration	70,861,506	$	685,106

⁽¹⁾  The fair value of the options was determined using the Black-Scholes option pricing model. Where applicable, the inputs and ranges used in the measurement of the fair value (CAD) of the options were as follows:

Share price (CAD) at April 1, 2016	$	12.75
Exercise price (CAD)	2.79-25.97
Expected volatility	48.41%-62.60%
Expected life (years)	0.04-4.67
Expected dividend yield	2.46		%
Risk-free interest rate	0.54%-0.62%
Fair value (CAD)	0.01-9.65
April 1, 2016 CAD to USD exchange rate	$	0.77
Fair value (USD)	0.01-7.40

This acquisition has been accounted for as a business combination with Tahoe as the acquirer. The allocation of the purchase price has been finalized. Management determined the fair values of identifiable assets and liabilities, measured the associated deferred income tax assets and liabilities, and determined the value of goodwill.

The final allocation of the purchase price is as follows:

Cash and cash equivalents	$	70,187
Trade and other receivables	4,930
Inventories	13,774
Other current and non-current assets	3,876
Property, plant and equipment	174,747
Mineral interests and exploration potential	615,939
Goodwill(1)	54,617
Accounts payable, accrued liabilities and other(2)	(45,246		)
Lease obligation	(16,589		)
Reclamation provision	(3,721		)
Convertible debentures	(105,693		)
Deferred tax liability	(81,715		)
Total net assets acquired	$	685,106

⁽¹⁾  Goodwill of $54,617 was recognized due to the deferred tax liability generated on the business combination. The total amount of goodwill that is expected to be deductible for tax purposes is $nil.

⁽²⁾  Accounts payable, accrued liabilities and other includes a liability of $2,131 relating to PSUs which were outstanding and not converted prior to the acquisition on April 1, 2016. The PSUs were converted into 211,442 commons shares of the Company during the year ended December 31, 2016.

Lake Shore Gold’s principal mining properties are its 100% owned Bell Creek and Timmins West gold mines (together the “Timmins mines”) located in northeastern Ontario, Canada (note 23). Total transaction costs incurred relating to the acquisition and included in general and administrative expenses for the year ended December 31, 2016 are $11,134. Included in these transaction costs are 455,019 common shares of the Company issued with a value of $5,332.

Consolidated Financial Statements 19

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

The acquisition supports the Company’s growth strategy by adding high-quality assets which will increase the sustainable production level, contribute to cash flow and diversify the Company’s operations.

ii. Convertible debentures

Lake Shore Gold had outstanding a class of 6.25% convertible unsecured debentures (the “Debentures”), which were governed by an indenture dated September 7, 2012, as supplemented effective April 1, 2016. On April 1, 2016, as a result of the completion of Tahoe’s acquisition of Lake Shore Gold, Lake Shore Gold gave notice of its offer to purchase in exchange for Tahoe Shares, all of its outstanding Debentures at 100% of the principal amount plus accrued and unpaid interest (the “Change of Control Offer”).

Concurrently with the Change of Control Offer, Lake Shore Gold gave notice of its election to redeem the Debentures on May 16, 2016 at a price equal to their principal amount plus accrued and unpaid interest. The Company elected to satisfy its obligation to repay the principal amount of the Debentures by issuing Tahoe Shares to the holders of the Debentures. The number of Tahoe Shares to be issued was determined by dividing the aggregate principal amount of the outstanding Debentures redeemed by 95% of the volume weighted average trading price of Tahoe Shares on the TSX for the 20 trading days ended on and including May 9, 2016.

Debentureholders maintained the right to convert the Debentures at any time prior to May 13, 2016 at a conversion price of CAD$9.5433 per Tahoe Share, being a conversion rate of 104.7856 Tahoe Shares per $1,000 principal amount of the Debentures. An aggregate of 10,611,411 Tahoe Shares were issued pursuant to the exercise of conversion rights available to the debentureholders. The Debentures remaining outstanding after voluntary conversions were redeemed by Lake Shore Gold on May 16, 2016 for an aggregate of 122,264 Tahoe Shares, and the Debentures were delisted from trading on the Toronto Stock Exchange at the close of business that day. As a result of the redemption of the remaining debentures during the year ended December 31, 2016, the Company recognized a non-cash loss of $32,304 reflecting the appreciation of Tahoe’s share price between the closing price on April 1, 2016 and completion of the redemption on May 16, 2016.

7. CASH AND CASH EQUIVALENTS

	December 31, 2017		December 31, 2016
Cash	$	125,134	$	162,841
Cash equivalents(1)	531		527
	$	125,665	$	163,368

⁽¹⁾ Marketable securities with short-term maturities of less than 90 days

8. TRADE AND OTHER RECEIVABLES

	December 31, 2017		December 31, 2016
Trade receivables	$	—	$	18,997
Sales tax receivable	28,138		42,844
Income tax receivable	10,005		1,419
Other	1,474		1,386
	$	39,617	$	64,646

20Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

9. INVENTORIES

	December 31, 2017		December 31, 2016
Supplies	$	57,195	$	56,612
Stockpile	23,029		16,940
Work in process	21,129		27,649
Finished goods	27,028		25,417
	$	128,381	$	126,618

The cost of inventories recognized as an expense for the year ended December 31, 2017 was $501,682 (year ended December 31, 2016: $457,465) and is included in total operating costs. No NRV adjustments or write-downs were taken in 2017.

10. MINERAL INTERESTS

	Mineral Interests
	Depletable			Non- Depletable(4)			Plant & Equipment			Total
Cost
Balance at January 1, 2017	$	1,524,323		$	637,644		$	899,513		$	3,061,480
Additions	47,952			43,184			141,011			232,147
Disposals	—			—			(8,204		)	(8,204		)
Transfers(1)	13,013			(13,402		)	389			—
Change in reclamationprovision	(3,347		)	1,437			—			(1,910		)
Balance at December 31, 2017	$	1,581,941		$	668,863		$	1,032,709		$	3,283,513
Accumulated depreciation anddepletion
Balance at January 1, 2017	$	(365,248	)	$	—		$	(139,279	)	$	(504,527	)
Additions(2)	(116,796		)	(2,049		)	(50,491		)	(169,336		)
Disposals	—			—			7,139			7,139
Transfers	—			—			—			—
Balance at December 31, 2017	$	(482,044	)	$	(2,049	)	$	(182,631	)	$	(666,724	)
Carrying amount atDecember 31, 2017	$	1,099,897		$	666,814		$	850,078		$	2,616,789

Consolidated Financial Statements 21

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

	Mineral Interests
	Depletable			Non- Depletable(4)			Plant & Equipment			Total
Cost
Balance at January 1, 2016	$	714,011		$	737,108		$	595,377		$	2,046,496
Acquired mineral interests(3)(4)	278,489			337,450			174,747			790,686
Additions	69,178			7,128			134,802			211,108
Disposals	—			—			(5,413		)	(5,413		)
Transfers	444,042			(444,042		)	—			—
Change in reclamation provision	18,603			—			—			18,603
Balance at December 31, 2016	$	1,524,323		$	637,644		$	899,513		$	3,061,480
Accumulated depreciation and depletion
Balance at January 1, 2016	$	(169,160	)	$	(121,000	)	$	(81,824	)	$	(371,984	)
Additions	(75,088		)	—			(61,933		)	(137,021		)
Disposals	—			—			4,478			4,478
Transfers (5)	(121,000		)	121,000			—			—
Balance at December 31, 2016	$	(365,248	)	$	—		$	(139,279	)	$	(504,527	)
Carrying amount at December 31, 2016	$	1,159,075		$	637,644		$	760,234		$	2,556,953

⁽¹⁾  The resource statements published in January 2017 reflect an increase to the depletable base at the Timmins West mine of 72,904 ounces. These ounces were transferred from non-depletable to depletable mineral interests.

⁽²⁾  The resource statements published in January 2017 reflect a decrease to the in-situ ounces at the Timmins West mine which resulted in an impact of $2,049 to non-depletable mineral interests.

⁽³⁾  Acquired mineral interests relate to the acquisition of Lake Shore Gold on April 1, 2016.

⁽⁴⁾  Non-depletable mineral interests acquired as part of the acquisition of Lake Shore Gold on April 1, 2016 include the Whitney, Fenn-Gib and Juby projects, and other exploration potential.

⁽⁵⁾  Upon declaration of commercial production on May 1, 2016, the carrying value of mineral interests and the impairment associated with the Shahuindo mine included in non-depletable mineral interests were transferred to depletable mineral interests. All pre-operating revenues from production at Shahuindo were credited against construction capital through April 30, 2016.

A summary by segment of the carrying amount of mineral interests is as follows:

	Mineral Interests
	Depletable		Non- Depletable(2)		Plant & Equipment		December 31, 2017		December 31, 2016
Escobal	$	486,592	$	27,267	$	262,506	$	776,365	$	785,888
La Arena	10,443		216,910		205,824		433,177		451,551
Shahuindo	295,513		58,587		173,725		527,825		482,685
Timmins mines(1)	307,349		364,050		208,023		879,422		836,829
	$	1,099,897	$	666,814	$	850,078	$	2,616,789	$	2,556,953

⁽¹⁾  The Timmins mines were acquired on April 1, 2016 as part of the Lake Shore Gold acquisition.

⁽²⁾  Non-depletable mineral interests include exploration and evaluation projects. Non-depletable mineral interests for La Arena include the book value of the La Arena II project.

As at December 31, 2017, the Company has $10,157 (December 31, 2016: $4,206) in capitalized stripping costs relating to production phase stripping of the La Arena and Shahuindo mines.

a) Goodwill

Goodwill typically arises on the Company’s business combinations due to: i) the ability of the Company to capture certain synergies through management of the acquired operation within the Company; and ii) the requirement to record a deferred tax liability for the difference between the assigned fair values and the tax bases of assets acquired and liabilities assumed.

22Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

The carrying amount of goodwill has been allocated to the following cash generating units (“CGUs”) and is included in the respective operating segment assets:

	La Arena II(1)		Timmins Exploration Potential(2)		Total
January 1, 2016	$	57,468	$	—	$	57,468
Additions	—		54,617		54,617
December 31, 2016	$	57,468	$	54,617	$	112,085
Additions	—		—		—
December 31, 2017	$	57,468	$	54,617	$	112,085

⁽¹⁾  The La Arena II CGU (previously "La Arena Sulphides") is included in the La Arena operating segment as non-depletable mineral interests.

⁽²⁾  The allocation of goodwill associated with the acquisition of Lake Shore Gold was allocated 100% to the Timmins Exploration Potential CGU which is included in the Timmins mines operating segment as non-depletable mineral interests.

b) Impairment

The Company assesses indicators of impairment or reversal of impairment on a quarterly and annual (at October 1) basis for all CGUs and tests those CGUs for which indicators exist. Goodwill is tested at least annually or when there are indicators of impairment. The purpose of the impairment testing is to determine if the recoverable amount (fair value less costs of disposal (“FVLCD”)) of a CGU is greater than its carrying value.

The Company identified six CGUs for which indicators of impairment were assessed: Escobal, La Arena oxides, La Arena II (previously La Arena sulfides), Shahuindo, Timmins mines and the Timmins Exploration Potential. In the current year, goodwill was tested at La Arena II and Timmins Exploration Potential, and there were impairment indicators at the Escobal mine as it was on care and maintenance. No impairment was recognized in 2017 as a result of our analysis. Discounted cash flow models were prepared using long-term prices for gold of $1,307/oz, silver of $19.54/oz and copper of $3.30/lb (2016: $1,250/oz, silver price - $17.50/oz and copper price $3.00/lb), discount rates between 7.0% and 8.00% (2016: 6.50% and 8.75%) depending on the development stage of the operation or project. In-situ values were used for the impairment testing of exploration potential. Based on the results, for the year ended December 31, 2017, management concluded that there was no impairment or reversal of prior impairment for any of the CGUs.

11. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	December 31, 2017		December 31, 2016
Trade payables	$	49,487	$	70,315
Accrued trade and other payables	25,685		22,976
Royalties	16,000		15,044
Accrued payroll and related benefits	18,912		20,835
	$	110,084	$	129,170

12. DEBT

	2017		2016
Beginning balance at January 1	$	35,000	$	35,000
Borrowings/additions	—		35,000
Repayments	—		(35,000		)
Ending balance at December 31	$	35,000	$	35,000

The Company’s debt facilities contain covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional debt, merge, consolidate, transfer, lease or otherwise dispose of all or substantially all of its assets to any other entity.

Consolidated Financial Statements 23

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

a) Credit facility

On April 8, 2016, the Company signed a credit agreement with an international bank for a credit facility (the “Facility”) for an aggregate amount of $35 million. The Facility bears interest at LIBOR plus 2.25% on the portion drawn. The LIBOR rate was reset on October 10, 2017. The Facility has a two-year term, maturing April 9, 2018.

On April 8, 2016, proceeds from the Facility were used to repay the $35 million Loan which was acquired as part of the acquisition of Rio Alto on April 1, 2015. The Company is currently in compliance with all covenants associated with the Facility.

b) Revolving credit facility

On July 18, 2017, the Company entered into an Amended and Restated Credit Agreement (“Revolving Facility”) with a syndicate of lenders to increase its revolving credit facility from $150 million to $300 million with a US$50 million accordion feature and to extend the term to July 19, 2021. The Company paid an initial commitment fee to amend the Revolving Facility of $1.7 million. The Agreement includes terms that limit borrowing to a maximum of $75 million during the suspension of the mining license at Escobal as a result of the CALAS claim.

Based on certain financial ratios, the Revolving Facility bears interest on the portion drawn, on a sliding scale of LIBOR plus between 2.15% to 3.13% or a base rate plus 1.13% to 2.13% which is based on the Company’s consolidated net leverage ratio.

The credit facility is secured by the assets of the Company and its subsidiaries: Escobal Resources Holding Limited, Minera San Rafael, S.A., Tahoe Resources ULC, Lake Shore Gold Corp., Mexican Silver Mines Limited, La Arena S.A., Shahuindo SAC and Shahuindo Exploraciones.  Additionally, the credit facility contains covenants that, among other things, limit the ability of the Company and its subsidiaries to incur additional debt, merge, consolidate, transfer, lease or otherwise dispose of all or substantially all of its assets to any other person. Proceeds may be used for liquidity and general corporate purposes.

Standby fees for the undrawn portion of the facility are also on a similar sliding scale basis of between 0.56% and 0.81% and were $963 thousand for the year ended December 31, 2017 (year ended December 31, 2016: $886). The Revolving Facility matures on July 19, 2021.

As at December 31, 2017, the Company had not drawn on the Revolving Facility. The Company is currently in compliance with all covenants associated with the Revolving Facility. See note 29 Subsequent Events .

13.    LEASE OBLIGATIONS

	2017			2016
Beginning balance at January 1	$	15,946		$	13,862
Additions(1)	—			24,531
Payments(2)	(9,456		)	(22,468		)
Accrued interest	451			559
Foreign exchange gain (loss)	813			(538		)
Ending balance at December 31	$	7,754		$	15,946

⁽¹⁾  2016 additions include $16,589 related to finance leases acquired as a result of the Lake Shore Gold business combination on April 1, 2016 and $7,942 in other additions.

⁽²⁾  2016 Payments include $10,420 for the retirement of the La Ramada sale-leaseback.

	December 31, 2017		December 31, 2016
Current portion	$	6,146	$	8,696
Non-current portion	1,608		7,250
	$	7,754	$	15,946

As part of the acquisition of Lake Shore Gold on April 1, 2016, the Company acquired finance lease obligations related to equipment and vehicles, expiring between 2016 and 2018 with interest rates between 0.9% and 6.9%. The Company has the option to purchase the equipment and vehicles leased at the end of the terms of the

24Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

leases for a nominal amount. The Company’s obligations under the finance leases are secured by the lessor’s title to the leased assets. The fair value of the finance lease liabilities approximates their carrying amount.

14. RECLAMATION PROVISION

	2017			2016
Beginning balance at January 1	$	64,219		$	39,524
Additions to reclamation provision(1)	—			3,722
Accretion expense	2,640			2,370
Revisions in estimates and obligations	(3,803		)	18,603
Ending balance at December 31(2)	$	63,056		$	64,219

⁽¹⁾  2016 additions relate to the Timmins mines acquired as a result of the Lake Shore Gold acquisition on April 1, 2016.

⁽²⁾  Ending balance includes $487 of current and $62,569 of long-term reclamation.

The Company’s environmental permits require that it reclaim any land it disturbs during mine development, construction and operations. Although the timing and the amount of the actual expenditures are uncertain, the Company has estimated the undiscounted cash flows related to the future reclamation obligations arising from its activities to December 31, 2017 to be $93,338 (December 31, 2016: $99,273).

In determining the discount rate to be used in the calculation of the present value of the future reclamation obligations, the Company combines risk and inflation rates specific to the country in which the reclamation will take place.

The present value of the combined future obligation has decreased by $3,803 during the year ended December 31, 2017 (December 31, 2016: $18,603 increase) as a result of the impact of the change in estimates in mine life, estimated reclamation costs, discount and inflation rates.

a)Escobal

The present value of the future reclamation obligation assumes a discount rate of 6.18% (December 31, 2016: 6.12%), an inflation rate of 4.12% (December 31, 2016: 4.25%), an undiscounted amount to settle the obligation of $10,306 (December 31, 2016: $10,960), and the commencement of reclamation activities in approximately 16 years.

b)La Arena

The present value of the future reclamation obligation assumes a discount rate of 3.89% (December 31, 2016: 4.18%), an inflation rate of 2.61% (December 31, 2016: 3.22%), an undiscounted amount to settle the obligation of $43,737 (December 31, 2016: $45,885), and the commencement of post-closure reclamation activities in approximately 5 years.

At December 31, 2017, the Company had a letter of credit (“LOC”) outstanding in the amount of $12,531 as partial guarantee of the La Arena closure obligations as required by the Ministry of Energy and Mines (“MEM”). The LOC was valid for one year with a renewal date of January 12, 2018. On January 3, 2018 the Company posted a renewed LOC under the same terms and totaling $13,297.

c)Shahuindo

The present value of the future reclamation obligation assumes a discount rate of 4.03% (December 31, 2016: 4.51%), an inflation rate of 2.61% (December 31, 2016: 3.22%), an undiscounted amount to settle the obligation of $22,742 (December 31, 2016: $32,124), and the commencement of post-closure reclamation activities in approximately 7 years.

At December 31, 2017, the Company had a LOC outstanding in the amount of $5.2 as partial guarantee of the Shahuindo closure obligations as required by MEM. The LOC was valid for one year with a renewal date of January 12, 2018. On January 3, 2018 the Company posted a renewed LOC under the same terms and totaling $10,390.

d)Timmins mines

The present value of the future reclamation obligation assumes a discount rate of 2.06% (December 31, 2016: 4.85%), an inflation rate of 1.31% (December 31, 2016: 1.29%), an undiscounted amount to settle the obligation of $16,242 (December 31, 2016: $10,304), and the commencement of post-closure reclamation activities in approximately 9 years.

Consolidated Financial Statements 25

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

At December 31, 2017, the Company had a bond outstanding in the amount of $9,495 as partial guarantee of the Timmins mines closure obligations as required by the Ministry of Northern Development and Mines.

15. REVENUES

			Years Ended December 31,
	2017		2016
Silver	$	170,529	$	316,793
Gold	542,702		437,464
Lead	7,274		9,738
Zinc	13,052		20,508
	$	733,557	$	784,503

a) Concentrate revenues

The Company has contracts with a number of customers for its concentrate sales. For the year ended December 31, 2017, the Company’s top four concentrate customers account for 98% of concentrate revenues (year ended December 31, 2016: top four customers accounted for 99% of concentrate revenues).

The concentrate revenues by customer for the years ended December 31, 2017 and 2016 are as follows:

			Years Ended December 31,
	2017		2016
Customer 1	18	%	34	%
Customer 2	40	%	24	%
Customer 3	13	%	23	%
Customer 4	27	%	18	%
Other customers	2	%	1	%
Total concentrate revenues	100	%	100	%

b) Doré revenues

The Company has contracts with customers for its doré sales. The Company’s top two doré customers account for 69% of doré revenues for the year ended December 31, 2017 (year ended December 31, 2016: 92% of doré revenues). For the year ended December 31, 2017, doré sales comprised 99% of total gold sales (year ended December 31, 2016: 98%). The doré revenues by customer for the years ended December 31, 2017 and 2016 as follows:

			Years Ended December 31,
	2017		2016
Customer 1	43	%	60	%
Customer 2	26	%	32	%
Other customers	31	%	8	%
Total doré revenues	100	%	100	%

The Company has determined that the loss of any single customer or curtailment of purchases by any one customer would not have a material adverse effect on the Company’s financial performance, financial condition and cash flows due to the nature of the refined metals market.

26Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

16. PRODUCTION COSTS

			Years Ended December 31,
	2017		2016
Raw materials and consumables	$	130,185	$	163,304
Salaries and benefits	90,583		85,349
Contractors and outside services	102,064		100,557
Other expenses	19,808		1,717
Changes in inventory	5,506		(18,206		)
	$	348,146	$	332,721

17. CARE AND MAINTENANCE COSTS

			Years Ended December 31,
	2017		2016
Raw materials and consumables	$	4,094	$	—
Salaries and benefits	11,499		—
Contractors and outside services	8,115		—
Other expenses	1,147		—
	$	24,855	$	—

18. GENERAL AND ADMINISRATIVE EXPENSES

				Years Ended December 31,
	Notes	2017		2016
Salaries and benefits		$	18,318	$	12,934
Share-based payments	19	5,657		7,224
Consulting and professional fees		9,028		8,340
Transaction costs	6	—		11,134
Administrative and other		12,785		7,875
		$	45,788	$	47,507

19. SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION

The Company’s equity compensation plans are designed to attract and retain individuals and to reward them for current and expected future performance. The Company’s share-based compensation arrangements are denominated in CAD and include Tahoe Share Plan Options, the Rio Alto replacement options issued on April 1, 2015 upon completion of the acquisition of Rio Alto and the Lake Shore Gold replacement options issued on April 1, 2016 upon completion of the acquisition of Lake Shore Gold (collectively, the “Share Options”), as well as Deferred Share Awards (“DSAs”), Restricted Share Awards (“RSAs”) and Share Appreciation Rights (“SARs”) (collectively with the Share Options, referred to as the “Share Plan”).

At December 31, 2017, the Company has the following share-based payment arrangements:

a) Share Options

The Share Plan entitles key management personnel, senior employees, and consultants to the option to purchase shares in the Company. Under the terms of this program, Share Options are exercisable at the market close price of the Company’s shares on the day prior to the grant date. The Share Options vest based on vesting terms set by the Compensation Committee of the Board of Directors. The Share Options vest in three equal tranches with the first tranche vesting on the first anniversary, the second on the second anniversary, and the third on the third anniversary of the grant date.

Consolidated Financial Statements 27

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

The number and weighted average exercise price in CAD of Share Options outstanding at December 31, 2017 and December 31, 2016 are as follows:

	Weighted average exercise price		Number of Share Options
Outstanding at January 1, 2016	$	14.92	4,068,457
Granted(1)	9.29		2,972,876
Exercised	9.13		(2,819,838	)
Forfeited	13.82		(335,000	)
Expired	16.57		(674,750	)
Outstanding at December 31, 2016	14.55		3,211,745
Granted	9.91		1,407,000
Exercised	10.82		(112,136	)
Forfeited	13.68		(307,000	)
Expired	17.37		(332,584	)
Outstanding at December 31, 2017	$	12.79	3,867,025

⁽¹⁾  Includes the replacement options granted on April 1, 2016 as a result of the acquisition of Lake Shore Gold (note 6).

The following table summarizes information about Share Options outstanding and exercisable at December 31, 2017 (exercise range and prices in CAD):

Exercise price range	Outstanding	Weighted average exercise price		Weighted average remaining life (years)	Exercisable	Weighted average exercise price		Weighted average remaining life (years)
$   2.80-9.67	235,970	$	7.68	2.15	163,970	$	7.99	1.06
$ 9.68-10.59	1,143,000	$	10.00	4.20	—	$	—	—
$ 10.60-12.56	1,001,000	$	12.35	3.22	326,333	$	12.38	3.19
$ 12.57-15.74	896,055	$	15.17	2.32	592,055	$	15.13	2.22
$ 15.75-23.37	591,000	$	17.37	0.78	520,000	$	17.10	0.41
	3,867,025	$	12.79	2.86	1,602,358	$	14.48	1.71

During the year ended December 31, 2017, the Company recorded $2,863 of compensation expense relating to Share Options in general and administrative expenses (year ended December 31, 2016: $3,120).

b) DSAs and RSAs

The Share Plan permits DSAs and RSAs (collectively referred to as “Share Awards”) to be issued to key management personnel and senior employees. Upon vesting, shares in the Company are issued at no exercise price. Compensation cost for DSAs and RSAs is measured based on the closing price of the stock one day prior to the grant date.

i. DSAs

The DSAs vest based on service-related vesting terms set by the Compensation Committee of the Board of Directors and can therefore vary grant to grant. In general, however, DSAs vest in three equal tranches with the first tranche vesting on the first anniversary, the second on the second anniversary, and the third on the third anniversary of the grant date (the “general DSA vesting terms”).

The number of DSAs outstanding at December 31, 2017 and December 31, 2016 is as follows:

28Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

Outstanding at January 1, 2016	350,000
Granted	342,000
Shares issued	(184,000	)
Cancelled/forfeited	(45,000	)
Outstanding at December 31, 2016	463,000
Granted	195,000
Shares issued	(215,000	)
Cancelled/forfeited	(26,000	)
Outstanding at December 31, 2017	417,000

During the year ended December 31, 2017, the Company recorded $2,138 of compensation expense relating to DSAs in general and administrative expenses (year ended December 31, 2016: $2,909).

ii. RSAs

The RSAs vest immediately on the grant date and are issued at that time. Consequently, there are no RSAs outstanding at December 31, 2017 and December 31, 2016.

The Company granted 75,750 RSAs during the year ended December 31, 2017 for total compensation expense of $655 (year ended December 31, 2016: 60,000 RSAs granted for total compensation expense of $787) which was recorded in general and administrative expenses.

c) SARs

The Company grants SARs to employees that entitle the employees to a cash settlement. The amount of the cash settlement is determined based on the difference between the strike price and the closing share price of the Company on the exercise date. The SARs have a term of five years from the award date and vest in five equal tranches with the first tranche vesting immediately, the second on the first anniversary, the third on the second anniversary, the fourth on the third anniversary, and the fifth on the fourth anniversary of the grant date. Prior to the cash settlement, unvested and vested SARs are valued using the Black-Scholes Model.

The number of SARs outstanding and exercisable at December 31, 2017 and December 31, 2016 is as follows:

	Number of SARs
Outstanding at January 1, 2016	43,000
Issued	135,000
Exercised	(23,000	)
Expired/forfeited	(1,000	)
Outstanding at December 31, 2016	154,000
Issued	—
Exercised	(2,000	)
Expired/forfeited	(26,500	)
Outstanding at December 31, 2017	125,500
Exercisable at December 31, 2016	12,000
Exercisable at December 31, 2017	—

As at December 31, 2017, vested SARs had a weighted average intrinsic value of CAD$(9.88) per share (December 31, 2016: CAD$(4.08) per share) and the Company has recognized other current and non-current liabilities for SARs of $32 and $44, respectively (December 31, 2016: $165 and $101, respectively).

During the year ended December 31, 2017, the Company recorded $(174) of compensation expense relating to SARs in general and administrative expenses (year ended December 31, 2016: $408).

Consolidated Financial Statements 29

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

The following table summarizes information about SARs outstanding and exercisable at December 31, 2017 (grant price range in CAD):

Grant price range	Issued	Exercised/Cancelled		Outstanding	Exercisable
$6.40-12.87	407,000	(301,500	)	105,500	—
$13.35-16.57	60,000	(60,000	)	—	—
$18.00-23.31	107,500	(84,500	)	20,000	—
	574,500	(446,000	)	125,500	—

d) Input for measurement of fair values

The grant date fair values (CAD) of Share Options and SARs and the re-measurement fair value of SARs are measured based on the Black-Scholes Model and are denominated in CAD.

i. Share Options

There were 1,407,000 Share Options granted during the year ended December 31, 2017 (December 31, 2016: 2,972,876 including 1,621,877 replacement options related to the Lake Shore Gold acquisition).

The weighted average inputs used and grant date fair values (CAD) of Share Options granted during the years ended December 31, 2017 and 2016 are as follows:

	Years Ended December 31,
	2017			2016
Share price	$	9.64		$	13.21
Exercise price	$	9.91		$	9.51
Expected volatility(1)	51		%	51		%
Expected life (years)	3.50			3.00
Expected dividend yield	3.14		%	2.42		%
Risk-free interest rate	1.07		%	0.57		%
Pre-vest forfeiture rate	7.13		%	4.12		%
Fair value	$	2.89		$	5.76

⁽¹⁾  The expected volatility assumption is based on the historical volatility of the Company’s Canadian dollar common shares on the Toronto Stock Exchange.

ii. SARs

There were nil SARs granted during the year ended December 31, 2017 (year ended December 31, 2016: 135,000).

The fair value of SARs (CAD) has been re-measured at December 31, 2017. Expected volatility, interest rate and share price have been updated with changes in the fair value being recognized in earnings or loss during the period.

The weighted average inputs used and grant date fair values (CAD) of SARs granted during the years ended December 31, 2017 and 2016 are as follows:

	Years Ended December 31,
	2017			2016
Share price	$	—		$	12.64
Exercise price	$	—		$	12.38
Expected volatility	—		%	52		%
Expected life (years)	—			5.00
Risk-free interest rate	—		%	0.61		%
Fair value	$	—		$	5.74

30Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

The weighted average inputs used and re-measurement date fair values (CAD) of SARs as at December 31, 2017 and 2016 are as follows:

	December 31,			December 31,
	2017			2016
Share price	$	6.03		$	12.65
Exercise price	$	14.12		$	14.05
Expected volatility	55		%	50		%
Expected life (years)	2.92			3.80
Risk-free interest rate	1.81		%	1.02		%
Fair value	$	0.99		$	4.60

e) Authorized share capital

The Company’s authorized share structure is as follows:

• Unlimited number of authorized common shares without par value;

• Common shares are without special rights or restrictions attached;

• Common shares have voting rights; and

• Common shareholders are entitled to receive dividend payments.

• Common shareholders are entitled to elect to reinvest their dividend payments through the Company’s dividend reinvestment program.

At December 31, 2017, there were 312,775,761 common shares of the Company issued and outstanding (December 31, 2016: 311,362,031).

20. INCOME TAX EXPENSE

				Years Ended December 31,
	2017			2016
Current income tax expense
Current period	$	42,455		$	69,832
Prior period	(55		)	822
	42,400			70,654
Deferred tax expense (benefit)
Origination and reversal of temporary differences	(4,366		)	20,202
Income tax expense	$	38,034		$	90,856

Consolidated Financial Statements 31

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

a) Income tax reconciliation

The reconciliation of income taxes at statutory rates with the reported taxes is as follows:

	Years Ended December 31,
	2017			2016
Earnings (loss) before income taxes	$	119,828		$	208,732
Statutory tax rate	26.00		%	26.00		%
Income tax expense (benefit)	31,155			54,270
Reconciling items:
Difference between statutory and foreign tax rates	2,978			9,127
Non-deductible share-based payments	1,843			2,741
Impact of foreign exchange on deferred income tax assets and liabilities	(4,589		)	(3,080		)
Non-deductible expenses	6,312			22,363
Change in unrecognized deferred tax assets	(219		)	(2,758		)
Other	554			8,193
Income tax expense (benefit)	$	38,034		$	90,856

Effective October 23, 2017, the British Columbia provincial tax rate increased from 11% to 12%, effective January 1, 2018. The overall increase in tax rates in 2018 will result in an increase in the Company's statutory tax rate from 26% to 27% in 2018 and o

b) Deferred tax assets and liabilities

At December 31, 2017 and 2016, the Company’s significant components of deferred income tax assets and deferred tax liabilities were as follows:

	December 31, 2017			December 31, 2016
Deferred income tax assets
Unused non-capital losses	$	38,140		$	39,704
Inventories and receivables	369			1,994
Reclamation and closure cost obligations	12,917			13,019
Other	8,438			22,648
	$	59,864		$	77,365
Deferred income tax liabilities
Mining interests	(286,214		)	(310,028		)
Inventories and receivables	(3,465		)	(1,518		)
	(289,679		)	(311,546		)
Net deferred income tax liabilities	$	(229,815	)	$	(234,181	)

The Company believes that it is probable that the results of future operations will generate sufficient revenue to realize the deferred income tax assets.

The Company’s deferred tax liability of $230,184 at December 31, 2017 is primarily the result of the acquisition of Lake Shore Gold during 2016 and the acquisition of Rio Alto during 2015 (December 31, 2016: $236,175). At December 31, 2017 and 2016, $369 and $1,994 of deferred tax assets relating to inventories and receivables are not netted against the deferred tax liability.

32Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

	December 31, 2017		December 31, 2016
Net deferred income tax liabilities	$	229,815	$	234,181
Deferred tax assets related to inventories and receivables	369		1,994
Deferred income tax liabilities	$	230,184	$	236,175

c) Tax losses and tax credits

As at December 31, 2017, the Company had $271,928 of tax losses (December 31, 2016: $270,730) for which $142,175 (December 31, 2016: $147,891) have been recognized as deferred tax assets. The Company recognizes the benefit of tax losses only to the extent of anticipated future taxable income in relevant jurisdictions. The gross amount of tax losses carried forward will begin to expire in 2018.

Deductible temporary differences for which no deferred tax assets have been recognized at December 31, 2017 and 2016 are as follows:

	December 31, 2017		December 31, 2016
Tax losses and tax credits	$	147,427	$	140,695
Deductible temporary differences
Cumulative eligible capital	568		611
Financing costs	803		1,937
Unrealized capital losses	—		325
Reclamation and closure cost obligations	23,585		26,409
Deductible temporary difference	$	172,383	$	169,977

21. EARNING (LOSS) PER SHARE

	Year Ended December 31, 2017					Year Ended December 31, 2016
	Earnings		Weighted average shares outstanding	Earnings per share		Loss		Weighted average shares outstanding	Loss per share
Basic EPS(1)	$	81,793	312,804,323	$	0.26	$	117,876	289,726,501	$	0.41
Dilutive
securities:
Share options	—		29,177	—		—		261,545	—
Diluted EPS	$	81,793	312,833,500	$	0.26	$	117,876	289,988,046	$	0.41

⁽¹⁾  The weighted average shares outstanding used in the basic earnings per share calculation includes the dilutive impact of 417,000 DSAs (year ended December 31, 2016: 463,000 DSAs).

At December 31, 2017, 3,867,025 Shares Options and 417,000 DSAs were outstanding of which 3,653,081 and nil, respectively for the year ended December 31, 2017 were anti-dilutive (year ended December 31, 2016: 3,211,745 Share Options and 463,000 DSAs outstanding, of which 1,638,828 and nil, respectively were anti-dilutive) because the underlying exercise prices exceeded the average market price for the year ended December 31, 2017 of CAD$9.00 (year ended December 31, 2016: CAD$15.46).

During the year ended December 31, 2017, the Company declared and paid to its shareholders dividends of $0.02 per common share per month up to August 8, 2017, for total dividends of $43,686 (year ended December 31, 2016: $69,402), including $7,989 (2016: $2,358) which were paid as share-based dividends.

As a result of shareholder enrollment in the Dividend Reinvestment Plan during the year ended December 31, 2017, $7,989 was reinvested for a total issuance of 1,010,844 common shares of the Company.

Consolidated Financial Statements 33

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

22. SUPPLEMENTAL CASH FLOW INFORMATION

				Years Ended December 31,
	2017			2016
Trade and other receivables	$	33,302		$	(16,482	)
Inventories	5,722			(38,024		)
Other current assets	(535		)	1,474
Other non-current assets	(11,541		)	2,619
Accounts payable and accrued liabilities, and other non-current liabilities	(18,705		)	(17,143		)
Changes in working capital	$	8,243		$	(67,556	)

23. SEGMENTED INFORMATION

All of the Company’s operations are within the mining sector. The Company produces silver, gold, lead and zinc from mines located in Guatemala, Peru and Canada. Due to the geographic and political diversity of the countries in which the Company operates, each operating segment is responsible for achieving specified business results within a framework of global corporate policies and standards. Regional management in each country provides support to the operating segments, including but not limited to financial, human resources, and exploration assistance. Each operating segment has a budgeting process which it uses to measure the results of operation and exploration activities.

The operating, exploration and financial results of individual operating segments are reviewed by the Company’s executive management. As a group, the executive management of the Company is considered to be the chief operating decision maker (“CODM”) in order to make decisions about the allocation of resources and to assess their performance. The CODM determined that for review, an operating segment must be one whose principal business activities are the operation of mineral properties for the mining of precious metals and the exploration, development and acquisition of mineral interests.

Revenues generated from the sale of silver in concentrate are from the Company’s Escobal mine in Guatemala. Revenues generated from the sale of gold in doré are generated at the La Arena and Shahuindo mines in Peru and the Timmins mines in Canada. Mineral interests, plant and equipment are situated in Guatemala, Peru and Canada.

Significant information relating to the Company’s operating segments as at and for the year ended December 31, 2017 is summarized as follows:

			December 31, 2017(1)
	Escobal(2)		La Arena		Shahuindo			Timmins  mines			Total
Mineral interests and plantand equipment	$	776,364	$	433,178	$	527,826		$	879,421		$	2,616,789
Goodwill	—		57,468		—			54,617			$	112,085
Total assets	906,434		573,566		621,985			978,653			$	3,080,638
Total liabilities(3)	$	81,208	$	160,979	$	(539,512	)	$	(158,425	)	$	(455,750	)

			Year Ended December 31, 2017
	Escobal		La Arena		Shahuindo		Timmins mines		Total
Revenues	$	192,510	$	233,782	$	95,425	$	211,840	$	733,557
Production costs	61,934		126,376		53,861		105,975		$	348,146
Royalties	10,521		—		—		5,049		$	15,570
Care and Maintenance(4)	24,855		—		—		—		$	24,855
Depreciation anddepletion(5)	32,858		48,092		11,452		60,614		$	153,016
Mine operating earnings	62,342		59,314		30,112		40,202		191,970
Capital expenditures	$	22,901	$	32,019	$	69,352	$	98,775	$	223,047

34Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

⁽¹⁾  Balances presented are before intercompany transaction eliminations not included in segmented disclosure.

⁽²⁾  Escobal segment includes corporate and other

⁽³⁾  Includes intercompany payables and receivables to reconcile to the total liabilities on the statement of financial position

⁽⁴⁾  Due to the suspension of mining operations following the suspension of the Escobal mining license in the beginning of the third quarter care and maintenance costs, which comprise the cost of maintaining the Escobal mine and include environmental costs, salaries and legal fees have been incurred.

⁽⁵⁾  The depreciation and depletion expense for La Arena and Shahuindo mines includes a true-up of $11.3 million related to prior years.

Significant information relating to the Company’s reportable operating segments as at and for the year ended December 31, 2016 is summarized as follows:

				December 31, 2016(1)(2)(3)
	Escobal			La Arena		Shahuindo		Timmins mines		Total
Mineral interests and plant and equipment	$	785,888		$	451,551	$	482,685	$	836,829	$	2,556,953
Goodwill	—			57,468		—		54,617		$	112,085
Total assets(4)	963,824			611,344		547,153		948,932		$	3,071,253
Total liabilities(4)(5)	$	(27,225	)	$	71,490	$	319,432	$	135,402	$	499,099

			Year Ended December 31, 2016(1)(2)(3)
	Escobal		La Arena		Shahuindo		Timmins mines		Total
Revenues	$	355,812	$	244,397	$	47,174	$	137,120	$	784,503
Production costs	128,552		115,229		25,118		63,822		$	332,721
Royalties	18,741		—		—		4,172		$	22,913
Depreciation and depletion	53,204		27,779		10,016		33,745		$	124,744
Mine operating earnings	155,315		101,389		12,040		35,381		$	304,125
Capital expenditures(3)	$	30,077	$	35,366	$	63,893	$	81,772	$	211,108

⁽¹⁾  The Timmins mines were acquired on April 1, 2016 as part of the Lake Shore Gold acquisition. Results of operations are not included prior to April 1, 2016.

⁽²⁾  Shahuindo declared commercial production effective May 1, 2016. All pre-operating revenues from production at Shahuindo have been credited against construction capital through April 30, 2016.

⁽³⁾  Capital expenditures in the Timmins mines segment includes the acquisition of the 2% net smelter return (“NSR”) royalty related to production at the Bell Creek mine for $13,676.

⁽⁴⁾  Balances presented are before intercompany transaction eliminations not included in segmented disclosure.

⁽⁵⁾  Includes intercompany payables and receivables to reconcile to the total liabilities on the statement of financial position

24. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, trade and other receivables, other financial assets, accounts payable and accrued liabilities, debt and lease obligations, and are categorized as follows:

• Cash and cash equivalents, restricted cash, trade and other receivables, and other financial assets are classified as loans and receivables and are measured at amortized cost;

• Trade and other receivables, which are subject to provisional pricing adjustments, investments and currency swaps are measured at FVTPL; and

• Accounts payable and accrued liabilities, debt and lease obligations are classified as other financial liabilities.

Fair value (“FV”) estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The analysis of financial instruments that are measured subsequent to initial recognition at fair value can be categorized into Levels 1 through 3 based upon the degree to which the inputs used in the fair value measurement are observable.

Level 1 – inputs to the valuation methodology are quoted (adjusted) for identical assets or liabilities in active markets.

Consolidated Financial Statements 35

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

Level 2 – inputs to valuation methodology include quoted market prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

At December 31, 2017 and 2016, the levels in the FV hierarchy into which the Company’s financial assets and liabilities are measured and recognized on the statement of financial position at fair value are categorized as follows:

	December 31, 2017						December 31, 2016
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Investments(1)	$	320	$	—	$	—	$	39	$	—	$	—
Provisionally priced trade receivables	—		—				—		18,997
Total	$	320	$	—	$	—	$	39	$	18,997	$	—

⁽¹⁾  Investments are included in other current assets.

The carrying value of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, debt and lease obligations approximate their fair value given the short term to maturity.

There were no transfers between Level 1 and Level 2 during the year ended December 31, 2017.

25. FINANCIAL RISK MANAGEMENT

The Company has exposure to certain risks resulting from its use of financial instruments. These risks include credit risk, liquidity risk and market risk.

a) Credit Risk

Credit risk is the risk that the counterparty to a financial instrument will cause a loss for the Company by failing to meet its obligations. Credit risk for the Company is primarily related to trade and other receivables, sales tax receivable and cash and cash equivalents.

The Company manages the credit risk associated with trade and other receivables by selling to organizations with strong credit ratings and/or by requiring substantial provisional pricing at the date of shipping its products. The history of defaults by these organizations to other entities has been negligible and the Company considers its risk in trade receivables to be negligible as well.

Receivables other than trade receivables are primarily sales tax receivables from the governments of Guatemala, Peru and Canada. The Company has a history of consistent collection of the sale tax receivable and therefore considers its risk to be negligible.

The Company manages the credit risk associated with cash and cash equivalents by investing these funds with highly rated financial institutions, and as such, the Company deems the credit risk on cash and cash equivalents to be low.

b) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, to the extent possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. To further mitigate this risk, the Company has the Revolving Facility in place in the amount of $300 million (note 12c).

The Company’s significant undiscounted commitments at December 31, 2017 are as follows:

36Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

							December 31, 2017		December 31, 2016
	1 year		2-5 years		5+ years		Total		Total
Accounts payable and accrued liabilities	$	110,084	$	—	$	—	$	110,084	$	129,170
Debt	35,000		—		—		35,000		35,000
Income tax payable	2,277		—		—		2,277		10,733
Lease and contractual agreements	23,087		3,261		210		26,558		15,946
Commitments(1)	70,513		418		—		70,931		123,481
Other non-current liabilities	2,780		2,779		—		5,559		24,917
Reclamation provision	717		19,261		73,360		93,338		99,273
	$	244,458	$	25,719	$	73,570	$	343,747	$	438,520

⁽¹⁾  Commitments to purchase equipment, services, materials and supplies.

During the year ended December 31, 2017, the Company generated cash flows from operating activities, one of the Company’s main sources of liquidity, of $243,053 (year ended December 31, 2016: $249,454). The Company held cash and cash equivalents of $125,665 and had working capital of $143.245 (December 31, 2016: $163,368 and $209,006 in cash and cash equivalents and working capital, respectively). The Company defines working capital as current assets less current liabilities.

The Company determined that the working capital, combined with future cash flows from operations and the available Revolving Facility are sufficient to support the Company’s commitments and deems liquidity risk to be minimal.

c) Market Risk

The market risk of the Company is composed of three main risks: foreign exchange risk, interest rate risk, and price risk.

i. Foreign Exchange Risk

The Company is exposed to foreign exchange or currency risk on balances that are denominated in a currency other than the USD. These include cash and cash equivalents, sales tax receivable, accounts payable and accrued liabilities and taxes payable.

To minimize currency risk, substantially all of the Company’s cash is denominated in USD and is kept in highly liquid instruments such as commercial paper and time deposits.

Cash and cash equivalents held in foreign currencies, denominated in USD, are as follows:

	December 31, 2017		December 31, 2016
Guatemalan quetzal	$	1,011	$	564
Peruvian sol	4,232		3,579
Canadian dollar	1,971		20,386
Other	—		82
	$	7,214	$	24,611

Exchange rate fluctuations may also affect the costs that the Company incurs in its operations. The Company’s goods and services are contracted in USD, CAD, Guatemalan quetzals and Peruvian soles. The appreciation of these currencies against the USD can increase the production costs the Company incurs while the depreciation of these currencies against the USD can decrease the production costs the Company incurs.

In addition, the Company is exposed to currency risk through non-monetary assets and liabilities of subsidiaries whose taxable profit or tax loss are denominated in foreign currencies. Changes in exchange rates give rise to temporary differences resulting in a deferred tax liability or asset with the resulting deferred tax charged or credited to income tax expense. At December 31, 2017, the Company had $230,184 of deferred income tax liabilities, which arose primarily from the acquisitions of Rio Alto in 2015 and Lake Shore Gold in 2016. Based on the Company’s

Consolidated Financial Statements 37

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

foreign exchange exposure on deferred tax liabilities at December 31, 2017, a 10% appreciation or depreciation in foreign exchange rates against the USD would have resulted in anapproximate $16,395 non-cash increase or decrease in the Company’s earnings.

The Company recognized a foreign exchange loss of $2,441 for the year ended December 31, 2017 (year ended December 31, 2016: $435). Based on the Company’s net exposure at December 31, 2017, a 10% appreciation or depreciation in foreign exchange rates against the USD would have resulted in an approximate $6,728 increase or decrease in the Company’s earnings.

At December 31, 2017, the Company has determined the exposure to currency risk to be at an acceptable level.

ii. Interest Rate Risk

Interest rate risk is the risk that the Company’s future cash flows and fair values will fluctuate as a result of changes in market interest rates. At December 31, 2017, the Company’s interest- bearing financial instruments are related to cash equivalents, the Facility, the Revolving Facility and finance leases. The weighted average interest rate paid by the Company during the year ended December 31, 2017 related to debt facilities was 3.50% (year ended December 31, 2016: 2.95%). No amounts were drawn on the Revolving Facility and therefore only standby fees were applicable for the year ended December 31, 2017 (note 12c).

At December 31, 2017, the Company has determined the interest rate risk to be low and that a 10% increase or decrease in market interest rates would result in a nominal increase or decrease to the Company’s earnings.

iii. Price Risk

Price risk is the risk that the fair value of the Company’s financial instruments will fluctuate due to changes in market prices.

The Company has determined that price risk due to fluctuations in metals prices is at an acceptable level and has not entered into any hedging contracts.

The costs associated with production, development, construction and exploration activities of the Company are also subject to price risk as it relates to certain consumables including diesel fuel and power. The Company deems its exposure to price risk related to fuel prices to be at an acceptable level has not entered into any hedging contracts.

At December 31, 2017, the Company has determined exposure to price risk to be at an acceptable level.

26. CAPITAL MANAGEMENT

The Company’s strategy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to support future development of the business. The Company seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.

The capital structure of the Company consists of common equity, comprising share capital and reserves net of accumulated deficit, and debt, which includes the Facility and finance leases.

	Notes	December 31, 2017			December 31, 2016
Shareholders’ equity		$	2,624,888		$	2,572,154
Debt	12	35,000			35,000
Lease obligations	13	7,754			15,946
		2,667,642			2,623,100
Cash and cash equivalents	7	(125,665		)	(163,368		)
Restricted cash		(5,124		)	(4,672		)
		$	2,536,853		$	2,455,060

The Company’s overall capital management strategy remains unchanged from the year ended December 31, 2016.

38Tahoe Resources Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (expressed in 000’s of USD, except as otherwise stated)

27. CONTINGENCIES

Due to the complexity and nature of the Company’s operations, various legal, tax, and regulatory matters are outstanding from time to time. In the event that management’s estimate of the future resolution of these matters changes, the Company will recognize the effects of the changes in its consolidated financial statements on the date such changes occur.

On July 7, 2017, the Company learned that three purported class action lawsuits were filed against Tahoe, and certain of its current and former officers and directors under Section 10(b) and Section 20(a) of the US Securities Exchange Act of 1934, as amended (the "US Exchange Act"), and Rule 10b-5, thereunder.  The lawsuits were filed in three different federal courts and all generally allege that the Company made untrue statements of material facts or omitted to state material facts or engaged in acts that operated as a fraud upon the purchasers of the Company's stock. The lawsuits were filed following the issuance of the provisional decision by the Guatemalan Supreme Court to suspend the mining license at Escobal. The suits allege compensatory damages, interest, fees and costs. The Company expects the cases to be transferred to one court so that they can be consolidated and a lead plaintiff can be appointed to represent the purported class members. The Company is disputing the allegations raised and will vigorously defend the lawsuits, the outcome of which is not determinable at this time.

28. RELATED PARTIES

a) Related party transactions

During the year ended December 31, 2017, the Company’s related parties included its subsidiaries, key management personnel and Directors.

b) Key management personnel compensation

Key management includes those personnel having the authority and responsibility for planning, directing, and controlling the Company. In addition to their salaries, key management personnel, including the Board of Directors, Officers and senior management, receive bonuses and also participate in the Company’s Share Plan (note 18).

Key management personnel compensation included in corporate and general administrative expenses is as follows:

	Years Ended
	December 31,
	2017		2016
Short-term employee benefits(1)	$	8,804	$	8,870
Share-based payments	5,163		5,948
	$	13,967	$	14,818

⁽¹⁾  Short-term employee benefits include salaries, bonuses and other annual employee benefits paid during the year.

29. SUBSEQUENT EVENTS

On February 20, 2018, the Company announced the closing of its revised revolving credit facility with its bank syndicate. The Company now has access to a $175 million revolving credit facility which includes a $25 million accordion feature, for total access of $200 million in capital. The revised facility matures on July 19, 2021. This facility is structured on the strength of Tahoe’s gold business alone, and access to the facility does not rely on the operation of Escobal.   Scotiabank and HSBC are the co-leads for the facility, with Scotiabank acting as the administrative agent. The facility bears interest on a sliding scale of LIBOR plus between 2.25% to 3.25% or a base rate plus 1.25% to 2.25%, which is determined based upon the Company's consolidated net leverage ratio. Standby fees for the undrawn portion of the facility are also on a similar sliding scale basis of between 0.5063% and 0.7313%.   

On February 20, 2018 the $35.0 million credit facility was repaid using cash from operations as a condition of closing the Second Amended and Restated Credit Facility.

Consolidated Financial Statements 39

EX-99.3

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the years ended December 31, 2017 and 2016

Dated February 22, 2018

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

This Management’s Discussion & Analysis (“MD&A”) of Tahoe Resources Inc. (“Tahoe”) and its subsidiaries (together referred to as the “Company”) has been prepared to enable a reader to assess material changes in financial condition and results of operations as at and for the years ended December 31, 2017 and 2016. The following discussion of performance, financial condition and future prospects should be read in conjunction with the audited consolidated financial statements for the years ended December 31, 2017 and 2016 (“consolidated financial statements”), prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). The information provided herein supplements, but does not form part of, the consolidated financial statements and includes financial and operational information from the Company’s wholly owned subsidiaries. This MD&A contains forward looking information that is subject to risk factors set out in the cautionary note herein. This discussion also covers the three months Ended December 31, 2017 and 2016 (“Q4 2017” and “Q4 2016”, respectively), the twelve months endedDecember 31, 2017 and 2016 (“2017” and “2016”) and the subsequent period up to the date of this MD&A. Dollar amounts are stated in millions of United States dollars (“USD”), the Company’s functional currency, except where otherwise noted. Tabular amounts are presented in thousands of USD, except where otherwise noted. Information for this MD&A is prepared as at February 22, 2018.

BUSINESS OVERVIEW

Tahoe is a Canadian public company involved in mine operations and mineral exploration and development. Tahoe’s common shares are listed on the Toronto Stock Exchange (“TSX”) under the symbol “THO” and on the New York Stock Exchange (“NYSE”) under the symbol “TAHO”. Tahoe is a reporting issuer in each of the provinces and territories of Canada. Additional information relating to the Company, including a copy of this MD&A, may be obtained or viewed from the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com, on the Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) at www.sec.gov, and on the Company’s website at www.tahoeresources.com.

Tahoe was incorporated under the Business Corporations Act (British Columbia) on November 10, 2009. The Company’s principal business activities are the exploration, development, operation and acquisition of mineral properties for the mining of precious metals in the Americas. Currently, the Company’s business involves profitably operating the La Arena and Shahuindo mines, gold mining operations located in northwestern Peru, and the Bell Creek mine and mill and the Timmins West mine (together, the “Timmins mines”), gold mining operations located in northeastern Ontario, Canada. Additional business objectives include the expansion of gold production at the Shahuindo and Bell Creek mines, project development and ongoing exploration programs in Peru and Canada. The Escobal mine, a silver mining operation located in southeastern Guatemala, had profitable operations for the year although operations are currently suspended. (See 2017 Highlights section of this MD&A)

All of the Company’s operations are within the mining sector. The Company produces silver, gold, lead and zinc from mines located in Guatemala, Peru and Canada. Due to the geographic and political diversity of the countries in which the Company operates, each operating segment is responsible for achieving specified business results within a framework of corporate policies and international standards. Regional management in each country provides support to the operating segments, including but not limited to financial, human resources, and exploration assistance. Each operating segment has a budgeting process which it uses to measure the results of operation and exploration activities. The Company’s executive management reviews these results to make decisions about resources to be allocated to each segment and assess the performance of each. The corporate office in Reno, Nevada provides support to the operations and exploration activities with respect to financial, legal, technical and human resources. Operating the mines profitably will require that the Company consistently meet production targets and effectively manage costs. In Guatemala profitable mine operation also requires renewal of the export credential, favorable resolution of the appeals to the Guatemalan Constitutional Court contesting the reinstatement of the Escobal mining license to enable mining operations to resume and an end to the road blockage at Casillas to enable full access in and out of the Escobal mine. (See 2017 Highlights.)

Financial and operational information provided in this MD&A excludes the results of the Timmins mines prior to April 1, 2016, the date of acquisition of Lake Shore Gold Corp. (“Lake Shore Gold”) and the results of the Shahuindo mine prior to May 1, 2016, the date of commercial production.

1

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

2017 HIGHLIGHTS

2017 ANNUAL CONSOLIDATED OPERATIONAL AND FINANCIAL INFORMATION

• Record gold production of 445.9 thousand ounces. Silver production of 9.9 million ounces.

• Record gold sales of 435.2 thousand ounces. Silver sales of 10.1 million ounces.

• Met or exceeded all gold production and cost guidance for the year.

• Revenue of$733.6 million.

• Total cash costs net of by-product credits of $641 per ounce gold and $6.15 per ounce silver.

• All-in sustaining costs net of by-product credits were $973 per ounce gold and $8.91 per ounce silver.

• Net cash flow provided by operating activities of $234.3 million.

• Cash flow provided by operating activities before changes in working capital⁽¹⁾ of $287.0 million.

• Earnings of $81.8 million or $0.26 per share (basic and diluted).

• Adjusted earnings⁽¹⁾ of $84.0 million or $0.27 per share⁽¹⁾ (basic and diluted).

• Cash balance of $125.7 million as at December 31, 2017.

• Released an updated NI 43-101 technical report for the Timmins West Mine on September 21, 2017. Proven and Probable Mineral Reserves at the Timmins West Mine increased from 233,000 to 738,000 ounces of gold.

• Increased gold reserves by 400,000 ounces and gold resources by 3.4 million ounces with resource update published February 15, 2018.

• Commissioning of the Shahuindo 12,000 tonnes per day (tpd) crushing and agglomeration circuit was substantially completed in early February 2018 and the production ramp up commenced. Construction of the 24,000 tpd circuit has begun with commissioning of the full 36,000 tpd plant scheduled for mid-year 2018.

Q4 2017 CONSOLIDATED OPERATIONAL AND FINANCIAL INFORMATION

• Gold production of 105.8 thousand ounces.

• Gold sales of 92.9 thousand ounces.

• Net cash flow provided by operating activities of $18.1 million.

• Cash flow provided by operating activities before changes in working capital of $24.0 million.⁽¹⁾  

• Loss of $18.0 million or $0.06 per share (basic and diluted).

• Adjusted loss⁽¹⁾ of $17.7 million or $0.06 per share⁽¹⁾ (basic and diluted).

ADDITIONAL CONSOLIDATED OPERATIONAL AND FINANCIAL INFORMATION

	Q4 2017			2017
Revenues	$	117,734		$	733,557
Mine operating earnings (loss)(3)	$	(5,263	)	$	191,970
Cash and cash equivalents	$	125,665		$	125,665
Cost of sales per ounce sold
Silver	—			$	9.81
Gold(3)	$	1,191		$	953
Costs per silver ounce produced(1)(2)
Total cash costs net of by-product credits	$	—		$	6.15
All-in sustaining costs net of by-product credits	$	—		$	8.91
Costs per gold ounce produced(1)
Total cash costs net of by-product credits	$	648		$	641
All-in sustaining costs net of by-product credits	$	1,033		$	973

⁽¹⁾  Non-GAAP financial measures are described in the “Non-GAAP Financial Measures” section of this MD&A.

⁽²⁾  Costs per ounce silver produced are through June 30, 2017 as cessation of mining activities occurred in July at the Escobal mine.

⁽³⁾  Includes adjusted depreciation for Peru mines. See selected segmented operational results section of this MD&A.

2

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

ESCOBAL LICENSE SUSPENSION

On May 24, 2017, an anti-mining organization ("Plaintiff") filed a claim in the Supreme Court of Guatemala against the Guatemalan Ministry of Energy and Mines ("MEM") alleging that MEM violated the Xinka indigenous communities’ right of consultation in advance of granting the Escobal mining license to Tahoe’s Guatemalan subsidiary, Minera San Rafael ("MSR").

On July 5, 2017, the Company was notified that the Supreme Court of Guatemala issued a provisional decision in respect of the action against MEM that suspended the Escobal mining license of MSR until the underlying civil claim was fully heard on the merits.

On July 14, 2017, the Company filed a legal action against the Guatemalan Supreme Court challenging jurisdiction and the irregular process that the Supreme Court followed in rendering its decision, both of which the court denied.

The Company filed a procedural challenge with the Constitutional Court, the highest court in Guatemala, regarding the integration of the Supreme Court and also asked for the Supreme Court to reconsider its provisional ruling. On July 28, 2017, the Supreme Court denied the Company’s motion for reconsideration and on August 29, 2017 the Constitutional Court issued a resolution denying the Company's appeal regarding the provisional ruling.

On September 10, 2017, the Supreme Court issued a definitive decision on the merits of Plaintiff’s claim and reinstated Escobal’s mining license. The ruling also ordered MEM to consult with the Xinka indigenous communities within certain municipalities in the region of the Escobal mine within 12 months, namely Casillas, Nueva Santa Rosa, Mataquescuintla and San Rafael Las Flores. In addition, the ruling allowed Escobal to restart operations immediately and to continue to operate during consultation. In response to a motion for clarification filed by MSR on August 26, 2017, the Supreme Court declined to review the Company’s request to order MEM to issue the annual renewal of Escobal’s export credential, which expired on August 8, 2017 due to the pending appeal with the Constitutional Court of the Supreme Court’s decision on September 10, 2017. Although Tahoe believes that MEM complied with ILO Convention 169 before it issued the Escobal license, it will fully support MEM in any of its future indigenous engagement to the extent it is permitted.

Plaintiff and other interested parties appealed the Supreme Court’s decision reinstating the Escobal license to the Constitutional Court which heard the matter on October 25, 2017. The parties are awaiting a final ruling from the Constitutional Court on the definitive decision of the Supreme Court reinstating the license.

For additional details, refer to the press releases dated September 26, 2017, September 10, 2017, August 24, 2017 and July 5, 2017 available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov or on the Company’s website at www.tahoeresources.com.

ESCOBAL EXPORT CREDENTIAL

In June 2017, the Company filed its annual request to renew the export credential with MEM.  However, MEM did not renew the credential because its renewal had become contingent on the Supreme Court's reinstatement of the Escobal mining license.  The credential therefore expired in August 2017.  After the Supreme Court reinstated the mining license in September 2017, MEM publicly stated to local press that the export credential could be legally renewed.  However, contrary to such public declaration, in December MEM indicated in a written communication to MSR that it will not renew the credential given the pending ruling from the Constitutional Court.  The Company expects that MEM will renew the export credential in the event of a positive ruling of the Constitutional Court on the appeal reinstating the license.

GUATEMALA ROAD BLOCK

Since June 7, 2017, a group of protesters near the town of Casillas has blocked the primary highway that connects Guatemala City to San Rafael Las Flores and the Escobal mine. Operations were reduced between June 8 and June 19, 2017 to conserve fuel, and on July 5th were ultimately ceased following the Supreme Court’s provisional decision to suspend the Escobal mining license while the case against MEM was heard on the merits.

While some of the protestors are residents of Casillas, which is 16 kilometers from the mine, many more are from outside the municipality. The Company has reason to believe that the blockade is politically motivated

3

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

and is being substantially funded by anti-mining groups. Following the September 10, 2017 court ruling that reinstated the Escobal mining license, some protestors became increasingly violent, blocking the passage of company vehicles and attacking the truck drivers and trucks. On a separate occasion, a helicopter attempting to deliver fuel to the mine was shot at from the ground. We do not believe these actions are representative of the majority of the community members in Casillas. 

MSR representatives have continued to engage with community leaders, indigenous groups, government agencies, and international mediation experts to positive effect. The company's dialogue process is aimed at peaceably resolving the roadblock and has made significant headway in recent weeks.

For additional details, refer to the press releases dated September 10, 2017 and September 26, 2017 available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov or on the Company’s website at www.tahoeresources.com.

ESCOBAL WORKFORCE REDUCTION

Tahoe has been committed to maintaining Escobal’s full workforce since the July 5, 2017 mining license suspension.  The Guatemalan Constitutional Court heard the appeals of the Supreme Court’s decision to reinstate the Escobal mining license on October 25, 2017. As required by applicable Guatemalan court rules and procedures, the Constitutional Court should have issued a decision within five days of the hearing. Accordingly, the Company had anticipated a decision before the end of 2017, but as of February 22, 2018, no such decision has been issued and the Company cannot predict when the court will rule.

Given the delay of the court ruling and the inability of the Company to resume mining operations, the Company terminated 250 MSR employees on January 15, 2018. Prior to the license suspension, MSR employed 1,030 people, 97% of whom are Guatemalan and 50% of whom are from the Santa Rosa region. If a ruling is not issued shortly, further workforce reductions may be necessary.  In the event the road block clears and the Constitutional Court upholds the lower court decision to reinstate the mining license, MSR expects to restore its workforce and resume production.

Guatemala mining operations and concentrate sales could resume within approximately one month upon favorable resolution of the appeals to the Guatemalan Constitutional Court regarding the Escobal mining license, during which time the renewal of the export license, resolution of the roadblock at Casillas and re-engagement of the workforce would need to occur.

For additional details, refer to the press releases dated January 15, 2018 available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov or on the Company’s website at www.tahoeresources.com.

RECENT DEVELOPMENTS

CLASS ACTION LAWSUITS

On July 7, 2017, the Company learned that three purported class action lawsuits were filed against Tahoe, and certain of its current and former officers and directors under Section 10(b) and Section 20(a) of the US Securities Exchange Act of 1934, as amended (the "US Exchange Act"), and Rule 10b-5, thereunder.  The lawsuits were filed in three different federal courts and all generally allege that the Company made untrue statements of material facts or omitted to state material facts or engaged in acts that operated as a fraud upon the purchasers of the Company's stock. The lawsuits were filed following the issuance of the provisional decision by the Guatemalan Supreme Court described above. The suits allege compensatory damages, interest, fees and costs. The Company expects the cases to be transferred to one court so that they can be consolidated and a lead plaintiff can be appointed to represent the purported class members. The Company disputes the allegations raised and will vigorously defend the lawsuits, the outcome of which is not determinable at this time.

4

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

GARCIA ET AL. V. TAHOE

On June 18, 2014, seven plaintiffs filed an action against the Company in the Supreme Court of British Columbia alleging battery and negligence regarding a security incident that occurred at the Escobal Mine on April 27, 2013. The plaintiffs seek compensatory and punitive damages.

Tahoe challenged the claim in June 2014 based on jurisdictional issues, and the Court issued a judgment in Tahoe’s favor in November 2015 ruling the case should be heard in Guatemala. The plaintiffs appealed the decision to the Court of Appeal for British Columbia, which reversed the decision in January 2017, allowing the legal claims filed by the Guatemalan plaintiffs to be heard in British Columbia. Tahoe filed an application for leave to appeal the issue to the Supreme Court of Canada, which was dismissed on June 8, 2017. In April 2017, three of the seven plaintiffs settled with the Company. The case of the four remaining plaintiffs will now be heard in the Supreme Court of British Columbia.

AGREEMENT WITH LENDERS TO REVISE CREDIT FACILITY

On February 20, 2018, the Company announced the closing of its revised revolving credit facility (the "Second Amended and Restated Credit Facility") with its bank syndicate providing the Company with full access to a $175 million revolving credit facility, which includes a $25 million accordion feature, for total access of $200 million in capital. The revised facility matures on July 19, 2021. This facility is structured on the strength of Tahoe’s gold business alone, and access to the facility does not rely on the operation of the Escobal mine.

The Bank of Nova Scotia and HSBC Securities (USA) inc. are the co-leads for the facility, with The Bank of Nova Scotia acting as the administrative agent. The facility bears interest on a sliding scale of LIBOR plus between 2.25%  to 3.25% or a base rate plus 1.25% to 2.25%, which is determined based upon the Company's consolidated net leverage ratio. Standby fees for the undrawn portion of the facility are also on a similar sliding scale basis of between 0.5063% and 0.7313%. The Second Amended and Restated Credit Facility superseded the $150 million revolving credit facility that the Company initially entered on August 10, 2015, and amended on July 18, 2017, with a syndicate of lenders.

On February 20, 2018 the credit agreement with an international bank in the aggregate amount of $35 million

was repaid using cash from operations as a condition of closing the Second Amended and Restated Credit Facility.

MINERAL RESERVE AND MINERAL RESOURCE UPDATE

On February 15, the Company released Mineral Resources and Mineral Reserves effective January 1, 2018 including updated Mineral Resources for the La Arena II project and increased Mineral Resources and Mineral Reserves at Shahuindo that resulted from exploration successes at the La Chilca, San Jose, San Lorenzo and El Sauce areas proximal to the current Shahuindo pit.

	Gold Ounces (k)
Measured & Indicated Mineral Resources as of January 1, 2017	10,562
Measured & Indicated Mineral Resources as of January 1, 2018	14,005
Increase	3,443
Percent Increase	33%

As of January 1, 2018 the Company’s Measured and Indicated Mineral Resources totaled 14 million ounces of gold, 403 million ounces of silver, 5.8 billion pounds of copper, 256 thousand tonnes of lead and 427 thousand tonnes of zinc, as summarized below:

5

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

CONSOLIDATED MINERAL RESOURCES AS OF JANUARY 1, 2018
Resource Classification	Gold (koz)	Silver (koz)	Copper (mlbs)	Lead (ktonnes)	Zinc (ktonnes)
Measured	3,101	74,911	1,279	33	58
Indicated	10,904	327,642	4,511	224	369
Measured + Indicated	14,005	402,552	5,790	256	427
Inferred	8,816	57,726	349	4	8

Totals may not sum due to rounding

On a consolidated basis, the Company added 399 thousand gold ounces of Proven and Probable Mineral Reserves at its operating properties net of 2017 mine production.

	Gold Ounces (k)
Proven & Probable Mineral Reserves as of January 1, 20171	3,322
Less Mineral Reserves Mined during 2017	(489)
Plus Mineral Reserve Additions in 2017	888
Proven & Probable Mineral Reserves as of January 1, 2018	3,721
Net Increase	399

¹ excludes 2017 La Arena Mineral Reserves no longer carried by the Company

As of January 1, 2018 the Company’s Proven and Probable Mineral Reserves totaled 3.7 million ounces of gold, 288 million ounces of silver, 196 thousand tonnes of lead and 320 thousand tonnes of zinc as summarized below:

MINERAL RESERVES AS OF JANUARY 1, 2018
Operation	Resource Classification	Gold (koz)	Silver (koz)	Lead (ktonnes)	Zinc (ktonnes)
Escobal Mine	Proven	34	39,532	26	44
	Probable	244	224,961	170	276
	Proven + Probable	278	264,493	196	320
La Arena Mine	Proven	3	—	—	—
	Probable	565	—	—	—
	Proven + Probable	568	—	—	—
Shahuindo Mine	Proven	1,203	14,756	—	—
	Probable	704	8,384	—	—
	Proven + Probable	1,907	23,140	—	—
Timmins West Mine	Proven	47	—	—	—
	Probable	606	—	—	—
	Proven + Probable	654	—	—	—
Bell Creek Mine	Proven	68	—	—	—
	Probable	246	—	—	—
	Proven + Probable	315	—	—	—
Total	Proven	1,356	54,288	26	44
	Probable	2,366	233,345	170	276
	Proven + Probable	3,721	287,633	196	320

^1.  Totals may not sum due to rounding

^2.  Mineral Reserves are included in Mineral Resources

Details of Mineral Resource and Mineral Reserve estimates for each operating mine and for each exploration/development project are included in the Technical Information section of this MD&A.

6

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

LA ARENA II PRELIMINARY ECONOMIC ASSESSMENT

The Company released a new NI 43-101 technical report for the La Arena property, Technical Report on the La Arena Property, Peru published February 20, 2018 which includes an update of the existing La Arena Mine oxide gold heap leach operation and a Preliminary Economic Assessment (“PEA”) of the La Arena II copper-gold porphyry project. The technical report is available on the Company’s website at www.tahoeresources.com and on SEDAR at www.sedar.comand EDGAR (www.sec.gov).

Highlights of the La Arena II PEA include:

• Measured and Indicated Mineral Resources of 742 million tonnes containing 5.8 billion pounds of copper and 5.6 million ounces of gold at average grades of 0.35% copper and 0.24 g/t gold. Inferred Mineral Resources totaled 92 million tonnes containing 349 million pounds of copper and 683 thousand ounces of gold at average grades of 0.17% copper and 0.23 g/t gold.

• Mineral Resources contained within the designed pit total 686 million tonnes containing 5.2 billion pounds of copper and 5.4 million ounces of gold at average grades of 0.38% copper and 0.25 g/t gold, of which 92% are Measured or Indicated Mineral Resources.

• Average annual metal recovered to concentrate or doré of 207 million pounds of copper and 150 thousand ounces of gold over a 21 year mine life, with an additional 115 million pounds of copper and 226 thousand ounces of gold produced during the pre-production and commissioning period. Total metal recovered to concentrate over the LOM is estimated to be 4.5 billion pounds of copper and 2.8 million ounces of gold, with an additional 575 thousand ounces of gold recovered in doré.

• Open pit mining rate of 80,000 tonnes per day, with flotation processing to create a high-quality copper+gold concentrate, with run-of-mine heap leaching of the oxide gold cap.

• Capital costs are estimated at $1.36 billion for project capital and $1.09 billion for sustaining capital over the life-of-mine.

• Average annual after-tax cash flow of $273 million.

• Average co-product cost of $600 per ounce gold and $1.55 per pound copper. Average annual cash operating costs are $395 million. Total operating cost is $12.87 per tonne processed.

• After tax net present value at a 8% discount rate of US$824 million and an internal rate of return of 14.7% with a payback period of 4.6 years at the long-term base case metal prices $3.30 per pound copper and $1,300 per ounce gold.

Mineral Resources as of January 1, 2018 for the La Arena II project are summarized below:

LA ARENA II MINERAL RESOURCES
Material Type	Classification	Tonnes (M)	Gold (g/t)	Copper (%)	Gold (koz)	Copper (Mlbs)
Oxide	Measured	5.9	0.27	—	51	—
	Indicated	43.2	0.28	—	388	—
	Measured + Indicated	49.1	0.28	—	440	—
	Inferred	41.3	0.26	—	349	—
Sulfide	Measured	149.7	0.25	0.39	1,214	1,279
	Indicated	543.5	0.23	0.38	3,984	4,511
	Measured + Indicated	693.2	0.23	0.38	5,197	5,790
	Inferred	50.4	0..21	0.31	344	349
All Material	Measured	155.7	0.25	0.37	1,265	1,279
	Indicated	586.7	0.23	0.35	4,372	4,511
	Measured + Indicated	742.4	0.24	0.35	5,637	5,790
	Inferred	91.6	0.23	0.17	683	349

^{(1)  Sulfide Mineral Resources include sulfide, transitional oxide-sulfide and supergene resources} 

^{(2)  Totals may not sum due to rounding} 

Mineral Resources as reported are contained within a pit shell using $4.00 per pound copper and $1,500 per ounce gold. There are no Mineral Reserves reported for the La Arena II project.

NI 43-101 required disclosure: Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The La Arena II PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would

7

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA will be realized. The PEA supersedes the 2015 prefeasibility study issued by Rio Alto.

Tahoe expects to continue its evaluation of the La Arena II project with the intent of advancing the project to the prefeasibility or feasibility stage at the appropriate time. The timeline and estimated capital required to progress the project to the next stage are under review. The project will be evaluated in the context of existing operations and pipeline opportunities. Tahoe will assess all financial and strategic options available in order to progress the project responsibly and to maximize value for shareholders.

The Company has included total cash costs on a co-product basis which is a non-GAAP financial measure, is not defined under IFRS and should not be considered in isolation. The La Arena II project is expected to produce both gold and copper, neither of which comprise more than 80% of the revenues of the project. The Company believes total cash cost on a co-product basis may provide investors and analysts with useful information about the project and provide a meaningful comparison to other mining companies. Accordingly, this measure is intended to provide additional information and should not be substituted for GAAP measures. This non-GAAP financial measure may be calculated differently by other companies depending on the underlying accounting principles and policies applied.

Total cash costs are presented on a co-product basis to remove the impact of by-product credits. Costs directly attributable to each metal (i.e. refining costs and heap leaching) are assigned to the metal. All other costs have been allocated based on the percentage of total revenue and are calculated based on post commercial production costs and revenues as follows:

$ millions	Gold			Copper			Total
Revenue	$	3,869		$	13,854		$	17,723
% of Revenue	22		%	78		%	100		%
Mining & Stockpile	$	554		$	1,983		$	2,537
Concentrator	$	734		$	2,628		$	3,362
General Administration	$	128		$	458		$	586
Transportation	$	140		$	500		$	639
Treatment Charges	$	159		$	570		$	729
Gold Heap Leach	$	54		-			$	54
Gold Refining	$	18		-			$	18
Copper Refining	-			$	378		$	378
Total Cost	$	1,787		$	6,517		$	8,303
Gold production (oz)	2,976,173			-			2,976,173
Copper Production (lb)	-			4,198,205,654			4,198,206
Co-product cost per ounce / pound	$	600		$	1.55

UNITED NATIONS GLOBAL COMPACT AND 2018 CSR INITIATIVES

On February 5, 2018, Tahoe announced that it has joined the United Nations Global Compact (UNGC), the world’s largest corporate sustainability initiative. As an official participant of the UNGC, Tahoe joins other international businesses, including a number of industry-leading mining companies, in committing to align its strategies and operations with the ten principles of the UNGC on human rights, labor, environment and anti-corruption, and take actions that advance these societal goals. As part of its commitment, Tahoe will make the UN Global Compact and its principles part of the strategy, policy, culture and day-to-day operations of the company, and continue to engage collaboratively on programming that advances the UN Sustainable Development Goals.  Tahoe will also participate in the Global Compact’s Canada Local Network to work with other companies, with the aim to scale the impact of sustainability efforts on a global level.

8

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

FUTURE DEVELOPMENTS

2018 OPERATIONS OUTLOOK

The Company provided guidance regarding expected 2018, 2019 and 2020 production and unit costs in the press release dated February 22, 2018 available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov or on the Company’s website at www.tahoeresources.com.

2018 guidance

The Company’s guidance for gold production in 2018 is 400 to 475 thousand ounces. Total cash costs net of by-product credits and all-in sustaining costs per ounce of gold produced in 2018 are estimated to be $725 to $775 per ounce and $1,000 to $1,100 per ounce, respectively.

The Company is not providing guidance for silver production or costs until operations at the Escobal mine resume.

2018 consolidated gold guidance ranges are as follows:

		Gold
Production koz		400	to		475
Total cash costs per ounce net of by-product credits(1)	$	725	to	$	775
All-in sustaining costs per ounce net of by-product credits(1)	$	1,000	to	$	1,100
Sustaining Capital $millions	$	90	to	$	115
Project Capital $millions	$	125	to	$	150
Exploration $ millions	$	15	to	$	25
Total Corporate G&A(2) $millions	$	45	to	$	55

⁽¹⁾  See “Cautionary Statement on Forward-Looking Information” and “Non-GAAP Financial Measures” in this MD&A.

⁽²⁾  Corporate G&A is allocated based on a percentage of revenue of approximately 60% to gold and 40% to silver.

2018 gold guidance by mine

	Production (gold - koz)		Cash Costs ($/oz)		All-in Sustaining Costs ($/oz)		Project Capital ($ millions)		Sustaining Capital ($ millions)		Exploration ($ millions)
	Low	High	Low	High	Low	High	Low	High	Low	High	Low	High
La Arena	160	185	650	700	950	1,050	—	—	35	40	1	2
Shahuindo	80	110	750	800	1,050	1,100	80	100	15	20	8	10
Timmins Mines	160	175	800	850	1,050	1,150	45	50	40	55	6	12
Gold total	400	475	725	775	1,000	1,100	125	150	90	115	15	25

⁽¹⁾  See “Cautionary Statement on Forward-Looking Information” and “Non-GAAP Financial Measures” in this MD&A.

⁽²⁾  All per ounce costs are based on gold ounces recovered (gold).

⁽³⁾  The top end of the gold production range includes approximatively 5 thousand ounces from Escobal.

⁽⁴⁾  Numbers may not calculate due to rounding.

2018 is a transition year for the Company. The guidance for gold production considers the higher risk of the growth profile related to the timing of the commissioning of the Bell Creek shaft project mid-year and the ramp up of the Shahuindo expansion to 36,000 tonnes per day by the end of 2018. The Company anticipates seeing higher total cash costs in 2018 than we saw in 2017 at a range of $725 to $775 per ounce. This increase is being driven by the lower grade in the 144 Gap deposit, along with more ounces coming from Shahuindo, both of which have higher cost profiles than La Arena. As expected, the lower cost La Arena will make up a smaller proportion of total production in 2018 than in previous years which will also impact costs. Tahoe is continuously focused on finding ways to increase the profitability of all its mines and lower costs, however this focus is a priority in 2018 at the Timmins operations given the lower grade profile. 2018 gold production guidance is also impacted by the initial Mineral Reserve estimate for 144 Gap released on September 21, 2017 which increased the Proven and Probable Mineral Reserves at the Timmins West Mine from 233,000 to 738,000 ounces of gold, but the average grade was lower than anticipated.

9

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Capital expenditures in 2018 reflect peak investment levels for expansion at the Shahuindo mine (including the 36,000 tpd crushing and agglomeration plant) and the Bell Creek shaft project. Approximately $60 million in project capital was deferred from 2017 and is now expected to be spent in 2018. Higher unit costs per ounce of gold produced are expected in 2018 when compared to 2017 as a result of lower expected production levels at La Arena, the increased proportion of production from Shahuindo, as well as a stronger forecasted Canadian dollar impacting the Timmins operations. The production forecasts at Shahuindo and Timmins are expected to feature higher production in the second half of 2018, with the commissioning of the second phase crushing and agglomeration circuit at Shahuindo and completion of the Bell Creek shaft project expected mid-year 2018. The operational ramp up to 36,000 tpd and the completion of the Shahuindo expansion is expected by the end of 2018.

Capital requirements to achieve the Company’s growth objectives are expected to peak in 2018. Growth capital expenditures for the year are estimated at $125 to $150 million, with Shahuindo accounting for approximately 65% of the total, and the remainder in Canada. Growth expenditures at the Shahuindo expansion are associated with the completion of the crushing and agglomeration plant, process plant expansion, leach pad 2B (assumed to be sustaining capital in previously issued guidance), waste dumps and the power substation. Growth expenditures in Canada relate primarily to the Bell Creek shaft project and tailings pond expansion.

Sustaining capital expenditures in 2018 are targeted at $90 to $115 million for the gold operations. Canada will account for approximately 45% of total gold sustaining capital expenditures in 2018, while La Arena is approximately 30% and Shahuindo the remaining 25%. A significant proportion of these expenditures relate to the underground drilling and development in Canada, as well as leach pad and waste dump construction at La Arena.

Exploration expenses (excluding capitalized drilling in the mines) are anticipated to be between $15 and $25 million in 2018, including drilling programs designed to expand Mineral Resources at existing operations and to advance longer-term projects in Canada and Peru.

The reconciliation which formed the basis for the ranges in the 2018 total cash cost and all-in sustaining cost guidance is as follows($ in thousands):

Total cash costs		La Arena		Shahuindo		Timmins Mines		Gold
Production costs	$	115,000	$	70,000	$	140,000	$	325,000
Treatment and refining charges		—		—		—		—
Total cash costs before by-product credits	$	115,000	$	70,000	$	140,000	$	325,000
By-product credits		—		—		—		—
Total cash costs net of by-product credits	$	115,000	$	70,000	$	140,000	$	325,000
Gold ounces produced in doré (000’s)		170		90		175		435
Total cash costs per ounce before by-product credits	$	676	$	778	$	800	$	747
Total cash costs per ounce net of by-product credits	$	676	$	778	$	800	$	747

All-in sustaining costs		La Arena		Shahuindo		Timmins		Gold
Total cash costs net of by-product credits	$	115,000	$	70,000	$	140,000	$	325,000
Sustaining capital		35,000		15,000		45,000		95,000
Exploration		—		—		4,500		4,500
Reclamation cost accretion		1,000		1,000		1,000		3,000
General and administrative expenses		12,000		9,000		9,000		30,000
All-in sustaining costs	$	163,000	$	95,000	$	199,500	$	457,500
Gold ounces produced in doré (000’s)		170		90		175		435
All-in sustaining costs per ounce produced net of by-product credits	$	959	$	1,056	$	1,140	$	1,052

2018 gold guidance was calculated based on certain commodity and currency assumptions. The table below includes a sensitivity of the impact of a change in these assumptions on total cash costs and all-in sustaining costs:

10

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

	2018 Guidance		Change (+/-)		Impact (+/-)
Commodity assumptions
Silver ($/oz)		$17.50		$1.00/oz		nil
Diesel (US$/gal)		$2.40		10%		$6/oz gold
Currency assumptions
CAD/USD		$1.20		1%		$9/oz gold
Peruvian sol/USD		3.3		1%		$2/oz gold

LONG-TERM OUTLOOK

With the Company on track to complete both the commissioning of the crushing and agglomeration circuit at Shahuindo and the Bell Creek shaft project in mid-2018, as well as the expansion and ramp-up to 36,000 tpd at Shahuindo by the end of 2018, annual gold production is expected to increase to over one half million ounces in 2019. At that time, total cash costs net of by-product credits and all-in sustaining costs per ounce of gold produced, net of by-product credits are projected to improve, to ranges of $650 to $700 and $950 to $1,050, respectively. 

Based on existing legal precedent, the Company continues to expect the Guatemalan Constitutional Court to uphold the reinstatement of the mining license and the roadblock to be resolved at which time Escobal mine could return to production. Nevertheless, it is difficult to predict outcomes of the roadblock discussions and the timing, findings and conditions of the Constitutional Court’s decision. The Company anticipates that once the Escobal mine is returned to normalized operations (i.e., conditions experienced prior to the license suspension) that annual silver production would ramp up over a period of 3 to 6 months to those levels achieved from 2014 through 2016. The Company’s goal is to reach and sustain 18-21 million ounces of silver production and 500 -550 thousand ounces of gold production annually. Meeting this goal for gold production depends on exploration success in delivering additional resources and reserves to replace those mined.

Sustaining capital expenditures for the gold segment are expected to stay in the range of $100 to $125 million. Once production is restored to normal levels at the Escobal mine, the Company anticipates annual sustaining capital expenditures for the silver segment targeted at $30 to $40 million.

Although Tahoe expects to continue its evaluation of the La Arena II project with the intent of advancing the project to the prefeasibility or feasibility stage at the appropriate time, the timeline and estimated capital required to progress the project to the next stage are under review. As such, no additional spending has been considered in the multi-year guidance below.

Therefore, until such time as the Company decides to commence the development of any significant new projects or studies, growth capital expenditures in 2019 are expected at between $50 and $70 million with the remainder of less than $10 million in 2020. Exploration expenditures are likely to remain between $15 and $25 million over the next two years as the Company works to advance exploration targets. With exploration programs being largely success driven, future expenditure targets are expected to be developed following completion of 2018 drilling programs.

Multi-year gold guidance

		2018		2019		2020
Gold ounces produced (000’s)		400-475		500-550		500-550
Total cash costs per ounce gold produced net of by-product credits	$	725-775	$	650-700	$	650-750
All-in sustaining costs per ounce gold produced net of by-product credits	$	1,000-1,100	$	950-1,050	$	900-1,000
Total corporate G&A  ($millions)	$	45-55	$	45-55	$	45-55
Exploration ($millions)	$	15-25	$	15-25	$	15-25
Sustaining capital - gold ($millions)	$	90-115	$	100-125	$	80-100
Project capital ($millions)	$	125-150	$	50-70	$	0-10

⁽¹⁾  See “Cautionary Statement on Forward-Looking Information” and “Non-GAAP Financial Measures” in this MD&A.

11

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

⁽²⁾  Commodity and currency price assumptions used in the calculation of 2019 and 2020 guidance are the same as those used in the calculation of 2018 guidance. Refer to the “2018 Guidance by mine” section of this MD&A.

⁽³⁾  The top end of the gold production range includes approximatively 5 thousand ounces from Escobal in 2018.

⁽⁴⁾  All per ounce costs are based on gold ounces recovered.

⁽⁵⁾  Guidance does not include inflation adjustments.

The reconciliation which formed the basis for the ranges in the multi-year total cash cost and all-in sustaining cost guidance for gold is as follows:

Total cash costs (gold)		2018	2019		2020
Production costs	$	325,000	$	354,500	$	354,500
Treatment and refining charges		—		—		—
Total cash costs before by-product credits	$	325,000	$	354,500	$	354,500
By-product credits(1)		—		—		—
Total cash costs net of by-product credits	$	325,000	$	354,500	$	354,500
Gold ounces produced in doré (000’s)		435		525		525
Total cash costs per ounce before by-product credits	$	747	$	675	$	675
Total cash costs per ounce net of by-product credits	$	747	$	675	$	675

All-in sustaining costs (gold)		2018	2019		2020
Total cash costs net of by-product credits	$	325,000	$	354,500	$	354,500
Sustaining capital		95,000		125,000		107,000
Exploration		4,500		10,000		6,000
Reclamation cost accretion		3,000		3,000		3,000
Corporate G&A		30,000		32,500		28,500
All-in sustaining costs	$	457,500	$	525,000	$	499,000
Gold ounces produced in doré (000’s)		435		525		525
All-in sustaining costs per ounce produced net of by-product credits	$	1,052	$	1,000	$	950

⁽¹⁾  Numbers may not calculate due to rounding

⁽²⁾  General and administrative expenses have been allocated to gold at 60% of total corporate G&A consistent with 2018.

12

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

SELECTED CONSOLIDATED FINANCIAL RESULTS

Selected consolidated financial information from continuing operations for the year ended December 31, 2017 and for the previous two years is as follows:

	2017		2016		2015
Metal Sold
Silver (000’s ozs)	10,113		19,065		20,210
Gold (000’s ozs)(8)	435.2		358.2		183.7
Lead (000’s t)	4.0		9.0		9.8
Zinc (000’s t)	5.6		12.3		13.3
Realized Price
Silver in concentrate (per oz)	$	17.71	$	17.57	$	15.15
Gold in doré (per oz)	$	1,246	$	1,245	$	1,126
Lead (per t)	$	2,379	$	1,886	$	1,854
Zinc (per t)	$	2,864	$	2,268	$	1,800
LBMA/LME Price(3)
Silver (per oz)	$	17.16	$	17.14	$	15.68
Gold (per oz)	$	1,251	$	1,250	$	1,160
Lead (per t)	$	2,259	$	1,872	$	1,784
Zinc (per t)	$	2,783	$	2,095	$	1,928
Revenues	$	733,557	$	784,503	$	519,721
Total operating costs	$	541,587	$	480,378	$	333,550
Mine operating earnings (loss)	$	191,970	$	242,268	$	(79,552	)
Earnings (loss)	$	81,793	$	117,876	$	(71,911	)
Earnings (loss) per common share
Basic	$	0.26	$	0.41	$	(0.35	)
Diluted	$	0.26	$	0.41	$	(0.35	)
Adjusted earnings(4)	$	84,011	$	180,385	$	98,910
Adjusted earnings per common share(4)
Basic	$	0.27	$	0.62	$	0.48
Diluted	$	0.27	$	0.62	$	0.48
Weighted average shares outstanding - Basic (in 000's)	312,804		289,726		207,811
Weighted average shares outstanding - Diluted (in 000's)	312,834		289,988		207,811
Dividends paid	$	43,686	$	69,402	$	49,717
Cash flow provided by operating activities	$	234,264	$	249,454	$	166,744
Cash flow provided by operating activities before changes in working capital	$	287,014	$	385,926	$	226,332
Cash and cash equivalents	$	125,665	$	163,368	$	108,667
Total assets	$	3,080,638	$	3,071,253	$	2,002,461
Total long-term liabilities	$	299,920	$	348,663	$	187,550
Costs per silver ounce produced
Total cash costs net of by-product credits(4)(5)	$	6.15	$	5.84	$	6.16
All-in sustaining costs per silver ounce net of by-product credits(4)(7)	$	8.91	$	8.06	$	9.11
Costs per gold ounce produced
Total cash costs net of by-product credits(4)	$	641	$	620	$	551
All-in sustaining costs per gold ounce net of by-product credits(4)(6)	$	973	$	943	$	733

⁽¹⁾  Comparative 2015 numbers exclude operational and financial information from the Timmins mines and include the operational and financial information of Rio Alto from April 1, 2015 the date of acquisition.

⁽²⁾  2016 numbers include operational and financial information from the Timmins mines beginning April 1, 2016, the date of acquisition of Lake Shore Gold and operational and financial information from Shahuindo beginning May 1, 2016, the commencement of commercial production.

⁽³⁾  London Bullion Market Association (LBMA)/London Metal Exchange (LME) average closing prices for each period presented.

⁽⁴⁾  Refer to the “Non-GAAP Financial Measures” section of this MD&A.

13

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

⁽⁵⁾  Total cash costs net of by-product credits per silver ounce produced for 2015 include $7.2 million in royalty expense from 2014 sales that settled in 2015 at the increased royalty rate of 10%. This resulted in a per ounce impact of $0.36 for 2015. This impact was offset during Q4 2015 as a result of a $16.2 million reversal of the increased 10% royalty regime resulting in a positive impact of $0.80 per ounce for 2015.

⁽⁶⁾  All-in sustaining costs net of by-product credits per gold ounce produced for 2016 exclude the impact of $11.1 million in non-recurring transaction costs related to the acquisition of Lake Shore Gold.

⁽⁷⁾  All-in sustaining costs net of by-product credits per silver ounce produced for 2015 exclude the impact of $7.2 million in non- recurring transaction costs related to the acquisition of Rio Alto.

⁽⁸⁾  Included in the 358.2 thousand gold ounces sold for 2016 are 44.3 thousand gold ounces sold at Shahuindo which include four months of pre-commercial production ounces sold (7.6 thousand ounces of gold in doré sold in the period January through April 2016).

⁽⁹⁾  Earnings of $117.9 million for 2016 were impacted by the result of a change in enacted tax rates in Peru for $19.3 million, a non-cash loss on the redemption of the Lake Shore Gold debentures of $32.3 million and non-recurring transaction costs of $11.1 million related to the acquisition of Lake Shore Gold. Refer to the Company’s adjusted earnings described and calculated in the “Non-GAAP Financial Measures” section of this MD&A.

⁽¹⁰⁾  Numbers may not calculate due to rounding.

REVIEW OF ANNUAL CONSOLIDATED FINANCIAL RESULTS

Basis of presentation

The annual results presented in this section and the quarterly results presented in the subsequent section of this MD&A are prepared in accordance with IFRS. The Company’s significant accounting policies are outlined within note 3 of the Company’s consolidated financial statements for the years ended December 31, 2017 and 2016.

Comparative 2016 year includes data from the Timmins mines beginning April 1, 2016, the date of acquisition of Lake Shore Gold Corp.

2017 vs. 2016

2017 results reflect the impact of the cessation of mining operations at the Escobal mine following the provisional suspension of the mining license at the beginning of the third quarter. Costs related to the Escobal mine incurred from the date of the license suspension have been included in the care and maintenance line within production costs; no material revenues for Escobal have been recorded since July 2017. The Company generated earnings of $81.8 million for 2017 compared to $117.9 million for 2016 as a result of the following factors (comparative 2016 information includes results from Lake Shore Gold beginning April 1, 2016 and results from Shahuindo beginning May 1, 2016, except where noted).

Revenues

During 2017, the Company sold in concentrate 10.0 million silver ounces at an average realized price of $17.70 compared to 19.0 million silver ounces at an average realized price of $17.57 during 2016. The Company sold in concentrate 3.3 thousand gold ounces during 2017 compared to 7.7 thousand gold ounces during 2016. During 2017, the Company sold in concentrate 4.0 thousand tonnes of lead and 5.6 thousand tonnes of zinc at realized prices of $2,379 and $2,864 per tonne, respectively, compared to 9.0 thousand tonnes of lead and 12.3 thousand tonnes of zinc at realized prices of $1,886 and $2,268 per tonne, respectively, during 2016.

During 2017, the Company sold 431.9 thousand ounces of gold in doré at an average realized price of $1,246 per ounce compared to 350.5 thousand ounces of gold in doré at an average realized price of $1,245 per ounce during 2016.

Silver in concentrate sales decreased by approximately 47% during 2017 compared to 2016 due to the suspension of mining operations at Escobal for approximately half of the year. Gold in doré sales increased by 81.4 thousand ounces or 23% due to the inclusion of a full year of sales from both the Timmins mines and the Shahuindo mine. As a result, the Company generated revenues of $733.6 million, net of treatment and refining charges for 2017, compared to $784.5 million in revenues for 2016, a decrease of approximately $50.9 million or 6%.

The Company’s concentrate revenue and trade receivables included provisionally priced metal sales which were marked to market at the end of each reporting period based on the forward price for the quotational period stipulated in the contract (or an approximation thereof). Provisionally priced metal at December 31, 2017 and relevant comparative periods was as follows:

14

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

	2017			2016
	Qty	$/oz		Qty	$/oz
Silver (mozs)	—	$	—	3.3	$	15.95
Gold (kozs)	—	$	—	1.8	$	1,151
	Qty	$/t		Qty	$/t
Lead (kt)	—	$	—	2.1	$	1,983
Zinc (kt)	—	$	—	2.5	$	2,619

Operating costs

Production costs

Production costs, which comprise the full cost of operations less royalties, Escobal care and maintenance costs and depreciation and depletion, form a component of total operating costs and were $348.1 million for 2017 compared to $332.7 million for 2016. The increase was primarily due to the inclusion of production costs relating to the Timmins mines, acquired in 2016 as well as a full year of production costs at the Shahuindo mine during 2017 offset by only six months of production from the Escobal mine.

Royalties

During 2017, royalty expense was $15.6 million, comprised of $10.2 million in Guatemala and $5.4 million in Canada. This compared to a royalty expense of $22.9 million in 2016 comprised of $18.7 million in Guatemala and $4.2 million in Canada. The $7.3 million decrease reflected an addition of $1.2 million in Canada which was the result of a full year of operations being included in the 2017 results offset by only six months of production in Guatemala.

Royalties paid in Peru were calculated using a form of operating profit and were therefore accounted for as an income tax.

Escobal care and maintenance

Escobal care and maintenance costs are comprised of the cost of maintaining the Escobal mine during the temporary shut down and include environmental and security costs, salaries and legal fees. These form a component of total operating costs, and amounted to $24.9 million for 2017. Costs were higher than anticipated as a result of the roadblock in Casillas, which has required alternative transportation routes for diesel and other mine supplies to meet our environmental and security obligations while the mine is not operating. There were no such costs in the comparative period.

Depreciation and depletion

During 2017, depreciation and depletion was $153.0 million compared to $124.7 million in 2016. This increase was primarily due to the inclusion of a full year of depletion and depreciation relating to the Timmins mines, acquired in 2016, and from the Shahuindo mine which declared commercial production in May of 2016. These increases were offset by a reduction of depreciation and depletion related to the Escobal mine as a result of the cessation of mining activities early in the third quarter. Depreciation and depletion also included a pre-tax $11.3 million adjustment in the fourth quarter of 2017 to true-up the depletion related to the Peruvian mines.

Other operating expenses

Exploration expenses

Exploration expenses were $18.5 million for 2017 compared to $14.4 million in 2016. This $4.1 million increase was the result of increased exploration expenditures of $3.8 million in Canada. The increase in exploration expense was in line with the Company’s focus on growth to expand resources at existing operations and advance longer-term projects in Canada and Peru.

General and administrative expenses

General and administrative expenses were $45.8 million for 2017 compared to $47.5 million for 2016. This $1.7 million decrease related primarily to the inclusion of $11.1 million in transaction costs relating to the acquisition of Lake Shore Gold in 2016, coupled with a decrease in share based compensation expense of $1.6 million offset by an increase of $1.9 million in consulting and professional fees an

15

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

increase in salaries and benefits of $5.4 million and an increase in administrative and other expenses of $3.7 million.

Impairment

The Company identified six CGUs for which indicators of impairment were assessed: Escobal, La Arena oxides, La Arena II (previously La Arena sulfides), Shahuindo, Timmins mines and the Timmins Exploration Potential. In the current year, goodwill was tested at La Arena II and Timmins Exploration Potential, there were impairment indicators at the Escobal mine as it was on care and maintenance and no impairment was recognized in 2017 as a result of our analysis. Discounted cash flow models were prepared using long-term prices for gold of $1,307/oz, silver of $19.54/oz and copper of $3.30/lb (2016: $1,250/oz, silver price - $17.50/oz and copper price $3.00/lb), discount rates between 7.0% and 8.00% (2016: 6.50% and 8.75%) depending on the development stage of the operation or project. In-situ values were used for the impairment testing of exploration potential. Based on the results, for the year ended December 31, 2017, management concluded that there was no impairment or reversal of prior impairment for any of the CGUs.

Other expense

Net foreign exchange loss

A foreign exchange loss of $2.4 million was recognized during 2017 compared to a loss of $0.4 million during 2016. The $2.0 million increase in foreign exchange loss was the result of the appreciation of foreign currencies against the USD including a decrease of $0.3 million related to the Peruvian Sol and $0.7 million related to the Guatemalan Quetzal offset by an increase of $3.0 million as a result of the appreciation in the Canadian dollar against the USD. The Company remains unhedged with respect to foreign currency. Refer to the “Cash flow, liquidity, capital resources and other information – Liquidity, capital resources and financial risk management – Financial risk management – Market risk – Foreign exchange risk” section of this MD&A.

Loss on debenture

In 2016, as a result of the redemption of the outstanding Lake Shore Gold debentures, the Company recognized a non-cash loss of $32.3 million during that year. This non-cash loss was attributable to the appreciation of Tahoe’s share price between the date of acquisition on April 1, 2016 and the completion of the debenture redemption on May 16, 2016.

Tax expense

Income tax expense for 2017 was $38.0 million, representing an effective rate of 32%.

Income tax expense for 2016 was $90.9 million, representing an effective rate of 44%. The effective tax rate in 2016 was impacted by the non-cash loss on debenture conversion and transaction costs related to the acquisition of Lake Shore Gold. In addition, income tax rates in Peru which were previously on a gradual reduction from 28.0% to 26.0% over the course of five years to 2019, were superseded in December 2016 with an increased statutory rate to 29.5% effective January 1, 2017. The change in rates during 2016 resulted in a non-cash deferred tax expense of $19.3 million. Excluding the impact of the change in tax rate in Peru, the effective rate was 34%.

16

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

SELECTED QUARTERLY CONSOLIDATED FINANCIAL RESULTS

Selected quarterly consolidated financial information from continuing operations for the most recent eight quarters is as follows:

	Q4			Q3			Q2		Q1		Q4		Q3		Q2		Q1
	2017			2017			2017		2017		2016		2016		2016		2016(1)
Metal Sold
Silver (000’s ozs)	46			489			4,289		5,561		4,496		4,800		5,212		4,563
Gold (000’s ozs)(5)	92.9			116.3			110.3		115.9		100.7		108.8		98.1		50.6
Lead (000’s t)	—			—			2.0		2.2		2.3		1.9		2.4		2.4
Zinc (000’s t)	—			—			2.8		2.8		2.8		2.7		3.5		3.3
Realized Price
Silver in concentrate (per oz)	$	—		$	18.12		$	15.72	$	19.22	$	14.45	$	20.64	$	18.95	$	15.92
Gold in doré (per oz)	$	1,272		$	1,266		$	1,248	$	1,201	$	1,197	$	1,321	$	1,255	$	1,166
Lead (per t)	$	—		$	—		$	2,138	$	2,588	$	2,036	$	2,204	$	1,779	$	1,590
Zinc (per t)	$	—		$	—		$	2,601	$	2,960	$	2,872	$	2,513	$	2,237	$	1,875
LBMA/LME Price(2)
Silver (per oz)	$	16.84		$	16.84		$	17.21	$	17.42	$	17.19	$	19.61	$	16.78	$	14.85
Gold (per oz)	$	1,278		$	1,278		$	1,257	$	1,219	$	1,220	$	1,335	$	1,259	$	1,181
Lead (per t)	$	2,334		$	2,334		$	2,161	$	2,278	$	2,149	$	1,873	$	1,719	$	1,744
Zinc (per t)	$	2,963		$	2,963		$	2,596	$	2,780	$	2,517	$	2,255	$	1,918	$	1,679
Revenues	$	117,734		$	155,201		$	209,576	$	251,046	$	189,398	$	234,721	$	228,251	$	132,133
Total operating costs	$	122,997		$	136,422		$	135,291	$	146,878	$	141,552	$	123,084	$	138,220	$	77,522
Earnings (loss) fromoperations	$	(20,219	)	$	18,779		$	56,975	$	88,283	$	31,466	$	99,425	$	65,022	$	46,355
Earnings (loss)(6)	$	(18,010	)	$	(8,380	)	$	33,487	$	74,697	$	315	$	63,011	$	16,742	$	37,808
Earnings (loss) percommon share
Basic	$	(0.06	)	$	(0.03	)	$	0.11	$	0.24	$	—	$	0.20	$	0.05	$	0.17
Diluted	$	(0.06	)	$	(0.03	)	$	0.11	$	0.24	$	—	$	0.20	$	0.05	$	0.17
Adjusted earnings(loss)(3)	$	(17,678	)	$	(7,225	)	$	33,846	$	75,069	$	18,415	$	65,657	$	57,873	$	35,489
Adjusted earnings(loss) per CommonShare(3)
Basic	$	(0.06	)	$	(0.02	)	$	0.11	$	0.24	$	0.06	$	0.21	$	0.19	$	0.16
Diluted	$	(0.06	)	$	(0.02	)	$	0.11	$	0.24	$	0.06	$	0.21	$	0.19	$	0.16
Weighted average shares outstanding - Basic	313,193			313,152			312,787		311,948		311,653		311,407		305,985		227,760
Weighted average shares outstanding - Diluted	313,200			313,161			312,869		312,025		311,786		312,108		306,174		227,898
Dividends paid	$	—		$	6,252		$	18,740	$	18,695	$	18,672	$	18,654	$	18,419	$	13,657
Cash flow provided by operating activities	$	18,081		$	48,675		$	96,068	$	78,575	$	107,021	$	78,679	$	37,678	$	25,293
Cash flow provided by operating activities before changes in working capital	$	23,988		$	37,039		$	99,446	$	132,851	$	74,669	$	125,987	$	115,951	$	69,319
Cash and cash equivalents	$	125,665		$	182,072		$	190,636	$	175,397	$	163,368	$	142,426	$	151,707	$	90,790
Total assets (000'S)	$	3,080.6		$	3,127.5		$	3,129.2	$	3,092.9	$	3,071.3	$	3,033.2	$	2,981.7	$	2,005.9
Total non-current liabilities	$	299,920		$	315,979		$	316,510	$	340,202	$	348,663	$	276,180	$	269,984	$	194,679
Total cash costs net of by-product credits silver(3)	—			$	—		$	6.73	$	5.72	$	6.48	$	6.50	$	6.07	$	4.51
Total cash costs net of by-product credits gold(3)	648			$	747		$	601	$	574	$	594	$	625	$	647	$	638
All-in sustaining costs per ounce net of by-product credits silver(3)	—			$	—		$	10.01	$	8.11	$	9.76	$	8.68	$	8.16	$	5.97
All-in sustaining costs per ounce net of by-product credits gold(3)(4)	$	1,033		$	1,088		$	925	$	860	$	945	$	974	$	973	$	825

17

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

⁽¹⁾  Comparative Q1 2016 quarter excludes operational and financial information from the Timmins mine.

⁽²⁾  London Bullion Market Association (LBMA)/London Metal Exchange (LME) average closing prices for each quarter presented.

⁽³⁾  Non-GAAP financial measures are described in the “Non-GAAP Financial Measures” section of this MD&A.

⁽⁴⁾  All-in sustaining costs net of by-product credits per gold ounce produced for Q1 2016, Q2 2016 and Q3 2016 exclude the impact of $0.7 million, $10.3 million and $0.1 million, respectively, in transaction costs related to the acquisition of Lake Shore Gold.

⁽⁵⁾  Included in the 98.1 thousand gold ounces sold during Q2 2016, are 22.1 thousand gold ounces at Shahuindo which include one month of pre-commercial production ounces produced and sold (5.3 thousand ounces of gold in doré sold in the month of April 2016).

⁽⁶⁾  Earnings of $0.3 million for Q4 2016 were negatively impacted by the change in enacted tax rates in Peru, resulting in a charge of approximately $19.3 million to deferred income tax expense. Refer to the Company’s adjusted earnings described and calculated in the “Non-GAAP Financial Measures” section of this MD&A.

⁽⁷⁾  Numbers may not calculate due to rounding.

REVIEW OF QUARTERLY CONSOLIDATED FINANCIAL RESULTS

Variances in results by quarter reflect overall corporate activity and factors that do not necessarily recur each quarter, including operating results, timing of concentrate and doré sales, fluctuations in the amount of finished goods, construction costs, stock based compensation, royalty payments, interest income on fluctuating cash balances, foreign exchange gains (losses), changes in enacted income tax rates and exploration drill programs.

Q4 2017 vs. Q4 2016

The Company generated a loss of $18.0 million for Q4 2017 compared to earnings of $0.3 million for Q4 2016. The earnings for Q4 2017 were negatively impacted by the cessation of mining activities at the Escobal mine which resulted in no material revenue for the quarter from the mine and care and maintenance costs of $11.1 million. This was coupled with increased depreciation expense due to a pre-tax non-cash $11.3 million adjustment in the fourth quarter of 2017 to true-up the depletion related to the Peruvian mines.

The earnings for Q4 2016 were negatively impacted by the $19.3 million non-cash deferred tax charge related to a change in enacted tax rates in Peru offset by the inclusion of results from the Timmins mines and the Shahuindo mine during Q4 2016.

Revenues

During Q4 2017, the Company generated no material revenues from concentrate sales due to the on-going suspension of operations at the Escobal mine. During Q4 2016, the Company sold in concentrate 4.5 million silver ounces at an average realized price of $14.45 compared to1.8 thousand gold ounces at a realized price of $1,050 and 2.3 thousand tonnes of lead and 2.8 thousand tonnes of zinc at realized prices of $2,036 and $2,872 per tonne, respectively.

During Q4 2017, the Company sold 92.8 thousand ounces of gold in doré, at an average realized price of $1,272 per ounce compared to 98.9 thousand ounces of gold in doré at an average realized price of $1,197 per ounce during Q4 2016.

Total revenues decreased by approximately $71.7 million or 38% from $189.4 million to $117.7 million, net of treatment and refining charges during Q4 2017 when compared to Q4 2016. This change was the result of approximately 4.5 million fewer ounces of silver in concentrate sold during the quarter as a result of the suspension of mining operations at Escobal.

Operating costs

Production costs

Production costs, which comprise the full cost of operations less royalties, Escobal care and maintenance and depreciation and depletion, form a component of total operating costs and were $69.3 million for Q4 2017 compared to $91.2 million during Q4 2016. The decrease was primarily due the suspension of mining operations at Escobal.

Royalties

During Q4 2017, royalty expense was $0.9 million, comprised of $(0.4) million in Guatemala and $1.3 million in Canada. This compared to $7.8 million in Q4 2016, comprised of $5.8 million in Guatemala and $2.0 million in Canada. The change in royalties was the result of no production from Escobal during Q4 2017. The negative royalty expense in Guatemala for the quarter was the result of final settlement adjustments in the period to provisional concentrate sales sold during previous quarters.

18

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Royalties paid in Peru were calculated using a form of operating profit and were therefore accounted for as an income tax.

Escobal care and maintenance

Escobal care and maintenance costs, comprised of the cost of maintaining the Escobal mine during the temporary shut down and include environmental and security costs, salaries and legal fees form a component of total operating costs and amounted to $11.1 million for Q4 2017. There were no such costs in the comparative periods.

Depreciation and depletion

During Q4 2017, depreciation and depletion was $41.7 million compared to $42.5 million in Q4 2016. This decrease of $0.8 million was primarily due increased depreciation expense as a result of a pre-tax non-cash $11.3 million adjustment to true-up the depletion related to the Peruvian mines offset by a reduction in depletion at the Escobal mine.

Other operating expenses

Exploration expenses

Exploration expenses were $3.9 million for Q4 2017 compared to $6.9 million in Q4 2016. This $3.0 million decrease was the result of curtailing exploration spending on exploration projects due to the suspension of mining operations at Escobal.

General and administrative expenses

General and administrative expenses were $11.0 million for Q4 2017 compared to $9.5 million for Q4 2016. This $1.5 million increase related primarily to increased professional and consulting fees of $1.0 million in addition to an increase in administrative and other fees of $2.1 million. These increases were offset by a decrease in share based compensation of $0.4 million a decrease in investor relations and communications of $0.3 million and a decrease in salaries and benefits of $0.9 million.

Other expense

Net foreign exchange loss

A foreign exchange loss of $0.3 million was recognized during Q4 2017 compared to a loss of $0.6 million recognized during Q4 2016. The $0.3 million decrease in foreign exchange loss was the result of the depreciation of foreign currencies against the USD including a decrease of $0.5 million related to the Canadian dollar and $0.5 million related to the Guatemalan Quetzal offset by an increase of $0.7 million as a result of the appreciation in the Peruvian Sol against the USD. The Company remains unhedged with respect to foreign currency. Refer to the “Cash flow, liquidity, capital resources and other information – Liquidity, capital resources and financial risk management – Financial risk management – Market risk – Foreign exchange risk” section of this MD&A.

Tax expense

The Company recognized an income tax recovery for Q4 2017 of $3.8 million.

Income tax expense for Q4 2016 was $30.2 million, representing an effective rate of 99%. The effective tax rate in Q4 2016 was impacted by a change in enacted rates in Peru which were previously on a gradual reduction from 28.0% to 26.0% over the course of five years to 2019. This rate reduction was superseded in December 2016 and replaced with an increased statutory rate of 29.5% effective January 1, 2017. The change in rates during Q4 2016 resulted in a non-cash deferred tax expense of $19.3 million. Excluding the impact of the change in tax rate in Peru, the effective rate was 36%.

19

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

SELECTED SEGMENTED OPERATIONAL RESULTS

2017 AND 2016

Selected segmented operational information from continuing operations for 2017 and 2016 is as follows:

	2017/ 2016
	Escobal		La Arena		Shahuindo(4)		Timmins mines		Total
Revenues	$	192,510	$	233,782	$	95,425	$	211,840	$	733,557
	$	355,812	$	244,397	$	47,174	$	137,120	$	784,503
Silver produced (000’s ozs)	9,692		34		116		21		9,863
	21,189		24		54		—		21,267
Gold produced (000’s ozs)	4		196		79		167		446
	11		204		49		122		385
Silver sold (000’s ozs)	9,951		29		112		21		10,113
	18,996		22		47		—		19,065
Gold sold (000’s ozs)	3		188		75		169		435
	8		199		44		108		358
Average realized price(1) (per oz)
Silver	$	17.71	$	—	$	—	$	—	$	17.71
	$	17.57	$	—	$	—	$	—	$	17.57
Gold	$	1,294	$	1,233	$	1,246	$	1,243	$	1,239
	$	1,291	$	1,227	$	1,258	$	1,272	$	1,245
Costs per ounceproduced(2)(3)
Total cash costs net of by-product credits silver	$	6.15	$	—	$	—	$	—	6.15
	$	5.84	$	—	$	—	$	—	$	5.84
Total cash costs net of by-product credits gold	$	—	$	599	$	668	$	678	$	641
	$	—	$	596	$	775	$	615	$	620
All-in sustaining costs net of by-product credits silver	$	8.91	$	—	$	—	$	—	$	8.91
	$	8.06	$	—	$	—	$	—	$	8.06
All-in sustaining costs net of by-product credits gold	$	—	$	837	$	1,124	$	1,062	$	973
	$	—	$	837	$	1,162	$	1,057	$	943

⁽¹⁾  The realized price is for silver sold in concentrate and the realized price is for gold sold in doré.

⁽²⁾  Non-GAAP financial measures are described in the “Non-GAAP Financial Measures” section of this MD&A.

⁽³⁾  Total cash cost per silver ounce produced at the Escobal mine and total cash cost per gold ounce produced at the La Arena, Shahuindo and Timmins mines, are net of by-product credits. For a reconciliation to cash costs before by-product credits, refer to the “Non-GAAP Financial Measures” section of this MD&A.

⁽⁴⁾  Commercial production at Shahuindo was declared on May 1, 2016. Revenues presented are generated from the sale of gold ounces in doré beginning May 1, 2016. Pre-commercial production revenues at Shahuindo were considered pre- operating revenues and 44.3 thousand gold ounces sold at Shahuindo for 2016 as presented include four months of pre- commercial production ounces produced and sold (13.4 thousand gold ounces in doré produced and 7.6 thousand ounces of gold in doré sold for the period of January through April 2016).

⁽⁵⁾  Numbers may not calculate due to rounding.

20

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Selected quarterly segmented operational information from continuing operations for Q4 2017 and Q4 2016 is as follows:

	Q4 2017 / Q4 2016
	Escobal			La Arena		Shahuindo		Timmins mines		Total
Revenues	$	(844	)	$	49,873	$	24,415	$	44,290	$	117,734
	$	70,527		$	62,555	$	16,084	$	40,232	$	189,398
Silver produced (000’s ozs)	—			9		24		5		38
	4,802			5		20		5		4,832
Gold produced (000’s ozs)	—			47		19		40		106
	2			58		14		45		120
Silver sold (000’s ozs)	—			7		34		5		46
	4,468			7		21		5		4,501
Gold sold (000’s ozs)	—			39		19		35		93
	2			53		13		33		101
Average realized price(1) (per oz)
Silver	$	—		$	—	$	—	$	—	$	—
	$	14.45		$	—	$	—	$	—	$	14.45
Gold	$	—		$	1,257	$	1,271	$	1,275	$	1,266
	$	—		$	1,180	$	1,224	$	1,216	$	1,197
Costs per ounce produced(2)(3)
Total cash costs net of by-product credits silver	$	—		$	—	$	—	$	—	$	—
	$	6.48		—		—		—		$	6.48
Total cash costs net of by-product credits gold	$	—		$	520	$	737	$	756	$	648
	$	—		$	516	$	989	$	575	$	594
All-in sustaining costs net of by-product credits silver	$	—		$	—	$	—	$	—	$	—
	$	9.76		—		—		—		$	9.76
All-in sustaining costs net of by-product credits gold	$	—		$	855	$	1,313	$	1,112	$	1,033
	$	—		$	787	$	1,508	$	976	$	945

⁽¹⁾  The realized price is for silver sold in concentrate and the realized price is for gold sold in doré.

⁽²⁾  Non-GAAP financial measures are described in the “Non-GAAP Financial Measures” section of this MD&A.

⁽³⁾  Total cash cost per silver ounce produced at the Escobal mine and total cash cost per gold ounce produced at the La Arena, Shahuindo and Timmins mines, are net of by-product credits. For a reconciliation to cash costs before by-product credits, refer to the “Non-GAAP Financial Measures” section of this MD&A.

⁽⁴⁾  Numbers may not calculate due to rounding.

21

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

MINE OPERATIONS

Escobal mine

	Q4 2017			Q4 2016			2017			2016
Tonnes Milled (000’s)	—			396			688			1,594
Average Tonnes Milled (tpd)	—			4,299			4,352			4,356
Average Metal Grades
Silver (g/t)	—			434			507			477
Gold (g/t)	—			0.32			0.33			0.35
Lead	—		%	0.73		%	0.71		%	0.72		%
Zinc	—		%	1.18		%	1.16		%	1.19		%
Average Metal Recovery(1)
Silver	—		%	87		%	86		%	87		%
Gold	—		%	59		%	60		%	60		%
Lead	—		%	87		%	86		%	87		%
Zinc	—		%	80		%	76		%	79		%
Recovered Metal(2)
Silver Ounces (000’s)	—			4,802			9,692			21,189
Gold Ounces(000’s)	—			2.4			4.3			10.7
Lead Tonnes (000’s)	—			2.5			4.2			10.0
Zinc Tonnes (000’s)	—			3.7			6.1			15.0
Costs Per Ounce Silver Produced(3)
Total cash costs per ounce before by-product credits	$	—		$	9.42		$	9.22		$	8.44
Total cash costs per ounce net of by-product credits	$	—		$	6.48		$	6.15		$	5.84
All-in sustaining costs per ounce net of by-product credits	$	—		$	9.76		$	8.91		$	8.06
Capital Expenditures	$	2,154		$	10,888		$	22,901		30,077
Sustaining Capital	$	2,154		$	10,295		$	22,901		$	27,030
Non-Sustaining Capital	$	—		$	593		$	—		$	3,047

⁽¹⁾  Percent silver and gold recovered into lead and zinc concentrates; percent lead recovered into lead concentrate; percent zinc recovered into zinc concentrate.

⁽²⁾  Silver and gold contained in lead and zinc concentrates; lead contained in lead concentrate; zinc contained in zinc concentrate.

⁽³⁾  Non-GAAP financial measures are described in the “Non-GAAP Financial Measures” section of this MD&A in addition to a reconciliation to cash costs before by-product credits.

⁽⁴⁾  Numbers may not calculate due to rounding.

Property overview

The Escobal mine is located in the Department of Santa Rosa of southeast Guatemala, about 40 km east-southeast of Guatemala City. Operations have been temporarily suspended while the Constitutional Court reviews the September 10, 2017 ruling of the Supreme Court. Additionally, the roadlock at Casillas (approximately 16km from the mine entrance) prevents access of supplies into and concentrate out of the mine. The Company's expired export credential is pending renewal and reissue by MEM. During normal operations, underground longhole stoping methods are utilized to mine the intermediate sulfidation silver-gold-lead-zinc mineralization at a rate of approximately 4500 tpd. Processing by differential flotation produces precious metal rich lead concentrates and zinc concentrates for sale to international smelters.

Proven and Probable Mineral Reserves at the Escobal mine as of January 1, 2018 totaled 24.7 million tonnes at an average silver grade of 334 grams per tonne (“g/t”) containing 264 million ounces of silver, with significant quantities of gold and base metals.

22

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Financial and cost per ounce overview

In Q4 2017 there were no concentrate sales. Final settlements of sales that originated before the mining operations were suspended generated $(0.8) million in revenues at mine operating costs of $12.3 million, including care and maintenance, resulting in a mine operating loss of $13.2 million. Concentrate sales for Q4 2016 generated $70.5 million in revenues at operating costs of $52.5 million resulting in mine operating earnings of $18 million. All costs incurred from the date that mining operations were suspended have been in included in the care and maintenance line within production costs. No material revenues for Escobal have been recorded since the beginning of the third quarter.

2017 concentrate sales generated $192.5 million in revenues at mine operating costs of $130.2 million resulting in mine operating earnings of $62.3 million. Concentrate sales for 2016 generated $355.8 million in revenues at operating costs of $200.5 million resulting in mine operating earnings of $155.3 million.

Due to the suspension of mining operations, total cash costs net of by-product credits for Q4 2017 were nil per ounce compared to $6.48 per ounce for Q4 2016. All-in sustaining costs for Q4 2017 were nil per ounce compared to $9.76 per ounce in Q4 2016.

Total cash costs net of by-product credits for 2017 were $6.15 per ounce compared to $5.84 per ounce for 2016, an increase of $0.31 per ounce or 5%. All-in sustaining costs for 2017 were $8.91 per ounce compared to $8.06 per ounce in 2016, an increase of $0.85 per ounce, or 11%.

Total cash costs net of by-product credits and all-in sustaining costs per ounce calculations are described in the “Non-GAAP Financial Measures” section of this MD&A.

Underground development and production

Due to the blockade in Casillas, ongoing disputes on the suspension of the mining license, the failure by MEM to reissue the annual export credential prior to its expiration, the Escobal Mine remained on standby in the fourth quarter. There was no ore production, development or paste fill operations during this time, although a limited amount of rehabilitation work was conducted in the fourth quarter. Activities in the mine operations department focused on care and maintenance and planning for future operational logistics and efficiencies.

Mill performance

No ore was milled during the Q4 2017. Mill crews continue with maintenance work, including cleaning, inspections and pump maintenance.

There are approximately nine thousand tonnes of crushed ore in storage and approximately 60 thousand tonnes of run-of-mine ore on the surface available to expedite the restart of the mill.

Capital projects

Capital projects for the quarter were primarily related to equipment rebuilds started prior to the suspension of operations and mine infrastructure rehabilitation.

23

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

La Arena mine

	Q4 2017		Q4 2016		2017		2016
Tonnes Ore Mined (000’s)	3,114		4,246		12,792		15,669
Strip Ratio	1.5		1.7		1.9		2.1
Tonnes Placed on Pads(1) (000’s)	3,111		4,479		12,868		15,331
Average Gold Grade(g/t)	0.49		0.47		0.49		0.49
Gold Ounces Placed on Pads (000’s)	49		68		203		241
Gold Ounces Recovered (000’s)	47		58		196		204
Costs Per Ounce Gold Produced(2)
Total cash costs per ounce before by-product credits	$	523	$	518	$	602	$	598
Total cash costs per ounce net of by-product credits	$	520	$	516	$	599	$	596
All-in sustaining costs per ounce net of by-product credits	$	855	$	684	$	837	$	837
Capital Expenditures	$	12,013	$	13,685	$	32,019	$	35,633
Sustaining Capital	$	12,013	$	13,560	$	32,019	$	35,272
Non-Sustaining Capital(3)	$	—	$	125	$	—	$	361

⁽¹⁾  Tonnes placed on pads include tonnes of ore mined and tonnes from stockpile.

⁽²⁾  Non-GAAP financial measures are described in the “Non-GAAP Financial Measures” section of this MD&A. For a reconciliation to cash costs before by-product credits, refer to the “Non-GAAP Financial Measures” section of this MD&A.

⁽³⁾  Non-sustaining capital excludes non-sustaining capital related to the La Arena II Project.

⁽⁴⁾  Numbers may not calculate due to rounding.

Property overview

The La Arena gold mine is located in the Huamachuco District of northern Peru, 480 km north-northwest of Lima. Operations are currently exploiting high sulfidation epithermal oxide gold mineralization hosted in brecciated sandstone within the Chimu Formation by open pit methods using conventional drill/blast, load and haul methods. Ore is truck-dumped onto leach pads with no crushing or agglomeration required prior to leaching. Metal recovery is by carbon-in-column absorption-desorption-regeneration processes which produce a gold-rich doré for sale to international bullion banks and traders.

Proven and Probable oxide Mineral Reserves at the La Arena mine as of January 1, 2018 totaled 44.0 million tonnes at an average gold grade of 0.40 g/t containing 568 thousand ounces of gold.

Financial and cost per ounce overview

Q4 2017 gold sales generated $49.9 million in revenues at mine operating costs of $58.1 million resulting in a mine operating loss of $8.2 million. Q4 2016 gold sales generated $62.6 million in revenues at mine operating costs of $36.1 million resulting in mine operating earnings of $26.5 million. Q4 2017 operating costs include a pre-tax non-cash adjustment to true-up the depletion related to the La Arena mine.

2017 gold sales generated $233.8 million in revenues at mine operating costs of $174.5 million resulting in mine operating earnings of $59.3 million. 2016 gold sales generated $244.4 million in revenues at mine operating costs of $143.0 million resulting in mine operating earnings of $101.4 million.

Total cash costs net of by-product credits for Q4 2017 were $520 per ounce compared to $516 per ounce for Q4 2016, an increase of $4 per ounce, or 1%. All-in sustaining costs for Q4 2017 were $855 per ounce compared to $684 per ounce for Q4 2016, an increase of $171 per ounce, or 25%.

Total cash costs net of by-product credits for 2017 were $599 per ounce compared to $596 per ounce for 2016. All-in sustaining costs for 2017 were $837 per ounce compared to $837 per ounce for 2016. 2017 total cash costs included a non-recurring pre-tax expense in the third quarter of $9.0 million as a result of completing negotiations to fulfill a historical commitment made to the community. Q1 2017 changes to production reporting to include in-carbon gold inventory as well as gold poured in doré resulted in a one-time impact to

24

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

production of 6.6 thousand ounces of in-carbon inventory and decreased total cash costs net of by-product credits and all-in sustaining costs by $21 and $29 per ounce, respectively.

Total cash costs net of by-product credits and all-in sustaining costs per ounce calculations are described in the “Non-GAAP Financial Measures” section of this MD&A.

Pit development and production

Production from the Calaorco pit totaled 3.1 million and 12.8 million tonnes of ore at an average strip ratio of 1.5 and 2.0 during Q4 2017 and Q4 YTD 2017, respectively. A total of 3.1 million and 12.9 million tonnes at average gold grades of 0.49 g/t and 0.49 g/t containing 49.4 thousand and 203.3 thousand gold ounces were placed on the leach pads during Q4 2017 and Q4 YTD 2017, respectively.

Mining operations continue to be focused in the Phase 4, Phase 5 and Phase 6 areas of the Calaorco pit. Ore is currently being produced from Phase 4 and Phase 5, with Phase 6 under development.

Absorption, desorption and regeneration process plant

The absorption, desorption and regeneration process plant performed well with an average of 13.4 hectares under irrigation throughout Q4 2017. The La Arena plant recovered 47.2 thousand and 195.6 thousand ounces of gold during Q4 2017 and Q4 YTD 2017. Gold recovery continued to be approximately 86%.

Capital projects

Construction of leach pad 4C and the south waste dump phase 3B continued in Q4 2017 as planned in support of life of mine operations. Both construction projects are expected to be completed in early Q2 2018.

Shahuindo mine

	Q4 2017		Q4 2016		2017		2016
Tonnes Ore Mined (000’s)	1,822		1,522		6,479		5,531
Strip Ratio	0.8		0.8		1.0		0.7
Tonnes Placed on Pads(1) (000’s)	1,574		722		5,360		3,153
Average Gold Grade(g/t)	0.57		0.89		0.61		0.87
Gold Ounces Placed on Pads(2)(3) (000’s)	29		21		105		88
Gold Ounces Recovered(2)(3) (000’s)	19		14		79		49
Costs Per Ounce Gold Produced(3)(4)
Total cash costs per ounce before by-product credits	$	768	$	1,014	$	692	$	796
Total cash costs per ounce net of by- product credits	$	737	$	989	$	668	$	775
All-in sustaining costs per ounce net of by-product credits	$	1,313	$	1,513	$	1,124	$	1,162
Capital Expenditures	$	25,007	$	11,467	$	69,352	$	63,893
Sustaining Capital	$	7,388	$	2,307	$	22,222	$	10,956
Non-Sustaining Capital	$	17,619	$	9,160	$	47,130	$	52,937

⁽¹⁾  Tonnes placed on pads include tonnes of ore mined and tonnes from stockpile.

⁽²⁾  Commercial production at Shahuindo was declared on May 1, 2016. The 88.2 thousand gold ounces placed on pads and the 48.5 thousand gold ounces produced in doré at Shahuindo for 2016 include pre-commercial production ounces placed on pads and produced in doré (34.1 thousand gold ounces placed on pads and 13.4 thousand gold ounces in doré produced in the period of January through April 2016, respectively).

⁽³⁾  2016 costs per ounce gold produced were calculated based on the eight months of operational results after the declaration of commercial production on May 1, 2016.

⁽⁴⁾  Non-GAAP financial measures are described in the “Non-GAAP Financial Measures” section of this MD&A. For a reconciliation to cash costs before by-product credits, refer to the “Non-GAAP Financial Measures” section of this MD&A.

⁽⁵⁾  Numbers may not calculate due to rounding.

25

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Property overview

The Shahuindo mine is located in the province of Cajabamba in northern Peru, approximately 510 km north-northwest of Lima and 30 km north of the Company’s La Arena mine. Operations are exploiting an intermediate-sulfidation sediment-hosted epithermal gold deposit by open pit methods using conventional drill/blast, load and haul methods. Ore is currently truck-dumped onto leach pads with plans to implement crushing and agglomeration of the ore prior to leaching in early 2018. Metal recovery is by carbon-in-column absorption-desorption-regeneration processes which produce a gold-rich doré for sale to international bullion banks and traders. The mine is currently operating at a rate of 10,000 tpd and scheduled to increase to 36,000 tpd by the end of 2018 (see also “Future Developments – 2018 guidance” section in this MD&A and “Capital Projects” below). The Company declared commercial production at Shahuindo in May 2016.

Proven and Probable oxide Mineral Reserves at the Shahuindo mine as of January 1, 2018 totaled 127.8 million tonnes at an average gold grade of 0.46 g/t containing 1.9 million ounces of gold. Exploration success in 2017 at targets proximal to the Shahuindo pit replaced gold ounces mined in 2017 and added approximately 50 thousand additional gold ounces to the 2018 Mineral Reserve.

Financial and cost per ounce overview

Q4 2017 gold sales generated $24.4 million in revenues at mine operating costs of $10.7 million resulting in mine operating earnings of $13.8 million. 2017 gold sales generated $95.4 million in revenues at mine operating costs of $65.3 million resulting in mine operating earnings of $30.1 million. Gold sales generated $16.1 million in revenues at mine operating costs of $18.9 million resulting in a mine operating loss of $2.8 million for Q4 2016. 2016 gold sales generated $47.2 million in revenues at mine operating costs of $35.1 million resulting in mine operating earnings of $12.0 million. Q4 2017 operating costs include a pre-tax non-cash adjustment to true-up the depletion related to the Shahuindo mine.

Total cash costs net of by-product credits and all-in sustaining costs net of by-product credits for Q4 2017 were $737 and $1,313 per ounce, respectively compared to $989 and $1,513 for Q4 2016, respectively. The decrease in total cash costs net of by-product credits was the result of increased gold production and operational and cost efficiencies gained in the second year of operations.

Total cash costs net of by-product credits and all-in sustaining costs net of by-product credits for 2017 were $668 and $1,124 per ounce, respectively, compared to $775 and $1,162 for 2016, respectively. The decrease in total cash costs net of by-product credits was the result of the ramp up in production levels compared to the prior year during which the leach pad inventory was initially recognized. All-in sustaining costs per ounce decreased primarily as a result of a full year of operations resulting in increased gold production period on period. Changes to production reporting in Q1 2017 to include in-carbon gold inventory as well as gold poured in doré resulted in a one-time impact to production from the initial recognition of 2.4 thousand ounces of in-carbon gold inventory and decreased total cash costs net of by-product credits and all-in sustaining costs by $21 and $35 per ounce, respectively.

Total cash costs net of by-product credits and all-in sustaining costs per ounce calculations are described in the “Non-GAAP Financial Measures” section of this MD&A.

Pit development and production

Production from the Shahuindo pit totaled 1.8 million and 6.5 million tonnes of ore at an average strip ratio of 0.83 and 1.0 during Q4 2017 and Q4 YTD 2017, respectively. A total of 1.6 million and 5.4 million tonnes at average gold grades of 0.57 g/t and 0.61 g/t containing 28.9 thousand and 105.1 thousand gold ounces were placed on the leach pads during Q4 2017and Q4 YTD 2017, respectively.

Absorption, desorption and refining process plant

The Shahuindo plant recovered 18.6 thousand and 79.0 thousand ounces of gold during Q4 2017 and Q4 YTD 2017, respectively. Primary leaching is focused on Pad 2A which resulted in faster than expected leach cycles attributable to optimized coarse/fine ore blending. The average area under leach was approximately 8 hectares during Q4 2017. Overall gold recovery increased from 58% in January to 64% at the end of Q4 2017, in line with the ramp up to an ultimate recovery of 67% for run-of-mine material.

Capital projects

Construction of leach Pad 2B continued in Q4 2017 as planned. Pad 2B is scheduled to be placed into production in Q3 2018.

26

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Commissioning of the 12,000 tpd crushing and agglomeration circuit continued in Q4 as scheduled.  Completion of commissioning was delayed due to ground settling in the area of the overland conveyor head-pulley as well as other mechanical/electrical items common during commissioning of process equipment. At this time no significant impact to 2018 gold production or to the 24,000 tpd crushing and agglomeration circuit construction is anticipated. Engineering and procurement for the 24,000 tpd circuit proceeded as planned in Q4 2017 and the majority of purchase contracts have been finalized. Construction of the 24,000 tpd circuit has begun with commissioning of the full 36,000 tpd plant scheduled for mid-year 2018 providing an expected 80% ultimate recovery, in line with the pre-feasibility study.

Additional water capacity was developed in Q4 and is in the final stages of permitting for production and is expected to be available in time for production ramp up to 36,000 tpd by the end of 2018.

Of the $80 million guidance for the crushing and agglomeration circuit, approximately $48.8 million has been spent through December 31, 2017 ($5.3 million spent in Q4 2017 and $35.6 million spent in 2017). Of the remaining amount, the Company has $5.5 million in commitments and an additional $26.6 million forecast to be spent to complete the expansion to full 36,000 tpd circuit capacity. The project remains on schedule and within guidance.

Timmins mines

	Q4 2017			Q4 2016			2017			2016
Tonnes Ore Mined (000’s)	345			334			1,368			941
Tonnes Ore Milled (000’s)	346			335			1,357			938
Average Tonnes Milled (tpd)	3,764			3,643			3,719			3,410
Average Gold Grade(g/t)	3.74			4.38			3.97			4.19
Average Gold Recovery	96		%	96		%	96		%	96		%
Gold Ounces Recovered (000’s)	40			45			167			122
Costs Per Ounce Gold Produced(1)
Total cash costs per ounce before by-product credits	$	759		$	576		$	680		$	617
Total cash costs per ounce net of by-product credits	$	756		$	575		$	678		$	615
All-in sustaining costs per ounce net of by-product credits	$	1,112		$	976		$	1,062		$	1,057
Capital Expenditures(2)	$	22,804		$	25,005		$	98,775		$	81,772
Sustaining Capital	$	10,565		$	15,714		$	46,826		$	45,123
Non-Sustaining Capital	$	12,239		$	9,291		$	51,949		$	36,649

⁽¹⁾  Non-GAAP financial measures are described in the “Non-GAAP Financial Measures” section of this MD&A which also includes reconciliation to cash costs before by-product credits.

⁽²⁾  Capital expenditures for 2016 in the Timmins mines segment includes the acquired 2% net smelter return (“NSR”) royalty related to production at the Bell Creek mine of $13.7 million.

⁽³⁾  2016 includes results from the Timmins mines beginning April 1, 2016, the date of acquisition of Lake Shore Gold. Results prior to the acquisition date of April 1, 2016 are excluded.

⁽⁴⁾  Numbers may not calculate due to rounding.

Property overview

Timmins mines consist of two mining operations: Bell Creek and Timmins West, both of which feed the Bell Creek Mill.

Bell Creek

The Bell Creek mine is located in Hoyle Township, Ontario, Canada, approximately 20 km northeast of the town of Timmins. Operations are exploiting steeply-dipping shear-hosted sulfide gold mineralization by underground longhole mining methods at a rate of approximately 1,100 tpd. Ore is processed at the Bell Creek mill.

27

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Proven and Probable Mineral Reserves at the Bell Creek mine as of January 1, 2018 totaled 2.4 million tonnes at an average gold grade of 4.1 g/t containing 315 thousand ounces of gold, representing a 29% increase in gold ounces relative to the 2017 Mineral Reserve estimate net of 2017 mining depletion.

Timmins West

The Timmins West mine property is located in Bristol, Thorneloe and Carscallen Townships, Ontario, Canada, approximately 19 km west of the town of Timmins. The Timmins West mine is comprised of the Timmins deposit, Thunder Creek deposit, and the 144 Gap deposit. Operations are exploiting zones of steeply-dipping sulfide gold mineralization occurring within or along favorable lithostructural occurrences associated with regional shear zones at a rate of approximately 2600 tpd by longhole stoping methods. Ore is trucked to the Bell Creek mill for processing.

Proven and Probable Mineral Reserves at the Timmins West mine as of January 1, 2018 totaled 6.5 million tonnes at an average gold grade of 3.2 g/t containing 654 thousand ounces of gold.

Bell Creek Mill

The Bell Creek mill processes ore from both the Timmins West mine and the Bell Creek mine. Ore is processed by single-stage crushing and single stage grinding, with a portion of the gold recovered by gravity methods, followed by pre-oxidation and cyanidation with carbon-in-leach and carbon-in-pulp recovery.

Financial and cost per ounce overview

Q4 2017 gold sales generated $44.3 million in revenues at mine operating costs of $41.9 million resulting in mine operating earnings of $2.4 million. 2017 gold sales generated $211.8 million in revenues at mine operating costs of $171.6 million resulting in mine operating earnings of $40.2 million. Gold sales generated $40.2 million in revenues at mine operating costs of $34.0 million resulting in mine operating earnings of $6.2 million during Q4 2016 while 2016 gold sales generated $137.1 million in revenues at mine operating costs of $101.7 million resulting in mine operating earnings of $35.4 million.

Total cash costs net of by-product credits for Q4 2017 were $756 per ounce compared to $575 per ounce for Q4 2016. All-in sustaining costs for Q4 2017 were $1,112 per ounce compared to $976 per ounce during Q4 2016. These metrics have increased primarily due to the production of approximately five thousand fewer ounces in Q4 2017 compared to Q4 2016.

Total cash costs net of by-product credits for 2017 were $678 per ounce compared to $615 per ounce for 2016. All-in sustaining costs for 2017 were $1,062 per ounce compared to $1,057 per ounce during 2016.

Total cash costs net of by-product credits and all-in sustaining costs per ounce calculations are described in the “Non-GAAP Financial Measures” section of this MD&A.

Underground development and production

Bell Creek

Underground ramp and sublevel development continues to advance in support of the life-of-mine production schedule, with approximately 2,980 meters and 11,200 meters of development completed in Q4 2017 and Q4 YTD 2017, respectively. Infill and definition drilling at the Bell Creek mine totaled 8,600 metres and 47,400 metres in Q4 2017 and Q4 YTD 2017, respectively.

The Bell Creek mine delivered 105 thousand and 352 thousand tonnes of ore to surface, mined from longitudinal longhole stopes on multiple production sublevels during Q4 2017 and Q4 YTD 2017, respectively.

Timmins West

Underground ramp and sublevel development continues to advance in support of the life-of-mine production schedule, with approximately 2,300 meters and 10,600 meters of development completed in Q4 2017 and Q4 YTD 2017. Progress continued to be made on the infrastructure development at 144 Gap which included ramp, raise and lateral development to access the resource. Underground infill and definition drilling completed at the Timmins West mine in Q4 2017 and Q4 YTD 2017 to improve resource/reserve definition totaled 26,100 meters and 118,300 meters, respectively.

28

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

The Timmins West mine delivered approximately 0.2 million and 1.0 million tonnes of ore to surface, mined from longitudinal and transverse longhole stopes on multiple production sublevels from the Timmins West, Thunder Creek and 144 Gap deposits during Q4 2017 and Q4 YTD 2017, respectively.

Mill processing

Mill operations averaged 3,795 tpd and 3,716 tpd in Q4 2017 and Q4 YTD 2017, respectively. The mill processed a total of 0.3 million and 1.3 million tonnes with an average gold feed grade of 3.74 g/t and 3.97 g/t recovering 40.0 thousand and 167.0 thousand gold ounces in Q4 2017 and Q4 YTD 2017, respectively. Process recovery for Q4 2017 and Q4 YTD 2017 averaged 96.3% and 96.4%, respectively.

Capital projects

The Bell Creek shaft project remains on schedule and in line with guidance. Excavation of the third and final pilot raise from the shaft bottom is complete and slashing of this raise to the final dimensions has begun. Pilot raises for the underground ore and waste bins are complete and slashing of the raises is underway. Surface construction is focused primarily on the hoist room and headframe. Mechanical installation of the hoists started in early February and the headframe civil work is progressing with a projected start of steel installation by the end of Q1 2018.

Of the $80 million guidance for the Bell Creek shaft project, approximately $51.6 million has been spent to December 31, 2017 ($10.2 million spent in Q4 2017 and $43.3 million spent in 2017). Of the remaining amount, the Company has $14.3 million in commitments with the balance expected to be spent in 2018. The project remains on schedule and within guidance.

PROJECTS

La Arena II

La Arena II is a large-tonnage copper-gold porphyry deposit located in close proximity to the currently producing oxide gold deposit at the La Arena mine in Peru.

The Company has completed work on a La Arena II PEA. See the Recent Developments section of this MD&A as well as the press release issued February 20, 2018 available on the Company's website at www.tahoeresources.com.

Fenn-Gib

The Fenn-Gib deposit is an advanced stage exploration project located 80 km east of Timmins. A 2011 Mineral Resource estimate contained 1.3 million ounces of gold (40.8 million tonnes at 0.99 g/t Au) in the Indicated category and 0.75 million ounces of gold (24.5 million tonnes at 0.95 g/t Au) in the Inferred category.

No drilling was completed at the property in Q4 2017, though 37,692 meters of infill and extensional drilling was completed earlier in the year. Work is currently underway to update the geologic and resource models as well as to finalize results from a first phase of metallurgical test work.

EXPLORATION

Guatemala

No exploration drilling has been conducted at Escobal since June 13, 2017. Drilling YTD until the project was suspended amounted to seven holes for 3,731 meters. Underground exploration drilling is planned to resume once mine operations re-commence. Guatemala exploration expenditures totaled $0.1 million and $0.7 million during Q4 2017 and 2017, respectively. (Q4 2016 and 2016: $0.3 million and $1.0 million, respectively).

Peru

Exploration activity in Peru during Q4 2017 concentrated on a number of satellite targets at the Shahuindo mine and drilling the deep oxide zone ("La Arena Phase VIII") below the existing La Arena LOM pit. In addition, early-staged exploration advanced on regional targets surrounding both the La Arena and Shahuindo resource areas.

Exploration during Q4 2017 at Shahuindo focused on step-out drilling, definition of margins of the current resource and identification of new target areas in the La Chilca zone on the extreme northwest margin of the

29

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Shahuindo resource. Drilling in this area totaled 4 holes for 468 metres in Q4 and 83 holes for 13,687 metres in 2017. Exploration drilling added definition and generally corroborated prior modeling in this area.

Reconnaissance prospecting and sampling in the North Corridor 1.2 to 1.5 km north of Shahuindo recently identified drill targets in the Tabacos, Alisos and Azules zones. Targets in these areas comprise wide zones of oxidized sandstone that have received little to no prior drilling in the past. Drilling commenced in the North Corridor during the quarter with a total of 9 holes for 1,931 metres completed in Q4 2017.

At La Arena, drilling the deep oxide zone below the Calaorco pit (La Arena Phase VIII) continued with two drills completing 4 holes for 1,303 metres in Q4 2017 and 2017. Field mapping and sampling continued at the Agua Blanca project area east of La Arena.

Peru exploration expenditures totaled $1.5 million and $7.0 million for Q4 2017 and 2017, respectively (Q4 2016 and 2016 expenditures of $2.9 million and $6.6 million, respectively).

Canada

In Canada a total of 14,171 metres (114,504 metres in 2017) of exploration drilling was completed throughout the region during Q4 2017. This exploration is part of the Company’s long-term strategy to grow gold Mineral Reserves and/or Mineral Resources. Exploration expenses in Canada amounted to $2.4 million and $10.6 million, respectively, for Q4 2017 and 2017 (Q4 2016 and 2016: $3.7 million and $6.8 million, respectively).

Timmins West Complex

Drilling at the Timmins West Complex in Q4 2017 focused on the Thunder Creek Deposit and Gold River Trend Project.

Exploration at Thunder Creek in Q4 included drilling of four holes (2,222 metres) (4,277 meters in 2017) to test for potential extensions of the Rusk and Porphyry Zones between the 1,000m and the 1,300m levels (approximately 300 metres below the resource). Logging and analysis of the drill core from the four holes is currently in progress.

Exploration at Gold River Trend project in Q4, included drilling of 9,519 metres (18,567 metres in 2017) to provide additional deposit definition and collect material for metallurgical, ore sorting and mineralogical test work samples.

Q4 2017 YTD drilling in the Timmins West complex totaled 45,605 metres, which includes drilling in the 144 Trend and deep Timmins Mine areas earlier in the year.

Bell Creek Complex

Exploration at the Bell Creek Complex in Q4 2017 included 8 underground holes for 780 metres (6,976 metres in 2017) to test below the current HW6 resource and follow-up on a potential extension of the NA4 and NA3 structures in the upper part of the mine.

In addition, surface drilling was carried out at the Wetmore property, located 900 metres south of the Bell Creek Mine. A total of six holes for 1,650 metres were completed in Q4 (10,286 metres in 2017) to better define new zones of shallow mineralization (within 200 metres of surface) at the Wetmore East and West target areas. Work to compile the new results and estimate a resource for this area is in progress.

2017 drilling in the Bell Creek complex totaled 24,138 metres, which included drilling in the Vogel, Stringer and other satellite zones earlier in the year.

Whitney Project

The Whitney project is currently a joint venture project covering the historic Hallnor and Broulan Reef Mine properties in which the Company is operator.

Work on the project in the quarter included a continuation of studies to evaluate potential underground and open pit resources and mining scenarios. No drilling was completed at the property in Q4 2017 (7,069 metres in 2107).

30

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

2017 drilling at the Whitney project totaled 7,069 metres, which included drilling to evaluate near surface and deep underground targets in the Halnor area earlier in the year.

Juby

Juby is a large near-surface deposit located in the Shining Tree Area of Northern Ontario, near the town of Gowganda, approximately 100 kilometres south of Timmins. A 2014 Mineral Resource estimate contained 26.6 million tonnes at an average gold grade of 1.28 grams per tonne for 1.1 million ounces of gold in the Indicated category and 96.2 million tonnes at an average gold grade of 0.94 grams per tonne for 2.9 million ounces of gold in the Inferred category.

Work in Q4 2017 at Juby included review of the current resource model as well as a reconnaissance mapping and sampling program to evaluate potential new exploration targets on the property. Drilling is expected to begin in early 2018.

CASH FLOW, LIQUIDITY, CAPITAL RESOURCES AND OTHER INFORMATION

CASH FLOW

2017 vs. 2016

Cash provided by operating activities totaled $234.3 million for 2017, compared to $249.5 million for 2016. Cash provided by operating activities before changes in working capital was $287.0 million for 2017, compared to $385.9 million for 2016 primarily due to operations being suspended at the Escobal mine for the second half of 2017.

Investing activities consisted of additions to property, plant, and equipment of $224.1 million during 2017, compared to $190.9 million during 2016. Investment activities in 2017 included on-going leach pad and waste dump construction at La Arena and Shahuindo and construction of the Bell Creek shaft project, tailings impoundment expansion at Bell Creek, resource infill and stope definition drilling at the Timmins mines, ongoing development at Escobal during the first six months of 2017, and various infrastructure construction including the crushing and agglomeration circuit and other expansion activities at Shahuindo. The 2016 additions were offset by $70.2 million in cash acquired through the Lake Shore Gold acquisition on April 1, 2016.

Financing activities resulted in a cash outflow of $47.5 million during 2017 compared to an outflow of $72.9 million during 2016. The 2017 outflow was primarily due to $35.7 million cash payment of dividends, a $2.6 million payment of interest and financing fees and $9.5 million in payments on the finance leases. These outflows were partially offset by $0.9 million in proceeds from the issuance of common shares on exercise of share options. The 2016 outflow was primarily due to $67.0 million relating to the cash payment of dividends, $22.3 million in payments on the finance leases which were offset by $19.8 million in proceeds from the issuance of common shares on the exercise of stock options.

Q4 2017 vs. Q4 2016

Cash provided by operating activities before changes in working capital was $24.0 million for Q4 2017, compared to $74.7 million for Q4 2016. This $50.7 million decrease was primarily due to a decrease in sales of approximately 4.5 million ounces of silver in concentrate due to the temporary suspension of operations at the Escobal mine. Cash provided by operating activities totaled $18.1 million for Q4 2017, compared to $107.8 million for Q4 2016.

Investing activities consisted of additions to property, plant, and equipment of $70.1 million during Q4 2017, compared to $64.4 million during Q4 2016. Investment activities included on-going leach pad and waste dump construction at La Arena and Shahuindo and construction of the Bell Creek shaft project, tailings impoundment expansion at Bell Creek, resource infill and stope definition drilling at the Timmins mines, and various infrastructure construction including the crushing and agglomeration circuit and other expansion activities at Shahuindo.

Financing activities resulted in a cash outflow of $3.0 million during Q4 2017 compared to a cash outflow of $20.2 million during Q4 2016. The Q4 2017 outflow was primarily due to $2.1 million in payments on finance leases. The Q4 2016 outflow was primarily due to the $16.3 million cash payment of dividends, a $0.1 million payment of financing fees, $3.1 million in payments on the finance leases and $0.8 million in other financing

31

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

activities. These outflows were partially offset by $0.2 million in proceeds from the issuance of common shares on exercise of share options.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL RISK MANAGEMENT

The Company’s cash and cash equivalents balance at December 31, 2017 was $125.7 million compared to $163.4 million at December 31, 2016.

The Company had working capital of $143.2 million and non-current liabilities of $299.9 million at December 31, 2017 of which $230.2 million related to non-cash deferred tax liabilities. This compared to working capital of $209.0 million at December 31, 2016 and non-current liabilities of $348.7 million of which $236.2 million related to non-cash deferred tax liabilities. The $65.8 million change in working capital position was primarily due to the $35.0 million debt becoming current, and a $37.7 million decrease in cash and cash equivalents due to investment in capital projects.

It is the opinion of management, based on the Company’s current liquidity position, continued steady state gold operations and metals sales, and access to the Second Amended and Restated Credit Facility that the Company’s liquid assets will be sufficient to discharge liabilities, and to continue funding operations and existing capital projects. The Company may consider alternative financing arrangements to meet its strategic needs and currently has a $175 million undrawn revolving credit facility in place available to further mitigate liquidity risk. Refer to the “Debt Facilities” section of this MD&A for further information.

The Company’s capital consists of the following:

	December 31,			December 31,
	2017			2016
Equity	$	2,624,888		$	2,572,154
Debt	35,000			35,000
Lease obligations	7,754			15,946
	2,667,642			2,623,100
Cash and cash equivalents	(125,665		)	(163,368		)
Restricted cash	(5,124		)	(4,672		)
	$	2,536,853		$	2,455,060

The Company’s strategy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to support future development of the business. The Company seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position. The capital structure of the Company consists of common equity, comprising share capital and reserves net of accumulated deficit, and debt, which includes the credit facility and finance leases.

The Company’s overall capital management strategy remains unchanged from the year ended December 31, 2016.

Dividends declared and paid during Q4 2017 and 2017 totaled nil and $43.7 million, respectively (Q4 2016 and 2016: $18.7 million and $69.4 million, respectively). Dividends paid in 2017 consisted of cash and non-cash payments in the form of common shares of the Company through the dividend reinvestment plan. For Q4 2017 and 2017, cash payments were nil and $35.7 million, respectively, and non-cash payments were nil and $8.0 million, respectively for a total issuance of 1,010,844 common shares of the Company. As a result of the suspension of operations at the Escobal mine, in August 2017 the Company’s Board of Directors ceased payments of dividends to protect the health of the Company's balance sheet and ensure the Company has financial flexibility. There are no plans to review the dividend policy until after commercial operations at Escobal mine have been fully reestablished.

Financial risk management

The Company has exposure to certain risks resulting from its use of financial instruments. These risks include credit risk, liquidity risk and market risk.

32

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Credit Risk

Credit risk is the risk that the counterparty to a financial instrument will cause a loss for the Company by failing to meet its obligations. Credit risk for the Company is primarily related to trade and other receivables, sales tax receivable and cash and cash equivalents.

The Company manages the credit risk associated with trade and other receivables by selling to organizations with strong credit ratings and/or by requiring substantial provisional pricing at the date of shipping its products. The history of defaults by these organizations to other entities has been negligible and the Company considers its risk in trade receivables to be negligible as well.

Receivables other than trade receivables are primarily sales tax receivables from the governments of Guatemala, Peru and Canada. The Company has a history of consistent collection of the sales tax receivables and therefore considers its risk to be negligible.

The Company manages the credit risk associated with cash and cash equivalents by investing these funds with highly rated financial institutions and as such, the Company deems the credit risk on cash and cash equivalents to be low.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, to the extent possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. To further mitigate this risk, the Company has an undrawn revolving credit facility in place under the Second Amended and Restated Credit Facility in the amount of $175 million, which is currently available.

Refer to the “Commitments and Contingencies” section of this MD&A for details on the Company’s significant undiscounted commitments at December 31, 2017.

Market Risk

The market risk of the Company is composed of three main risks: foreign exchange risk, interest rate risk, and price risk.

Foreign Exchange Risk

The Company is exposed to foreign exchange or currency risk on balances that are denominated in a currency other than the USD. These include cash and cash equivalents, sales tax receivables, accounts payable and accrued liabilities, finance leases and taxes payable.

To minimize currency risk, substantially all of the Company’s cash is denominated in USD and is kept in highly liquid instruments such as commercial paper and time deposits.

Cash and cash equivalents held in foreign currencies, denominated in USD, are as follows:

	December 31, 2017		December 31, 2016
Guatemalan quetzal	$	1,011	$	564
Peruvian sol	4,232		3,579
Canadian dollar	1,971		20,386
Other	—		82
	$	7,214	$	24,611

Exchange rate fluctuations may also affect the costs that the Company incurs in its operations. The Company’s goods and services are contracted in USD, CAD, Guatemalan quetzals and Peruvian soles. The appreciation of these currencies against the USD can increase the production costs the Company incurs while the depreciation of these currencies against the USD can decrease the production costs the Company incurs.

33

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

In addition, the Company is exposed to currency risk through non-monetary assets and liabilities of subsidiaries whose taxable profit or tax loss are denominated in foreign currencies. Changes in exchange rates give rise to temporary differences resulting in a deferred tax liability or asset with the resulting deferred tax charged or credited to income tax expense. At December 31, 2017, the Company had $230.1 million of deferred income tax liabilities, which arose primarily from the acquisitions of Rio Alto in 2015 and Lake Shore Gold in 2016. Based on the Company’s foreign exchange exposure on deferred tax liabilities at December 31, 2017, a 10% appreciation or depreciation in foreign exchange rates against the USD would have resulted in an approximate $16.4 million increase or decrease in the Company’s earnings.

The Company recognized a foreign exchange loss of $2.4 million at December 31, 2017 (December 31, 2016: $0.4 million). Based on the Company’s net exposure on monetary assets at December 31, 2017, a 10% appreciation or depreciation in foreign exchange rates against the USD would have resulted in an approximate $6.7 million increase or decrease in the Company’s earnings.

At December 31, 2017, the Company has determined the exposure to currency risk to be at an acceptable level.

Interest Rate Risk

Interest rate risk is the risk that the Company’s future cash flows and fair values will fluctuate as a result of changes in market interest rates. At December 31, 2017, the Company’s interest-bearing financial instruments were related to cash equivalents, the Facility ( as defined below), the Amended Revolving Facility (as defined below) and finance leases. The weighted average interest rate paid by the Company during the year ended December 31, 2017 related to debt facilities was 3.5% (year ended December 31, 2016: 2.95%). No amounts were drawn on the Amended Revolving Facility and therefore only standby fees were applicable for the year ended December 31, 2017.

At December 31, 2017, the Company determined the interest rate risk to be low and that a 10% increase or decrease in market interest rates would result in a nominal increase or decrease to the Company’s earnings.

Price Risk

Price risk is the risk that the fair value of the Company’s financial instruments will fluctuate due to changes in market prices.

The Company has determined that price risk due to fluctuations in metals prices is at an acceptable level and has not entered into any hedging contracts.

The costs associated with production, development, construction and exploration activities of the Company are also subject to price risk as it relates to certain consumables including diesel fuel and power. The Company deems its exposure to price risk related to fuel prices to be at an acceptable level and has not entered into any hedging contracts.

At December 31, 2017, the Company determined overall exposure to price risk to be at an acceptable level.

DEBT FACILITIES

Credit facility

On April 8, 2016, the Company signed a credit agreement with an international bank for a credit facility (the “Facility”) for an aggregate amount of $35 million. The Facility bears interest at LIBOR plus 2.25% on the portion drawn. The LIBOR rate was reset on January 11, 2017. The Facility has a two-year term, maturing April 9, 2018. The proceeds from the Facility were used to repay the and outstanding loan which was assumed as part of the acquisition of Rio Alto on April 1, 2015.

On February 20, 2018 the Facility was repaid using cash from operations as a condition of closing the Second Amended and Restated Credit Facility.

34

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Revolving credit facility

On August 10, 2015, the Company signed a credit agreement with a syndicate of international banks for a revolving credit facility (the “Revolving Facility”) for an aggregate amount of $150 million. Based on certain financial ratios, the Revolving Facility bears interest on the portion drawn, on a sliding scale of LIBOR plus between 2.25% to 3.25% or a base rate plus 1.25% to 2.25% which is based on the Company’s consolidated net leverage ratio.

On July 18, 2017, the Company entered into an Amended and Restated Credit Agreement (“Amended Revolving Facility”) with a syndicate of lenders to increase its revolving credit facility from $150 million to $300 million with a US$50 million accordion feature and to extend the term to July 19, 2021. The Amended Revolving Facility included terms that limited borrowing to a maximum of $75 million during the suspension of the mining license at Escobal as a result of the CALAS claim. In the event the Company's mining license at Escobal remained suspended as of April 1, 2018, an event of default under the Revolving Facility would have occurred. The Amended Revolving Facility was superseded, amended and restated on February 20, 2018 by the Second Amended and Restated Revolving Facility, as described below.

Based on certain financial ratios, the Amended Revolving Facility bore interest on the portion drawn, on a sliding scale of LIBOR plus between 2.15% to 3.125% or a base rate plus 1.125% to 2.125% which was based on the Company’s consolidated net leverage ratio. The Amended Revolving Facility was secured by the assets of the Company and its subsidiaries: Escobal Resources Holding Limited, Minera San Rafael, S.A., Tahoe Resources ULC, Lake Shore Gold Corp., Mexican Silver Mines Limited, La Arena S.A., Shahuindo SAC and Shahuindo Exploraciones.  Additionally, the Amended Revolving Facility contained covenants that, among other things, limited the ability of the Company and its subsidiaries to incur additional debt, merge, consolidate, transfer, lease or otherwise dispose of all or substantially all its of its assets to any other person. Proceeds may be used for liquidity and general corporate purposes.

Standby fees for the undrawn portion of the Amended Revolving Facility were also on a similar sliding scale basis of between 0.48% and 0.70% (previously 0.56% and 0.81%) and were $0.9 million for 2017 (2016: $0.9 million).

On February 20, 2018 the Company announced the closing of its Second Amended and Restated Revolving Facility with its bank syndicate. The Company now has access to a $175 million revolving credit facility which includes a $25 million accordion feature, for total access of $200 million in capital. The revised facility matures on July 19, 2021. The Second Amended and Restated Revolving Facility is structured on the strength of Tahoe’s gold business alone, and access to the facility does not rely on the operation of the Escobal mine.

The Bank of Nova Scotia and HSBC Securities (USA) Inc. are the co-leads for the Second Amended and Restated Revolving Facility , with The Bank of Nova Scotia acting as the administrative agent. The facility bears interest on a sliding scale of LIBOR plus between 2.25% to 3.25% or a base rate plus 1.25% to 2.25%, which is determined based upon the Company's consolidated net leverage ratio. Standby fees for the undrawn portion of the facility are also on a similar sliding scale basis of between 0.5063% and 0.7313%.

LEASE OBLIGATIONS

As part of the acquisition of Lake Shore Gold on April 1, 2016, the Company acquired finance lease obligations related to equipment and vehicles, expiring between 2016 and 2018 with interest rates between 0.9% and 6.85%. The Company has the option to purchase the equipment and vehicles leased at the end of the terms of the leases, for a nominal amount. The Company’s obligations under the finance leases are secured by the lessor’s title to the leased assets. The fair values of the finance lease liabilities approximate their carrying amount.

In addition to the finance leases acquired as part of the acquisition of Lake Shore Gold, the Company also acquired a finance lease obligation in the form of a sale-leaseback transaction whereby the Company sold certain mobile equipment for CAD$7.3 million and leased them back for a period of 36 months. The sale-leaseback bore interest at 3.7% and was paid through 12 quarterly installments of principal and interest with the final payment having been paid on October 1, 2016. Upon final payment, the Company elected the option to purchase all the equipment for CAD$1.3 million.

At December 31, 2017, the Company had total lease obligations of $7.8 million (December 31, 2016: $15.9 million).

35

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

COMMITMENTS AND CONTINGENCIES

The Company’s significant undiscounted commitments at December 31, 2017 were as follows:

							December 31,		December 31,
							2017		2016
	1 year		2-5 years		5+ years		Total		Total
Accounts payable and accrued liabilities	$	110,084	$	—	$	—	$	110,084	$	129,170
Debt	35,000		—		—		35,000		35,000
Income tax payable	2,277		—		—		2,277		10,733
Lease and contractual agreements	23,087		3,261		210		26,558		15,946
Commitments(1)	70,513		418		—		70,931		123,481
Other non-current liabilities	2,780		2,779		—		5,559		24,917
Reclamation provision	717		19,261		73,360		93,338		99,273
	$	244,458	$	25,719	$	73,570	$	343,747	$	438,520

⁽¹⁾  Commitments to purchase equipment, services, materials and supplies.

Off balance sheet arrangements

The Company currently has no off-balance sheet arrangements.

USE OF FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

The principal financial instruments currently affecting the Company’s financial condition are cash and cash equivalents, restricted cash, trade and other receivables (including provisionally priced accounts receivable), other financial assets, accounts payable and accrued liabilities, debt and finance leases. The Company’s exposure to credit risk on its foreign currency and United States currency deposits is limited by maintaining such cash and term deposits with major Canadian banks and banks in the United States that have strong credit ratings. A minimal amount of cash is held by banks in Barbados, Guatemala and Peru to fund the immediate needs of subsidiaries in those locations. To minimize risk, the Company’s funds are kept in highly liquid instruments and on deposit with stable institutions and are redeemable on demand.

RELATED PARTIES

Related party transactions

During the year ended December 31, 2017, the Company’s related parties included its subsidiaries, key management personnel, and Directors.

Key management personnel compensation

Key management are those personnel having the authority and responsibility for planning, directing, and controlling the Company. In addition to their salaries, key management personnel, including the Board of Directors, Officers and senior management, receive bonuses and also participate in the Company’s Share Plan.

Key management personnel compensation included in general administrative expenses were as follows:

36

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

	2017		2016
Short-term employee benefits(1)	$	8,804	$	8,870
Share-based payments	5,163		5,948
	$	13,967	$	14,818

⁽¹⁾  Short-term employee benefits include salaries, bonuses and other annual employee benefits paid during the year.

RECLAMATION AND CLOSURE

The Company has an obligation to reclaim its properties. The Company recognizes the present value of liabilities for reclamation and closure costs in the period in which they are incurred. A corresponding increase in the carrying amount of the related assets is recorded and amortized over the life of the asset.

In determining the discount rate to be used in the calculation of the present value of the future reclamation obligations, the Company combines risk and inflation rates specific to the country in which the reclamation will take place.

At December 31, 2017, the Company has estimated the present value of the future reclamation obligation arising from its activities to be $63.1 million (December 31, 2016: $64.2 million).

At December 31, 2017, the Company had letters of credit (“LOCs”) outstanding in the amount of $12.5 million and $5.2 million as partial guarantees of the La Arena and Shahuindo closure obligations as required by MEM. The LOCs were valid for one year with a renewal date of January 8, 2018. On January 3, 2018 the Company posted renewed LOCs under the same terms and totaling $13.3 million and $10.4 million for La Arena and Shahuindo, respectively.

At December 31, 2017, the Company had a bond outstanding in the amount of $9.5 million as partial guarantee of the Timmins mines closure obligations as required by the Ministry of Northern Development and Mines.

ASSET VALUATION

The Company assesses indicators of impairment on a quarterly basis for all CGUs and tests those CGUs for which indicators exist. Goodwill is tested at least annually or when there are indicators of impairment. The purpose of the impairment testing is to determine if the recoverable amount (greate of fair value less costs of disposal (“FVLCD”) and value in use) of a CGU is greater than its carrying value.

The Company identified six CGUs for which indicators of impairment were assessed: Escobal, La Arena oxides, La Arena II (previously La Arena sulfides), Shahuindo, Timmins mines and the Timmins Exploration Potential. In the current year, goodwill was tested at La Arena II and Timmins Exploration Potential, there were impairment indicators at the Escobal mine as it was on care and maintenance and no impairment was recognized in 2017 as a result of our analysis. Discounted cash flow models were prepared using long-term prices for gold of $1,307/oz, silver of $19.54/oz and copper of $3.30/lb (2016: $1,250/oz, silver price - $17.50/oz and copper price $3.00/lb), discount rates between 7.0% and 8.00% (2016: 6.50% and 8.75%) depending on the development stage of the operation or project. In-situ values were used for the impairment testing of exploration potential. Based on the results, for the year ended December 31, 2017, management concluded that there was no impairment or reversal of prior impairment for any of the CGUs.

There have been no events or changes in circumstances that would indicate either an impairment or the reversal of impairments previously taken of the Company’s assets during the period subsequent to December 31, 2017.

OUTSTANDING SHARE DATA

As at February 22, 2018, the Company had 312,775,761 issued and outstanding common shares, 3,825,025 issued and outstanding options and 417,000 issued and outstanding deferred share awards.

DIVIDENDS

The Company declared and paid dividends of nil and $43.7 million during Q4 2017 and 2017, respectively (Q4 2016 and 2016: $18.7 million and $69.4 million, respectively), including nil and $8.0 million in share-based dividends, respectively. This decrease in dividend payments over Q4 2016 and 2016 relates to the cessation

37

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

of the Company’s monthly dividend effective August 8, 2017 to preserve cash following the suspension of mining operations at the Escobal mine.

As a result of shareholder enrollment in the Dividend Reinvestment Plan, $8.0 million was reinvested for a total issuance of 1,010,844 common shares of the Company during 2017 (2016: $2.4 million and 256,747 shares)

CHANGES IN ACCOUNTING POLICIES AND STANDARDS

Application of new and revised accounting standards effective January 1, 2017

The Company has adopted the following new or amended IFRS standards for annual periods beginning on or after January 1, 2017. The Company has determined there to be no material impact on the consolidated financial statements upon adoption:

• IAS 7 – Statement of Cash Flows; and

• IAS 12 – Income Taxes.

Future accounting standards and interpretations

A number of new IFRS standards, and amendments to standards and interpretations, are not yet effective for the year ended December 31, 2017, and have not been applied in preparing these consolidated financial statements.

The Company has evaluated or is currently evaluating the impact the following standards are expected to have on its consolidated financial statements:

• IFRS 9 – Financial Instruments;

• IFRS 15 – Revenue from Contracts with Customers; and

• IFRS 16 – Leases.

In July 2014, the IASB issued the final version of IFRS 9 “Financial Instruments” (“IFRS 9”), which replaces IAS 39 “Financial Instruments: Recognition and Measurement” (“IAS 39”). IFRS 9 is effective for annual periods beginning on or after January 1, 2018.

IFRS 9 provides a revised model for classification and measurement of financial assets, including a new “expected credit loss” impairment model. The revised model for classifying financial assets results in classification according to their contractual cash flow characteristics and the business models under which they are held. IFRS 9 introduces a reformed approach to hedge accounting. IFRS 9 also largely retains the existing requirements in IAS 39 for the classification of financial liabilities.

The Company will adopt IFRS 9 for the annual period beginning January 1, 2018 on a retrospective basis, using certain available transitional provisions.

The Company has completed its assessment of the impact of IFRS 9 and does not expect the new standard to have a material impact on the consolidated financial statements.

In May 2014, the IASB issued IFRS 15 “Revenue from Contracts with Customers” (“IFRS 15”). IFRS 15 replaces IAS 11 “Construction Contracts”, IAS 18 “Revenue”, IFRIC 13 “Customer Loyalty Programmes”, IFRIC 15 “Agreements for the Construction of Real Estate”, IFRIC 18 “Transfer of Assets from Customers” and SIC 31 “Revenue - Barter Transactions Involving Advertising Services”, and is effective for annual periods beginning on or after January 1, 2018.

The standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract‐based five‐step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized.

The Company will adopt IFRS 15 for the annual period beginning January 1, 2018 using the modified retrospective approach. Under this approach, the Company will recognize transitional adjustments in retained earnings on the date of adoption (January 1, 2018), without restating the comparative financial statements on a retrospective basis.

38

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

The Company has completed its assessment of the impact of IFRS 15 and does not expect the new standard to have a material impact on the consolidated financial statements and there is no material impact at January 1, 2018.

IFRS 16 was issued by the IASB on January 13, 2016, and will replace IAS 17, Leases. The new Standard will bring most leases on-balance sheet for lessees under a single model, eliminating the distinction between operating and finance leases. Lessor accounting however, remains largely unchanged and the distinction between operating and finance leases is retained. IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019. Earlier application is permitted if IFRS 15, Revenue from Contracts with Customers, has been applied. The Company is currently evaluating the impact of IFRS 16 on its consolidated financial statements.

CRITICAL ACCOUNTING ESTIMATES

Critical accounting estimates used in the preparation of the consolidated financial statements include the Company’s determination of: functional currency; forward market prices for quotational periods used in revenue recognition of provisional priced concentrate sales; asset carrying values, impairment charges of long-lived assets; Mineral Resources; the valuation of share-based payments; and amounts accrued for reclamation obligations. The estimates of non-cash compensation expenses involve considerable judgment and are, or could be, affected by significant factors that are out of the Company’s control. Actual results could differ from those estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods affected.

Judgments

Commercial Production

In order to declare commercial production, a mine must be able to operate at levels intended by management. Prior to commercial production costs incurred are capitalized as part of the cost of placing the asset into service and proceeds from the sale of concentrates and doré are offset against the costs capitalized. Subsequent to the declaration of commercial production depletion of the costs incurred begins. Management considers several criteria in determining when a mine is operating at levels intended, and is therefore in commercial production.

Functional Currency

The functional currency for each of the Company and its subsidiaries is the currency of the primary economic environment in which the entity operates. The Company has determined that for each subsidiary the functional currency is the United States dollar. When determining the functional currency certain judgments may be involved to assess the primary economic environment in which the entity operates. If there is a change in events or conditions which determined the primary economic environment, the Company re-evaluates the functional currency for each of the subsidiary impacted.

Economic recoverability and probability of future economic benefits of exploration, evaluation and development costs.

The Company makes determinations whether development and related costs incurred which have been capitalized are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits including geological and metallurgical information, economic assessments and existing permits for the life of mine plan. The estimates contained within these criteria could change over time which could affect the economic recoverability of capitalized costs.

Estimates

Revenue recognition

As is customary in the industry, revenue on provisionally priced concentrate sales is recognized based on relevant forward market prices. At each reporting period, provisionally priced concentrate sales are marked to market based on the estimated forward price for the quotational period stipulated in the contract. The adjustment to provisionally priced metal sold is included in concentrate revenue.

Estimated material in the Mineral Reserves

39

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

The figures for Mineral Reserves and Mineral Resources are determined in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), issued by the Canadian Securities Administrators. NI 43-101 articulates the standards of disclosure for mineral projects including rules relating to the determination of Mineral Reserves and Mineral Resources. Management assesses the estimated Mineral Reserves and Mineral Resources used in the calculation of depletion at least annually, or whenever facts and circumstances warrant that an assessment should be made. Changes to estimates of Mineral Reserves and Mineral Resources and depletable costs including changes resulting from revisions to the Company's mine plans and changes in metal price forecasts can result in a change in future depletion rates.

Where commercial production has commenced but proven and probable Mineral Reserves have yet to be established, the carrying amounts of the Company’s depletable mineral interests are depleted based on the mineable portion of measured and indicated Mineral Resources.

Determination of Useful Lives

Plant and equipment other than mineral interests are depreciated using the straight-line method based on the specific asset’s useful life. Should the actual useful life of the plant or equipment vary from the initial estimation, future depreciation charges may change. Should the componentization of these like assets change, depreciation charges may vary materially in the future.

Impairment charges

At the end of each reporting period, the Company assesses whether any indication of impairment exists. Where an indicator of impairment exists, an impairment analysis is performed. The impairment analysis requires the use of estimates and assumptions including amongst others, long-term commodity prices, discount rates, length of mine life, future production levels, future operating costs, future capital expenditures and tax positions taken. The estimates and assumptions are subject to risk and uncertainty; hence, there is the possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the individual assets or CGUs. In such circumstances, some or all of the carrying value of the assets or CGUs may be further impaired or the impairment charge reduced with the impact recorded in the consolidated statements of operations and comprehensive income (loss).

Reclamation provision and site closure costs

The Company’s accounting policy for the recognition of accrued site closure costs requires significant estimates and assumptions such as the requirements of the relevant environmental, legal and regulatory framework, the magnitude of possible disturbance and the timing, extent and costs of required closure and rehabilitation activity. Changes to these estimates and assumptions may result in future actual expenditures differing from the amounts currently provided for. The decommissioning liability is periodically reviewed and updated prospectively based on the available facts and circumstances.

Income taxes

The Company is periodically required to estimate the tax basis of assets and liabilities. Where applicable tax laws and regulations are either unclear or subject to varying interpretations, it is possible that changes in these estimates could occur that materially affect the amounts of deferred income tax assets and liabilities recorded in the financial statements. Changes in deferred tax assets and liabilities generally have a direct impact on earnings in the period of changes. Each period, the Company evaluates the likelihood of whether some portion or all of each deferred tax asset will not be realized. This evaluation is based on historic and future expected levels of taxable income, the pattern and timing of reversals of taxable temporary timing differences that give rise to deferred tax liabilities, and tax planning initiatives. Levels of future taxable income are affected by, among other things, the market price for saleable metals, production costs, interest rates and foreign currency exchange rates.

Valuation of inventory

All inventory is valued at the lower of average cost or net realizable value. Management is required to make various estimates and assumptions to determine the value of stockpiled ore, concentrate inventories, ore stacked on leach pads and ore in process. The estimates and assumptions include surveyed quantities of stockpiled ore, in-process volumes, contained metal content, recoverable metal content, costs to recover saleable metals, payable metal values once processed and the corresponding metals prices. Changes in these estimates can result in changes to the carrying amounts of inventories and mine operating costs of future periods.

Deferred stripping costs

40

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Stripping costs incurred during the production phase of a mineral property that relate to Mineral Reserves and Mineral Resources that will be mined in a future period are capitalized. The Company makes estimates of the stripping activity over the life of the component of reserves and resources which will be made accessible. Changes in estimated strip ratios can result in a change to the future capitalization of stripping costs incurred.

Share-based compensation

The Company makes certain estimates and assumptions when calculating the fair values of share-based compensation granted. The significant estimations and assumptions include expected volatility, expected life, expected dividend yield and expected risk-free rate of return. Changes in these assumptions may result in a material change to the expense recorded for the issuance of share-based compensation.

Business combinations

The information necessary to measure the fair values as at the acquisition date of assets acquired and liabilities assumed requires management to make certain judgments and estimates about future events, including but not limited to:

• Estimates of Mineral Reserves, Mineral Resources and exploration potential acquired;

• Future operating costs and capital expenditures;

• Discount rates to determine fair value of assets acquired; and

• Future metal prices and long-term foreign exchange rates.

Changes to the preliminary measurements of assets and liabilities acquired may be retrospectively adjusted when new information is obtained until the final measurements are determined within one year of the acquisition date.

Contingencies

Due to the size, complexity and nature of the Company’s operations, various legal and tax matters arise in the ordinary course of business. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated.

There were no matters at December 31, 2017 that are reasonably expected to have a material effect on the consolidated financial statements of the Company.

NON-GAAP FINANCIAL MEASURES

NON-GAAP FINANCIAL MEASURES

The Company has included certain non-GAAP financial measures throughout this document which include total cash costs, all-in sustaining costs per silver and per gold ounce (“all-in sustaining costs”), adjusted earnings, adjusted earnings per share, and cash provided by operating activities before changes in working capital. These measures are not defined under IFRS and should not be considered in isolation. The Company’s Escobal mine primarily produces silver in concentrates with other metals (gold, lead and zinc), produced simultaneously in the mining process, the value of which represents a small percentage of the Company’s revenue from Escobal and is therefore considered “by-product”. The Company’s La Arena, Shahuindo and Timmins mines primarily produce gold with other metals (primarily silver), produced simultaneously in the mining process, the value of which represents a small percentage of the Company’s revenue from these mines and is therefore considered “by-product”. The Company believes these measures may provide investors and analysts with useful information about the Company’s underlying earnings, cash costs of operations, the impact of by-product credits on the Company’s cost structure and its ability to generate cash flow, as well as providing a meaningful comparison to other mining companies. Accordingly, these measures are intended to provide additional information and should not be substituted for GAAP measures. These non-GAAP financial measures may be calculated differently by other companies depending on the underlying accounting principles and policies applied.

The Company also reports total operating costs (cost of sales) per ounce. The Company believes that this metric is important in assessing the performance of each of the Company’s sold metals and as a meaningful GAAP-based comparison to other mining companies. Total operating costs (cost of sales) per ounce sold is calculated by dividing the total operating costs by gold ounces sold. Total operating costs (cost of sales)

41

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

includes production costs, depreciation and depletion and royalties. The reconciliation of total operating costs (cost of sales) to total cash costs is included in the total cash cost and total production cost tables below.

Consolidated adjusted earnings (loss) and consolidated adjusted earnings (loss) per share

The Company has adopted the reporting of consolidated adjusted earnings (“adjusted earnings)” and consolidated adjusted earnings per share (“adjusted earnings per share”) as a non-GAAP measure of a precious metals mining company’s operating performance. This measure has no standardized meaning and the Company’s presentation of adjusted measures are not meant to be substituted for GAAP measures of consolidated earnings or consolidated earnings per share and should be read in conjunction with such GAAP measures. Adjusted earnings and adjusted earnings per share are calculated as earnings excluding i) non-cash impairment losses and reversals on mineral interests and other assets, ii) unrealized foreign exchange gains or losses related to the revaluation of deferred income tax assets and liabilities on non-monetary items, iii) unrealized foreign exchange gains or losses related to other items, iv) unrealized gains or losses on derivatives other than provisionally priced trade receivables, v) loss on extinguishment of the Lake Shore Debentures, vi) gains or losses on sale of assets and vii) costs related to the acquisition of Lake Shore Gold and the related tax impact of these adjustments calculated at the statutory effective rate for the same jurisdiction as the adjustment. Non-recurring adjustments from unusual events or circumstances are reviewed periodically based on materiality and the nature of the event or circumstance.

The Company calculates adjusted earnings and adjusted earnings per share on a consolidated basis.

	Q4 2017			Q4 2016			2017		2016
Earnings (loss)	$	(18,010	)	$	315		$	81,793	$	117,876
Unrealized foreign exchange loss	332			(1,284		)	2,218		539
Acquisition costs	—			49			—		11,134
Deferred tax(3)	—			19,335			—		19,335
Loss on conversion of debentures	—			—			—		32,304
Loss (gain) on derivative instruments (currency swap)	—			—			—		(803		)
Adjusted earnings	$	(17,678	)	$	18,415		$	84,011	$	180,385
Weighted average common shares outstanding
Basic (000’s)	313,193			311,653			312,804		289,727
Diluted (000’s)	313,200			311,786			312,834		289,988
Adjusted earnings per share
Basic	$	(0.06	)	$	0.06		$	0.27	$	0.62
Diluted	$	(0.06	)	$	0.06		$	0.27	$	0.62

⁽¹⁾  Results of the Timmins mines prior to the date of acquisition of Lake Shore Gold on April 1, 2016 were excluded.

⁽²⁾  Costs related to the acquisition of Lake Shore Gold on April 1, 2016.

⁽³⁾  Adjusted to reflect the impact of a non-cash deferred tax charge resulting from a change in enacted rates in Peru.

Total cash costs before and net of by-product credits

The Company reports total cash costs on a silver ounce and a gold ounce produced basis for the Escobal mine and the La Arena, Shahuindo and Timmins mines, respectively. The Company follows the recommendation of the cost standard as endorsed by the Silver Institute ("The Institute”) for the reporting of total cash costs (silver) and the generally accepted standard of reporting total cash costs (gold) by precious metal mining companies. The Institute is a nonprofit international association with membership from across the silver industry and serves as the industry’s voice in increasing public understanding of the many uses and values of silver. This remains the generally accepted standard for reporting cash costs of silver production by silver mining companies. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and are useful in performing year over year comparisons. However, these non-GAAP measures should be considered together with other data prepared in accordance with IFRS, and these measures, taken alone, are not necessarily indicative of operating costs or cash flow measures prepared in accordance with IFRS.  Total cash costs are divided by the number of silver ounces contained in concentrate or gold ounces recovered from the leach pads to calculate per ounce figures. When deriving the total cash

42

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

costs associated with an ounce of silver or gold, the Company deducts by-product credits from sales which are incidental to producing silver and gold.

Total cash costs per ounce of produced silver net of by-product credits incorporate all production costs, including adjustments to inventory carrying values, adjusted for changes in estimates in reclamation which are non-cash in nature, and include by-product gold, lead and zinc credits, and treatment and refining charges included within revenue.

In addition to conventional measures, the Company assesses this per ounce measure in a manner that isolates the impacts of silver production volumes, the by-product credits, and operating costs fluctuations such that the non-controllable and controllable variability is independently addressed. The Company uses total cash costs per ounce of produced silver net of by-product credits to monitor its operating performance internally, including operating cash costs, as well as in its assessment of potential development projects and acquisition targets. The Company believes this measure provides investors and analysts with useful information about the Company’s underlying cash costs of operations and the impact of by-product credits on the Company’s cost structure and is a relevant metric used to understand the Company’s operating profitability and ability to generate cash flow. When deriving the production costs associated with an ounce of silver, the Company includes by-product credits as the Company considers that the cost to produce the silver is reduced as a result of the by-product sales incidental to the silver production process, thereby allowing the Company’s management and other stakeholders to assess the net costs of silver production.

Total cash costs (silver)

Total cash costs per ounce of produced silver, net of by-product credits

	Q4 2017		Q4 2016			2017			2016
Total operating costs (cost of sales)(1)	$	—	$	52,524		$	95,854		$	200,497
Depreciation and depletion	—		(12,903		)	(29,052		)	(53,204		)
Change in product inventory	—		(2,558		)	6,329			(1,139		)
Treatment and refining charges	—		8,173			16,205			32,600
Total cash costs before by-product credits	$	—	$	45,236		$	89,336		$	178,754
By Product credits(2)	—		(14,121		)	(29,740		)	(54,925		)
Total cash costs net of by-product credits	$	—	$	31,115		$	59,596		$	123,829
Silver ounces sold in concentrate (000’s)	—		4,470			9,773			18,996
Silver ounces produced in concentrate (000’s)	—		4,801			9,692			21,189
Total operating costs (cost of sales) per ouncesold	$	—	$	11.75		$	9.81		$	10.55
Total cash costs per ounce produced beforeby-product credits	$	—	$	9.42		$	9.22		$	8.44
Total cash costs per ounce produced net ofby-product credits	$	—	$	6.48		$	6.15		$	5.84

⁽¹⁾  Total operating costs (cost of sales) includes production costs, depreciation and depletion and royalties. All 2017 YTD costs for silver were through Q2 2017 as no silver was produced in Q3 or Q4 2017.

⁽²⁾  Gold, lead and zinc by-product credits were calculated as follows:

	Q4 2017				Q4 2016
	Quantity	Unit Price	Total Credit	Credit per ounce	Quantity	Unit Price	Total Credit	Credit per ounce
Gold Ounces	—	—	—	—	1,820	$1,050	$1,910	$0.40
Lead Tonnes	—	—	—	—	2,288	$3,303	$7,554	$1.57
Zinc Tonnes	—	—	—	—	2,840	$1,640	$4,657	$0.97

43

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

	2017				2016
	Quantity	Unit Price	Total Credit	Credit per ounce	Quantity	Unit Price	Total Credit	Credit per ounce
Gold Ounces	3,554	$1,281	$4,555	$0.47	7,676	$1,330	$10,213	$0.48
Lead Tonnes	4,085	$2,369	$9,679	$1.00	8,993	$2,448	$22,019	$1.04
Zinc Tonnes	5,568	$2,785	$15,508	$1.60	12,345	$1,838	$22,693	$1.07

⁽³⁾  Numbers in tables may not calculate due to rounding.

44

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Total cash costs (gold)

Total cash costs per ounce of produced gold, net of by-product credits

	Q4 2017
	La Arena			Shahuindo			Timmins mines			Total
Total operating costs (cost of sales)(2)	$	58,070		$	10,660		$	41,924		$	110,654
Depreciation and depletion	(28,499		)	3,374			(15,522		)	(40,647		)
Change in product inventory	(5,141		)	196			3,888			(1,057		)
Smelting and refining charges	221			75			36			332
Total cash costs before by-product credits	$	24,651		$	14,305		$	30,326		$	69,282
Silver credit(3)	(118		)	(571		)	(83		)	(772		)
Total cash costs net of by-product credits	$	24,533		$	13,734		$	30,243		$	68,510
Gold ounces sold (000’s)	39.5			18.7			34.7			92.9
Gold ounces produced(1) (000’s)	47.2			18.6			40.0			105.8
Total operating costs (cost of sales) perounce sold	$	1,471		$	570		$	1,208		$	1,191
Total cash costs per ounce produced beforeby-product credits	$	523		$	768		$	759		$	655
Total cash costs per ounce produced net ofby-product credits	$	520		$	737		$	756		$	648

	2017
	La Arena			Shahuindo			Timmins mines			Total
Total operating costs (cost of sales)(2)	$	174,468		$	65,313		$	171,638		$	411,419
Depreciation and depletion	(48,092		)	(11,452		)	(60,614		)	(120,158		)
Change in product inventory	(9,739		)	483			2,323			(6,933		)
Smelting and refining charges	1,031			384			175			1,590
Total cash costs before by-product credits	$	117,668		$	54,728		$	113,522		$	285,918
Silver credit(3)	(487		)	(1,917		)	(358		)	(2,762		)
Total cash costs net of by-product credits	$	117,181		$	52,811		$	113,164		$	283,156
Gold ounces sold (000’s)	187.8			74.6			169.5			431.9
Gold ounces produced(1) (000’s)	195.6			79.0			167.0			441.6
Total operating costs (cost of sales) perounce sold	$	929		$	876		$	1,013		$	953
Total cash costs per ounce produced beforeby-product credits	$	602		$	692		$	680		$	647
Total cash costs per ounce produced net ofby-product credits	$	599		$	668		$	678		$	641

⁽¹⁾  Total operating costs (cost of sales) includes production costs, depreciation and depletion and royalties.

⁽²⁾  Consolidated silver by-product credits were calculated as follows:

	Q4 2017							2017
	Quantity	Unit Price		Total Credit		Credit per ounce		Quantity	Unit Price		Total Credit		Credit per ounce
Silver Ounces	46,452	$	16.61	$	772	$	7.29	162,415	$	17.01	$	2,762	$	6.25

⁽³⁾  Numbers in table may not calculate due to rounding.

45

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

	Q4 2016(3)
	La Arena			Shahuindo			Timmins mines			Total
Total operating costs (cost of sales)(4)	$	36,083		$	18,929		$	34,016		$	89,028
Depreciation and depletion	(9,732		)	(5,548		)	(14,320		)	(29,600		)
Change in product inventory	2,951			469			6,389			9,809
Smelting and refining charges	810			92			49			951
Total cash costs before by-product credits	$	30,112		$	13,942		$	26,134		$	70,188
Silver credit(7)	(100		)	(348		)	(83		)	(531		)
Total cash costs net of by-product credits	$	30,012		$	13,594		$	26,051		$	69,657
Gold ounces sold (000’s)	53.0			12.9			33.0			98.9
Gold ounces produced(6) (000’s)	58.1			13.8			45.3			117.2
Total operating costs (cost of sales) perounce sold	$	680		$	1,473		$	1,030		$	900
Total cash costs per ounce produced beforeby-product credits	$	518		$	1,014		$	576		$	599
Total cash costs per ounce produced net ofby-product credits	$	516		$	989		$	575		$	594

	2016(1)(2)(3)
	La Arena			Shahuindo			Timmins mines			Total
Total operating costs (cost of sales)(4)(5)	$	143,008		$	35,134		$	101,739		$	279,881
Depreciation and depletion	(27,779		)	(10,016		)	(33,745		)	(71,540		)
Change in product inventory	4,994			2,471			6,843			14,308
Smelting and refining charges	1,814			262			133			2,209
Total cash costs before by-product credits	$	122,037		$	27,851		$	74,970		$	224,858
Silver credit(7)	(385		)	(721		)	(261		)	(1,367		)
Total cash costs net of by-product credits	$	121,652		$	27,130		$	74,709		$	223,491
Gold ounces sold (000’s)	198.6			36.7			107.6			343.0
Gold ounces produced(6) (000’s)	204.1			35.0			121.6			360.7
Total operating costs (cost of sales) perounce sold	$	720		$	956		$	946		$	816
Total cash costs per ounce produced beforeby-product credits	$	598		$	796		$	617		$	623
Total cash costs per ounce produced net ofby-product credits	$	596		$	775		$	615		$	620

⁽¹⁾  2016 figures include data from the Timmins mines beginning April 1, 2016, the date of acquisition of Lake Shore Gold.

⁽²⁾  2016 figures include data from Shahuindo beginning May 1, 2016, the commencement date of commercial production.

⁽³⁾  Change in product inventory at Shahuindo for Q4 2016 and 2016 includes costs related to gold produced in doré, but not sold as at December 31, 2016. Costs associated with the build-up of stockpile during the commissioning phase which remained work in process inventory at December 31, 2016 have been excluded from the inventory movements in the period.

⁽⁴⁾  Total operating costs (cost of sales) included production costs, depreciation and depletion, royalties and smelting and refining charges.

⁽⁵⁾  Gold ounces produced at La Arena are gold ounces produced in doré.

⁽⁶⁾  Silver by-product credits were calculated as follows:

	Q4 2016							2016
	Quantity	Unit Price		Total Credit		Credit per ounce		Quantity	Unit Price		Total Credit		Credit per ounce
Silver Ounces	26,310	$	20.18	$	531	$	4.53	68,830	$	19.86	$	1,367	$	3.79

⁽⁷⁾  Table has been updated to reflect current period presentation with no impact to the cash costs previously presented.

46

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

⁽⁸⁾  Numbers in table may not calculate due to rounding.

All-in sustaining costs

The Company has also adopted the reporting of all-in sustaining costs as a non-GAAP measure of a precious metals mining company’s ability to generate cash flow from operations. This measure has no standardized meaning and the Company has utilized an adapted version of the guidance released by the World Gold Council (“WGC”), the market development organization for the gold industry. The WGC is not a regulatory industry organization and does not have the authority to develop accounting standards or disclosure requirements.

All-in sustaining costs include total cash costs incurred at the Company’s mining operations, sustaining capital expenditures, corporate administrative expense, exploration and evaluations costs, and reclamation and closure accretion. The Company believes that this measure represents the total costs of producing silver and gold from current operations, and provides the Company and other stakeholders of the Company with additional information of the Company’s operational performance and ability to generate cash flows. AISC, as a key performance measure, allows the Company to assess its ability to support capital expenditures and to sustain future production from the generation of operating cash flows. This information provides management with the ability to more actively manage capital programs and to make more prudent capital investment decisions.

All-in sustaining costs (silver)

Total all-in sustaining costs per ounce of produced silver, net of by-product credits

The following tables reconciling total all-in sustaining costs per ounce of produced silver, net of by-product credits to the consolidated financial statements should be read in conjunction with the prior tables which reconcile total cash costs net of by-product credits to total operating costs.

	Q4 2017		Q4 2016		2017		2016
Total cash costs net of by-product credits	$	—	$	31,115	$	59,596	$	123,829
Sustaining capital(1)	—		10,295		19,062		27,030
Exploration	—		281		498		1,002
Reclamation cost accretion	—		57		123		198
General and administrative expenses	—		5,129		7,032		18,655
All-in sustaining costs	$	—	$	46,877	$	86,311	$	170,714
Silver ounces produced in concentrate (000’s)	—		4,801		9,692		21,189
All-in sustaining costs per ounce producednet of by-product credits	$	—	$	9.76	$	8.91	$	8.06

⁽¹⁾ Sustaining capital includes underground development and surface sustaining capital expenditures.

⁽²⁾ Q4 YTD 2017 silver numbers reflect actual through Q2 2017 as no silver was produced in Q3 or Q4 2017.

⁽³⁾ Numbers in table may not calculate due to rounding.

47

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

All-in sustaining costs (gold)

Total all-in sustaining costs per ounce of produced gold, net of by-product credits

	Q4 2017
	La Arena		Shahuindo		Timmins mines		Total
Total cash costs net of by-product credits	$	24,533	$	13,734	$	30,243	$	68,510
Sustaining capital	12,013		7,388		10,565		29,966
Exploration	126		979		1,458		2,563
Reclamation cost accretion	336		219		43		598
General and administrative expenses	3,301		2,142		2,160		7,603
All-in sustaining costs	$	40,309	$	24,462	$	44,469	$	109,240
Gold ounces produced (000’s)	47.2		18.6		40.0		105.8
All-in sustaining costs per ounce producednet of by-product credits	$	855	$	1,313	$	1,112	$	1,033

	2017
	La Arena		Shahuindo		Timmins mines		Total
Total cash costs net of by-product credits	$	117,181	$	52,811	$	113,164	$	283,156
Sustaining capital	32,019		22,222		46,825		101,066
Exploration	975		4,701		7,809		13,485
Reclamation cost accretion	1,358		868		138		2,364
General and administrative expenses	12,079		8,248		9,328		29,655
All-in sustaining costs	$	163,612	$	88,850	$	177,264	$	429,726
Gold ounces produced (000’s)	195.6		79.0		167.0		441.6
All-in sustaining costs per ounce producednet of by-product credits	$	837	$	1,124	$	1,062	$	973

⁽¹⁾  Numbers in table may not calculate due to rounding.

	Q4 2016
	La Arena		Shahuindo		Timmins mines		Total
Total cash costs net of by-product credits	$	30,012	$	13,594	$	26,051	$	69,657
Sustaining capital	13,560		2,307		14,686		30,553
Exploration	568		1,594		2,518		4,680
Reclamation cost accretion	308		177		41		526
General and administrative expenses(3)	1,268		3,132		938		5,338
All-in sustaining costs	45,716		20,804		44,234		110,754
Gold ounces produced in doré (000’s)	58.1		13.8		45.3		117.2
All-in sustaining costs per ounce produced net of by-product credits	$	787	$	1,508	$	976	$	945

48

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

	2016(1)(2)
	La Arena		Shahuindo		Timmins mines		Total
Total cash costs net of by-product credits	$	121,652	$	27,130	$	74,709	$	223,491
Sustaining capital	35,272		5,833		45,123		86,228
Exploration	1,664		3,751		5,062		10,477
Reclamation cost accretion	1,266		816		90		2,172
General and administrative expenses(3)	11,024		3,135		3,559		17,718
All-in sustaining costs	170,878		40,665		128,543		340,086
Gold ounces produced in doré (000’s)	204.1		35.0		121.6		360.7
All-in sustaining costs per ounce produced net of by-product credits	$	837	$	1,162	$	1,057	$	943

⁽¹⁾  2016 figures include data from the Timmins mines beginning April 1, 2016, the date of acquisition of Lake Shore Gold.

⁽²⁾  2016 figures include data from Shahuindo beginning May 1, 2016, the commencement date of commercial production.

⁽³⁾  General and administrative expenses at Shahuindo included a year-to-date adjustment to assign certain costs to production and other expense.

⁽⁴⁾  Numbers in table may not calculate due to rounding.

Cash provided by operating activities before changes in working capital

Cash provided by operating activities before changes in working capital represents the cash flows generated by operating activities after adjusting for interest expense, income tax expense and financing fees as well as items not involving cash but before changes in working capital. Net cash provided by operating activities represents the cash flows generating by operating activities after changes in working capital and income taxes paid. Management believes that these measures provide useful information to investors to evaluate the Company’s ability to generate cash flows from its mining operations.

The non-GAAP measures described above do not have standardized meanings prescribed by IFRS. As such, there are likely to be differences in the method of computation when compared to similar measures presented by other reporting issuers.

	Q4 2017		Q4 2016		2017		2016
Cash provided by operating activities before changes in working capital(1)	$	23,988	$	74,669	$	287,014	$	385,926
Cash provided by operating activities(1)	$	18,081	$	107,804	$	234,264	$	249,454
Basic weighted average common shares outstanding	313,193		311,653		312,804		289,727

⁽¹⁾ Refer to the consolidated statement of cash flows in the Company’s consolidated financial statements for a detailed reconciliation from earnings and total comprehensive income to cash provided by operating activities before changes in working capital and net cash provided by operating activities.

RISK FACTORS

Our business is the operation, exploration, development and acquisition of mining properties. Due to the high risk nature of our business, our operations are speculative. The risk factors described below are not the only risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. These risk factors could materially affect our future operating results and could cause actual events to differ materially from those described in our forward-looking statements and forward-looking information relating to us or our business.

This Management’s Discussion and Analysis also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the risks faced by us described in the documents incorporated by reference herein. Please see “Cautionary Note Regarding Forward-looking Statements.”

49

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Metal Price Fluctuations

The majority of our revenue is derived from the sale of gold and silver. Therefore, fluctuations in the prices of these commodities represent one of the most significant factors that we expect will affect our future operations and potential profitability. The price of gold and silver and other metals fluctuate widely and are affected by numerous factors beyond our control, including:

•levels of supply and demand,

•global or regional consumptive patterns,

•sales by government holders,

•metal stock levels maintained by producers and others,

•increased production due to new mine developments and improved mining and production methods,

•speculative activities related to the sale of metals,

•availability and costs of metal substitutes,

•international and regional economic and political conditions,

•interest rates, currency values, and inflation.

Declining market prices for these metals could materially adversely affect our results of operations, cash flows and financial position.

Impact of Declines in Commodity Prices of Reserves

If our Mineral Reserve calculations and life-of-mine plans are required to be revised using significantly lower gold and silver prices, this could negatively impact our Mineral Reserve calculations and the feasibility of our projects, resulting in material write-downs of our investment in mining properties and increased amortization, reclamation and closure charges. Even if the project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed which may have a material adverse effect on our results of operation, cash flow and financial position.

Concentration of Our Business in Gold and Silver Industries

We are concentrated in the gold and silver mining industries, and as such, our profitability will be sensitive to changes in, and our performance will depend to a greater extent on, the overall condition of the gold and silver mining industries. We may be susceptible to an increased risk of loss, including losses due to adverse occurrences affecting us more than the market as a whole, as a result of the fact that our operations are concentrated in the gold and silver mining sector.

Developments Regarding Indigenous Peoples

Some of our operations are situated in areas presently or previously inhabited or used by indigenous peoples, triggering various international and national laws, codes, resolutions, conventions, guidelines, and imposing obligations on government and companies relating to the rights of indigenous people. These may include a mandate that government consult with communities surrounding our projects and mines regarding actions affecting local stakeholders, prior to granting us mining rights, permits or approvals. Applicable conventions such as the ILO Convention 169, which has been ratified by Guatemala and Peru, is an example of such an international convention. Examples of developments in this area include the United Nations Declaration of the Rights of Indigenous People and the International Finance Corporation’s revised Performance Standard 7, which requires governments to obtain the free, prior, and informed consent of indigenous peoples who may be affected by government action (such as the granting of mining concessions or approval of mine permits). There is an increasing level of public concern relating to the perceived effect of mining activities on indigenous communities. The evolving expectations related to human rights, indigenous rights and, environmental protection may result in opposition to our current and future operations or further development or new development of our projects and mines. Such opposition may be directed through legal or administrative proceedings or expressed in manifestations such as protests, roadblocks or other forms of public expression against our activities, including attacks against our assets or personnel, and may have a negative impact on our reputation and operations. Opposition by any of the aforementioned groups to our operations may require modification of, or preclude the operation or development of, our projects and mines or may require us to enter into agreements with such groups or local governments with respect to our projects and mines, in some cases, causing increased cost and considerable delays to the advancement of our projects which in turn could have a material adverse effect on our reputation, financial position, cash flow and results of operations.

Adverse Developments Affecting Our Properties

The La Arena, Shahuindo and Timmins Mines currently represent 100% of our revenue producing operations. Any adverse development affecting these mines or our ability to conduct mining operations at these mines

50

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

due to suspension or loss of mining permits, licenses or credentials, protests, roadblocks or blockades that prevent supplies from entering the mine, production from leaving the mine and employees and contractors from entering and leaving the mine, if other than temporary, or other action or events, could have a material and adverse effect on our results of operations, including potential production, Mineral Reserves and Mineral Resources, revenues, profitability, and our financial performance, cash flows and financial position.

In addition, if we are unable to resolve successfully the ongoing dispute involving the Escobal Mine in Guatemala, including the ongoing legal proceedings and court orders regarding the licenses, permits and credentials necessary to conduct mining operations at the Escobal Mine by Minera San Rafael which results in a continuing or permanent suspension of mining operations, or if following a resumption of mining operations at the Escobal Mine there is a subsequent failure by MEM to renew the export credential or adequately conduct court-ordered consultation or if MSR is unable to comply with the results of such consultation process, of if future interference in the form of roadblocks, blockades, protests, future failures to obtains necessary license, permit credential renewals or otherwise, which results in a future suspension of mining operations, each could have a material and adverse effect on our results of operations, including potential production, Mineral Reserves and Mineral Resources, revenues, profitability, and our financial performance, cash flows and financial position.

Obtaining and Renewing Licenses and Permits

In the ordinary course of business, we are and will be required to obtain, maintain and renew governmental licenses or permits for the operation and expansion of our Mines and those projects currently in development for the development, construction and commencement of mining at our existing properties or those we acquire in the future. Obtaining or renewing the necessary governmental licenses, permits or credentials is a complex and time-consuming process involving numerous jurisdictions and often involving public comment periods and costly undertakings on our part. The duration and success of our efforts to obtain and renew licenses, permits and credentials are contingent upon many variables not within our control, including local politics, legal challenges and the interpretation of applicable requirements implemented by the licensing authority. Any unexpected suspensions, such as the prior provisional suspension of the Escobal mining license of MSR and the continuing legal challenges, disputes and appeals of the suspension’s revocation; a suspension of the Escobal mining license as a result of the failure by MEM to adequately conduct court ordered consultation or MSR’s inability to comply with the results of such consultation process; other revocations of licenses, permits or credentials, including reconnaissance, exploration and exploitation licenses and export credentials; disputes or refusals to issue or renew required licenses, permits or credentials, such as the current failure by MEM to renew and reissue MSR’s export credential prior to its expiration in August 2017; or delays or costs associated with the licensing, permitting or credentialing processes could prevent or delay the development or impede the operation of a mine, which could materially and adversely impact our results of operations, profitability, cash flows and financial condition.

Development and Operation of Mines

Ongoing development and operation of the Escobal, La Arena, Shahuindo and Timmins Mines depends upon our ability to consistently mine to design parameters and to process mined material at approximate design throughput rates. The long-term commercial viability of our Mines is also dependent upon a number of factors, some of which relate to the particular attributes of the deposit (such as size, grade and proximity to infrastructure), metal prices and government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection. Most of the above factors are beyond our control. As a result, there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions. Failure to do so could have a material adverse impact on our operations and potential future profitability.

Community Action

In recent years, communities of indigenous people, informal miners, non-governmental organizations (“NGOs”) and others in Guatemala and Peru have become more vocal and negative with respect to regulated mining activities in their countries. These communities and NGOs have taken actions such as road closures, work stoppages and initiating lawsuits to challenge mining permits and to sue for environmental and personal injury damages. In addition, they have petitioned human rights organizations, including the Inter American Commission on Human Rights, alleging human rights violations associated with mining operations, and the Canadian National Contact Point, alleging violations of the Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, in support of their anti-mining activities. These actions relate not only to current activities but often in respect to decades-old mining disputes and activities by prior owners of mining properties.

51

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Beginning in June 2017, a group of protesters near the town of Casillas blocked the primary road that connects Guatemala City to the Escobal Mine near San Rafael Las Flores, which road blockage continues as of the date of this filing and which has become violent at times. Protests and disputes, such as the roadblock in Casillas affecting the Escobal mine, represent a social risk in the area in which our mines are located and these and similar actions by communities and NGOs may have a material adverse effect on our operations at our mines and other development properties and on our financial position, cash flow and results of operations.

Matters Related to Aboriginal Rights in Canada

Our Canadian mines, mineral properties and related mineral interests are located on and beneath lands that are or may be subject to claims of constitutionally protected aboriginal rights, aboriginal title and treaty rights. Canadian courts have set out certain tests that governments must adhere to in any permitting decisions that may affect asserted or established aboriginal rights and aboriginal title as well as treaty rights. This includes requirements for aboriginal consultation and, if appropriate, accommodation in respect of claimed but unproven aboriginal rights and title. It also includes requirements that must be met in order to justify any infringement of treaty rights, established aboriginal rights or aboriginal title (if proven and aboriginal consent has not been obtained).

The duties of consultation, accommodation and, where applicable, justification for infringement of aboriginal rights, aboriginal title and treaty rights apply to the federal and provincial governments, not to private companies. Canadian courts however, have held that governments can delegate certain procedural aspects of the duty to consult to private parties. Further, these governmental duties could affect our interests in various indirect ways, including potential legal challenges to governmental permits that have been issued, challenges or delays in securing permits and approvals in future, the imposition of terms and conditions to address aboriginal interests and claims to lands or mineral interests. The failure to reach agreements regarding aboriginal rights could have an adverse effect on our reputation, results of operations and profitability.

Operations in Guatemala, Peru and Canada

Our operations in each of the jurisdictions in which we operates are exposed to various levels of political, economic, social and geographical risks and uncertainties. These risks and uncertainties vary from country to country and include, but are not limited to:

• terrorism,

• military repression,

• expropriation, extreme fluctuations in currency exchange rates,

• high rates of inflation,

• labour unrest,

• protests, roadblocks or other forms of public expression against our activities,

• the risks of war, civil or social unrest, crime or other violence,

• renegotiation or nullification of existing concessions, licenses, permits and contracts, ability of governments to unilaterally alter agreements; government imposed supply laws, including laws, establishing, among other things, profit margins, production quotas, maximum and minimum price, levels and the ability to confiscate merchandise in certain circumstances,

• surface land access issues,

• road blockages or blockades,

• illegal mining,

• political, judicial and business corruption,

• changes in taxation policies, regulations and laws,

• 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.

The occurrence of mining regime changes adds uncertainties that cannot be accurately predicted and any future material adverse changes in government policies or legislation in the jurisdictions in which we operate that affect foreign ownership, mineral exploration, development or mining activities, may affect our viability and profitability.

Violence in Some Jurisdictions

In recent years, criminal activity and violence has spread from border areas of Mexico to neighboring Guatemala. As a result, violent confrontations with authorities and others have steadily increased. Many incidents of crime and violence go unreported and law enforcement authorities’ efforts to reduce criminal

52

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

activity are challenged by a lack of resources, corruption and the power of organized crime. Incidents of violence and vandalism have occasionally affected our employees, contractors and their families, including recent incidents surrounding the roadblock in Casillas, Guatemala where violent tactics have included stopping and attacking trucks, the shooting of a helicopter carrying fuel to the mine and threats and abuse of mine workers and contractors. We can provide no assurance that security incidents, in the future, will not have a material adverse effect on our operations, especially if violence and criminal activity continue to escalate. Such incidents may halt or delay production, increase operating costs, result in harm to our employees, contractors or visitors, decrease operational efficiency due to employee absenteeism and other factors, increase community tensions or otherwise adversely affect our ability to conduct business.

Political Unrest and Instability

Guatemala suffered an armed conflict for 36 years, which was finally resolved through a peace agreement reached with the country’s internal revolutionary movement in 1996. The last political crisis leading to major social upheaval in Guatemala occurred in 1983 and constitutional government was not restored until 1985. In the past two decades, Guatemala has made progress in restructuring its political institutions and establishing democratic processes, however the country still suffers from social problems, including, but not limited to, a high crime rate, political corruption, malnutrition, poverty and uncertain land tenure. For example, in late January 2018, Guatemalan prosecutors announced the arrest of several business executives and former government officials implicated in a fraudulent tax-refund scandal. Renewed political unrest, changing governmental attitudes towards mining, political crises or other such issues associated with operations in a developing country could adversely affect our operations at the Escobal Mine or our ability to obtain financing necessary for such projects.

After a decade of political instability and one of its worst economic crises in history, Peru has experienced relative political stability and economic growth since the mid-1990s as a result of the restructuring of Peruvian institutions to create a free-market economy. Recently, there have been corruption investigations regarding possible payments to several current and prior government officials by the Brazilian construction company Odebrecht. In December 2017, the Peruvian Congress voted for a debate to occur on the potential dismissal of President Pedro Pablo Kuczynski for “permanent moral incapacity,” in connection with the receipt of alleged payments by Odebrecht to an affiliated company of President Kuczynski when he was finance minister in the early 2000’s. The motion to dismiss the President failed to reach the required special majority of affirmative votes and President Kuczynski remains in office. Such potential for corruption and political tension as well as poverty, unemployment, and social conflict still occur and may result in an adverse effect on our operations.

Licenses and Title to Assets

Title insurance generally is not available for our properties, and our ability to ensure that we have obtained a secure claim to individual mineral properties or mining concessions may be severely constrained. We have not conducted surveys of all of the claims in which we hold direct or indirect interests and, therefore, the precise area and location of such claims may be in doubt. We can provide no assurances that there are no title defects affecting our properties. Accordingly, our mineral properties may be subject to prior unregistered liens, agreements, transfers or claims, including indigenous land claims, and title may be affected by, among other things, undetected defects. In addition, we may be unable to operate our properties as permitted or to enforce our rights with respect to our properties. Any such defects or the inability to operate our properties as permitted could have a material adverse effect on our financial position, cash flow and results of operations.

Economic Uncertainties of Foreign Operations

As governments continue to struggle with deficits and concerns over the effects of depressed economies, the mining and metals sector has been targeted to raise revenue. Governments are continually assessing the fiscal terms of the economic rent for a mining company to exploit resources in their countries. Numerous countries, including, but not limited to Guatemala, have implemented changes to their respective mining regimes that reflect increased government control or participation in the mining sector, including, but not limited to, changes of law affecting consultation with indigenous peoples, mandatory government participation, taxation and royalties, working conditions, rates of exchange, exchange control, exploration licensing, export duties, repatriation of income or return of capital, environmental protection, foreign ownership and takeovers, as well as requirements for local goods, supplies and employment of local and community staff or contractors or other benefits to be provided to local residents. The occurrence of the various factors and uncertainties related to the economic risks of operating in foreign jurisdictions cannot be accurately predicted and could have a material adverse effect on our operations or profitability.

53

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Recently Opened Mines May Never Reach Full Production

We recently opened mines that have commenced commercial production, such as the Shahuindo Mine, and its projects are subject to risks associated with new mine development, which may result in delays in the start-up of mining operations, delays in existing operations and unanticipated costs. Our production forecasts are based on full production being achieved at all of our mines and our ability to achieve and maintain full production rates at these mines is subject to a number of risks and uncertainties. Production from these mines may be lower than anticipated if the anticipated full production rate cannot be achieved which could adversely affect our cash flows and results of operations.

Annual Production of Gold and Silver

Although our activities are primarily directed towards mining operations, our activities also include the exploration for, and development of, mineral deposits. We must continually explore to replace and expand our Mineral Reserves and Mineral Resources as our mines produce gold and silver and to a lesser degree lead and zinc. Our ability to maintain or increase our annual production of gold and silver depends in significant part on our ability to operate our mines according to our mine plans, to find new Mineral Reserves and Mineral Resources, to bring new mines into production, and to expand Mineral Reserves and Mineral Resources at existing mines. We can provide no assurance that we will be able to maintain or increase our annual production, bring new mines into production or expand the Mineral Reserves and Mineral Resources at our existing mines.

Governmental Laws and Regulations

Our operations, exploration and development activities are subject to the laws and regulations of Guatemala, Peru and Canada that govern various matters including environmental protection, management and use of toxic substances and explosives, management of natural resources, exploration, development, production, and post-closure reclamation of mines, imports and exports, price controls, taxation, mining royalties, labor standards and occupational health and safety, including mine safety and historic and cultural preservation.

The costs associated with legal compliance are substantial. In addition, possible future laws and regulations, changes to existing laws and regulations (including the imposition of higher taxes and mining royalties which have been, or may be, implemented or threatened) or more stringent enforcement of current laws and regulations by governmental authorities, could cause additional expense, capital expenditures, restrictions on or suspension of our operations and planned operations at our mines and projects. 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 impacts of our operations, or possibly even those actions of parties from whom we acquired our mines or properties. Such legal actions could lead to the imposition of substantial fines, penalties or other civil or criminal sanctions. It is difficult to strictly comply with all regulations that may be imposed on us. Even with the application of considerable skill we may inadvertently fail to comply with certain laws. Failure to comply with laws and regulations could lead to financial restatements, fines, penalties, loss, reduction or expropriation of entitlements, revocation of permits and licenses, the imposition of additional local, foreign or governmental parties as joint venture partners with carried or other interests and other material negative impacts on us.

Environmental Regulations and Reclamation

All phases of our operations with respect to each of our mines and projects are, and will continue to be, subject to environmental regulation in the countries in which they operate. Environmental legislation in Guatemala, Peru and Canada involves strict standards and may entail increased scrutiny, fines and penalties for noncompliance, stringent environmental assessments of proposed projects and a high degree of responsibility for companies and their officers, directors and employees. Changes in environmental regulation, if any, may adversely impact our operations and future potential profitability. In addition, environmental hazards which are currently unknown may exist at our mines and projects. We may be liable for losses associated with such hazards, or may be forced to undertake extensive remedial clean-up action or to pay for governmental remedial clean-up actions, even in cases where such hazards have been caused by previous or existing owners or operators of the property, or by the past or present owners of adjacent properties or by natural conditions. The costs of such clean-up actions may have a material adverse impact on our operations and future potential profitability.

Reclamation requirements are designed to minimize long-term effects of mining exploitation and exploration disturbance by requiring the operating company to control possible deleterious effluents and to re-establish to some degree pre-disturbance land forms and vegetation. We are, and will continue to be, subject to such requirements for our activities at our mines and projects. Planned reclamation expenditures are estimates only and may not represent the actual amounts that will be required to complete all reclamation activity.

54

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Additionally, any significant environmental issues that may arise could lead to increased reclamation expenditures and could have a material adverse impact on our financial resources.

Regulatory Authority Requirements Regarding Financial Assurances

We are required by various governments in jurisdictions in which we operate to provide financial assurances sufficient to allow a third party to implement approved closure and reclamation plans if we are unable to do so. These laws are complex and vary from jurisdiction to jurisdiction. The laws govern the determination of the scope and cost of the closure and reclamation obligations and the amount and forms of financial assurance.

The amount and nature of the financial assurances are dependent upon a number of factors, including our financial condition and reclamation cost estimates. Changes to these amounts, as well as the nature of the collateral to be provided, could significantly increase our costs, making the maintenance and development of existing and new mines less economically feasible. Regulatory authorities may also require further financial assurances. To the extent that the value of the collateral provided to the regulatory authorities is or becomes insufficient to cover the amount of financial assurance we are required to post, we would be required to replace or supplement the existing security with more expensive forms of security, which might include cash deposits, which would reduce our cash available for operations and financing activities. We can provide no assurance that we will be able to maintain or add to our current level of financial assurance or that we will have sufficient capital resources to further supplement our existing security, which could result in a material adverse effect on our operating results and financial condition.

Government Restrictions on Current Mining Methods

There has been increased global attention and the introduction of regulations restricting or prohibiting the use of cyanide and other hazardous substances in mineral processing activities. In addition, the use of open pit mining techniques has come under scrutiny in certain mining jurisdictions, and some governments are reviewing the use of such methods. If legislation restricting or prohibiting the use of cyanide or open pit mining techniques were to be adopted in a region in which we operate, there would be a serious and adverse impact on our results of operations and financial position. Additionally, if the use of cyanide were to be restricted or prohibited in a jurisdiction in which our operations rely on the use of cyanide, it would have a significant adverse impact on our results of operations and financial condition as there are few, if any, substitutes for cyanide that are as effective in extracting gold from the ore.

Tax Changes

Our operations in multiple tax jurisdictions increase our susceptibility to sudden tax changes. The introduction of new tax laws, regulations or rules, or changes to, or differing interpretation of, or application of, existing tax laws, regulations or rules in Canada, Guatemala and Peru or any of the countries in which our operations or business is located, could result in an increase in our taxes, or other governmental charges, duties or impositions. No assurance can be given that new tax laws, rules or regulations will not be enacted or that existing tax laws will not be changed, interpreted or applied in a manner that could result in our profits being subject to additional taxation or that could otherwise have a material adverse effect on us.

Financial Projections are Only Estimates

We prepare estimates and projections of our future production. Any such information is forward-looking and no assurance can be given that such estimates will be achieved. These estimates are based on operations being conducted consistent with existing mine plans and other assumptions which change from time to time, including the availability, accessibility, sufficiency and quality of ore, our costs of production, our ability to sustain and increase production levels, the sufficiency of our infrastructure, the performance of our workforce and equipment, our ability to maintain and obtain mining interests, licenses, and permits and our compliance with existing and future laws and regulations. Our actual production may vary from estimates for a variety of reasons, including: actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; short-term operating factors relating to the ore reserves, such as the need for sequential development of orebodies and the processing of new or different ore grades; revisions to mine plans; unusual or unexpected orebody formations; risks and hazards associated with mining; natural phenomena, such as inclement weather conditions, water availability, floods, and earthquakes; and unexpected labor shortages, strikes, protests, local community opposition or blockades. Failure to achieve the estimated forecasts could have an adverse impact on our future cash flows, business, results of operations and financial condition.

55

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Operating Cash Flow

Changes in production costs could have a major impact on profitability. Our main production expenses are personnel and contractor costs, materials and energy. Changes in costs of our mining and processing operations could occur as a result of unforeseen events, including international and local economic and political events, a change in commodity prices, increased costs (including oil, steel and diesel), scarcity of labor and other factors beyond our control which could result in changes in profitability or Mineral Resource or Mineral Reserve estimates.

We prepare estimates of future cash costs and capital costs for our operations and projects. There is no assurance that actual costs will not exceed such estimates. Exceeding cost estimates could have an adverse impact on our future results of operations or financial condition.

Failure to achieve anticipated production levels would have a material adverse impact on our cash flow and future profitability. Our failure to achieve profitability and positive operating cash flows could have a material adverse effect on our financial condition and results of operations.

Indebtedness

We currently have an aggregate consolidated indebtedness of approximately $42.8 million including a current credit facility, capital lease and other obligations. As a result of this indebtedness, we are required to use a portion of our cash flow to service principal and interest on this debt, which will limit the cash flow available for other business opportunities. Our ability to make scheduled principal payments, pay interest on or refinance our indebtedness depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Unexpected delays in production, the suspension of our mining licenses, or other operational problems could impact our ability to service the debt and make necessary capital expenditures when the debt becomes due. If we are unable to generate such cash flow to timely repay any debt outstanding, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.

Liquidity and Counterparty

We are exposed to liquidity and various counterparty risks. We are also exposed to liquidity risks in meeting our capital expenditure requirements in instances where cash positions are unable to be maintained or appropriate financing is unavailable. These factors may impact our ability to obtain loans and other credit facilities in the future and, if obtained, on terms favorable to us. Furthermore, actions taken by central banks to impact fiscal and monetary policies have increased levels of volatility and market turmoil. As a result of this uncertainty, our planned growth could be adversely impacted and the trading price of our securities could be adversely affected.

Foreign Exchange Rate Fluctuations

Fluctuations in currency exchange rates, particularly the weakening of the U.S. dollar against the Guatemalan quetzal, the Peruvian sol or the Canadian dollar, could have a significant effect on our results of operations. Any hedging activities we undertake in order to minimize these effects on our operating results may not be successful.

Financing Requirements

The mining, development, expansion and exploration of our properties, will require ongoing financing as a result of various factors including the potential for rising and unforeseen costs and fluctuations in metal prices. We must generate sufficient internal cash flow or be able to utilize available financing sources to finance our growth and sustaining capital requirements. If we do not realize satisfactory prices for the metals that we will produce, we could be required to raise significant additional capital through equity financings in the capital markets, which may involve substantial dilution to existing Shareholders, or we could be required to incur significant borrowings through debt financings to meet our capital requirements. If these financings are required, no assurance can be given that we will be able to raise capital or incur debt on acceptable terms and even if we are able to do so, the our cost of raising capital in the future may be adversely affected. Debt and other mezzanine financing may involve a pledge of assets and may be senior to interests of Shareholders. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the precious metals industry in particular) the location of the Escobal Mine in Guatemala, the locations

56

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

of the La Arena Mine and the Shahuindo Mine in Peru, the price of silver and gold on the commodities markets (which will impact the amount of asset-based financing available), and/or the loss of key management personnel.

In addition, if we are required to make significant interest and principal payments resulting from a debt financing, our financial condition and ability to raise additional funds may be adversely impacted. Any significant delay in developing our projects or in achieving commercial production from our projects on a consistent basis or the incurring of capital costs that are significantly higher than estimated, could have a significant adverse effect on our results of operations, cash flow from operations and financial condition.

Access to Capital

Any changes to our current projections or any new development or acquisition activity may require substantial additional capital. When such additional capital is required, we will need to pursue various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. Additional financing may not be available when needed or, if available, the terms of such financing might not be favorable to us and might involve substantial dilution to existing shareholders. We may not be successful in locating suitable financing transactions in the time period required or at all, and may not obtain the capital required by other means. A failure to raise capital when needed would have a material adverse effect on our business, financial condition and results of operations. Any future issuance of common shares to raise required capital will be dilutive to our shareholders. In addition, debt and other mezzanine financing may involve a pledge of assets and may be senior to interests of equity holders. We may incur substantial costs in pursuing future capital requirements, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. The ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the precious metals industry in particular) the location of the Escobal Mine in Guatemala, the locations of the La Arena Mine and the Shahuindo Mine in Peru, the price of silver and gold on the commodities markets (which will impact the amount of asset-based financing available), and/or the loss of key management personnel. Failure to obtain necessary capital on reasonable terms may materially and adversely affect our future operations and profitability.

Operating Hazards, Risks and Insurance

The ownership, operation and development of a mine or mineral property involves many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. These risks include environmental hazards, industrial accidents, explosions and third-party accidents, the encountering of unusual or unexpected geological formations, ground falls and cave-ins, mechanical failure, unforeseen metallurgical difficulties, power interruptions, flooding, earthquakes and periodic interruptions due to inclement or hazardous weather conditions or civil unrest. These occurrences could result in environmental damage and liabilities, work stoppages, delayed production and resultant losses, increased production costs, damage to, or destruction of, mineral properties or production facilities and resultant losses, personal injury or death and resultant losses, asset write downs, monetary losses, claims for compensation of loss of life and/or damages by third parties in connection with accidents (for loss of life and/or damages and related pain and suffering) that occur on company property, and punitive awards in connection with those claims and other liabilities.

It is not always possible to fully insure against such risks, and we may decide not to take out insurance against such risks as a result of high premiums or for other reasons. Should such liabilities arise they could reduce or eliminate any future profitability and result in an increase in costs and a decline in value of our securities. Even if we are able to obtain insurance against these risks, liabilities that we incur may exceed the policy limits of insurance coverage or may not be covered by insurance, in which event we could incur significant costs that could adversely impact our business, operations, potential profitability or value. We are reliant upon the expertise and performance of both our own personnel and certain third parties, such as consultants and engineers. Even if we are able to attract and retain qualified personnel, as well as qualified consultants, to manage our interests, people are fallible and human error could result in significant uninsured losses to us. These could include loss or forfeiture of mineral interests or other assets for non-payment of fees or taxes, significant tax liabilities in connection with any tax planning effort we might undertake and legal claims for errors or mistakes by our personnel or third party experts. In regards to political risks, we do not maintain and does not intend to purchase political risk insurance for our operations in Guatemala or Peru.

Illegal and Artisanal Miners

Mining by illegal and artisanal miners (small-scale or subsistence miners) occurs in the area of the Shahuindo Mine. Activity by artisanal and illegal miners could interfere with our operations and could lead to conflicts

57

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

between the artisanal or illegal miners and our employees, local communities, local governments or law enforcement officials. These activities could also cause damage to the Shahuindo Mine, including pollution, environmental damage, fires, or personal injury or death, for which we could potentially be held responsible. The presence of artisanal and illegal miners could lead to project delays and disputes regarding the development or operation of gold deposits. Artisanal and illegal mining could also result in mine stoppages, environmental issues and could have a material adverse effect on our results of operations or financial condition.

Mine Concentrate Transportation and Marketing Risk

Gold doré and mineral concentrates containing combinations of silver, gold, lead and zinc are produced at our Mines and loaded onto highway road vehicles for transport to sea ports for export to foreign smelters in markets such as Asia, Europe and North America. This type of process involves certain environmental and financial risks. We could be subject to potential significant increases in road and maritime transportation charges and treatment and refining charges. Transportation of such doré and mineral concentrates is also subject to numerous risks including, but not limited to, delays in delivery of shipments, road blocks, terrorism, criminal activities, civil unrest, weather conditions and environmental liabilities in the event of an accident or spill. We could be subject to limited smelter availability and capacity and could also face the risk of a potential interruption of business from a third party beyond our control, which in both cases could have a material adverse effect on our operations and revenues. There is no assurance that smelting, refining or transportation contracts for our Mine’s products will be entered into and/or renewed on acceptable terms. If we are unable to effectively sell our doré or smelt our mine concentrates on acceptable terms our financial position, cash flow and results of operations could be adversely affected.

Mineral Resource and Mineral Reserve Calculations are Only Estimates

Any figures presented by us for Mineral Resources and Mineral Reserves are only estimates. There is a degree of uncertainty attributable to the estimation of Mineral Resources and Mineral Reserves. Until Mineral Resources or Mineral Reserves are actually mined and processed, the quantity of metal and grades must be considered estimates only and no assurances can be given that the predicted levels of metals will be produced. The estimating of Mineral Resources and Mineral Reserves includes a subjective process that relies on the judgment of the persons preparing the estimates. The process relies on the quantity and quality of available data and is based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. By their nature, Mineral Resource and Mineral Reserve estimates are imprecise and depend, to a certain extent, upon analysis of drilling results and statistical inferences that may ultimately prove to be inaccurate. In addition, such estimates are based on certain assumptions regarding commodity prices, costs and other factors that may prove to be inaccurate. For example, a material and sustained decline in the prices of silver or gold could require us to reassess our Mineral Reserve estimates, which could impact the feasibility or value of our mineral properties.

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Estimated Mineral Resources or Mineral Reserves may have to be recalculated based on changes in metal prices, further exploration or development activity or actual production experience. This could materially and adversely affect estimates of the volume or grade of mineralization, estimated recovery rates or other important factors that influence resource or reserve estimates. The extent to which Mineral Resources may be reclassified as Proven Mineral Reserves or Probable Mineral Reserves depends upon the demonstration of their profitable recovery, among other criteria. Proven Mineral Reserves and Probable Mineral Reserves may not be profitable in the future due to market price fluctuations, increased production costs, reduced recovery rates, or other factors. A reduction in Mineral Resources or Mineral Reserves could have an adverse impact on our future cash flows, earnings, results of operations and financial condition.

Infrastructure

Mining activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important elements of infrastructure, which affect capital and operating costs. If adequate infrastructure becomes unavailable in the future there can be no assurance that operations will achieve the anticipated production volume; or that the anticipated ongoing operating costs to operate our mines or to construct our projects will not be higher than anticipated. Furthermore, unusual or infrequent weather phenomena, sabotage, government neglect or other interference in the maintenance or provision of necessary infrastructure could adversely affect our operations and profitability.

58

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Energy

We consume energy in mining activities, primarily in the form of diesel fuel and electricity. As our properties are in remote locations and energy is generally a limited resource, we face the risk that there may not be sufficient energy available to carry out mining activities efficiently or that certain sources of energy, including sufficient supplies of diesel fuel that are essential to the operation of our mines, such as the Escobal Mine, may not be available which could have a material adverse effect on operations and profitability.

Water Supplies

Our mining operations require significant quantities of water for mining, ore processing and related support facilities. In particular, our properties in Peru and Guatemala are in areas where water is scarce and competition among users for continuing access to water is significant. Continuous production and mine development is dependent on our ability to acquire and maintain water rights and claims and to defeat claims adverse to current water uses in legal proceedings. Although each of our operating mines currently has sufficient water rights and claims to cover our operational demands, we cannot predict the potential outcome of pending or future legal proceedings relating to water rights, claims and uses. Water shortages may also result from weather or environmental and climate impacts out of our control. Shortages in water supply could result in production and processing interruptions. In addition, the scarcity of water in certain regions could result in increased costs to obtain sufficient quantities of water to conduct our operations. The loss of some or all water rights, in whole or in part, or ongoing shortages of water to which we have rights or significantly higher costs to obtain sufficient quantities of water (or the failure to procure sufficient quantities of water) could result in our inability to maintain production at current or expected levels, require us to curtail or shut down mining production and could prevent us from pursuing expansion or development opportunities, which could adversely affect our results of operations and financial condition. Laws and regulations may be introduced in some jurisdictions in which we operates which could also limit access to sufficient water resources, thus adversely affecting our operations.

Employee Recruitment and Retention

Recruiting and retaining qualified personnel is critical to our success. We are dependent on the services of key executives and other highly skilled personnel focused on managing our interests. The number of persons skilled in the acquisition, development, and operation of mining properties is limited and competition for such persons is intense. As our business activity grows, we will require additional key financial, administrative, geologic and mining personnel as well as additional operations staff. There is no assurance that we will be successful in attracting, training and retaining qualified personnel as competition for persons with these skill sets increases. If we are not successful in attracting, training and retaining qualified personnel, the efficiency of our operations could be impaired, which could have an adverse impact on our future cash flows, earnings, results of operations and financial condition.

Adverse General Economic Conditions

Market events and conditions, including the disruptions in the international credit markets and other financial systems, in China, Japan and Europe, along with political instability in the Middle East and Russia and falling currency prices expressed in United States dollars have resulted in commodity prices remaining volatile. These conditions have also caused a loss of confidence in many of the global credit markets in which we operate, resulting in the collapse of, and government intervention in, major banks, financial institutions and insurers and creating a climate of greater volatility, tighter regulations, less liquidity, widening credit spreads, less price transparency, increased credit losses and tighter credit conditions. Notwithstanding various actions by governments, concerns about the general condition of the capital markets, financial instruments, banks and investment banks, insurers and other financial institutions caused the broader credit markets to be volatile. These events are illustrative of the effect that events beyond our control may have on commodity prices, demand for metals, including gold, silver, copper, lead and zinc, availability of credit, investor confidence, and general financial market liquidity, all of which may adversely affect our business.

Competition for New Properties

An element of our business strategy is to make selected acquisitions. We expect to continue to evaluate acquisition opportunities on a regular basis and intend to pursue those opportunities that we believe are in our long-term best interests. There is a limited supply of desirable mineral lands available in areas where we would consider conducting exploration or development activities. Because we face strong competition for new properties from other mining companies, some of which have greater financial resources than we do, we may be unable to acquire attractive new mining properties on terms that we consider acceptable. In addition, competition in the mining business for limited sources of capital could adversely impact our ability

59

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

to acquire and develop suitable mining properties, development projects, producing companies or properties having significant exploration potential. As a result, there is no assurance that we will be able to acquire additional mining properties.

The success of any acquisition that we make will depend upon our ability to effectively manage the operations of entities we acquire and to realize other anticipated benefits. Ultimately, any acquisitions would be accompanied by risks, which could include:

• a significant change in commodity prices after we have committed to complete the transaction and established the purchase price or exchange ratio;

• a material ore body could prove to be below expectations;

• difficulty in integrating and assimilating the operations and workforce of any acquired companies;

• realizing anticipated synergies and maximizing the financial and strategic position of the combined enterprise;

• maintaining uniform standards, policies and controls across the organization;

• disruption of our ongoing business and our relationships with employees, suppliers, contractors and other stakeholders as we integrate the acquired business or assets;

• the acquired business or assets may have unknown liabilities which may be significant;

• delays as a result of regulatory approvals;

• and exposure to litigation (including actions commenced by shareholders) in connection with the transaction.

The process of managing acquired businesses may involve unforeseen difficulties and may require a disproportionate amount of management resources. There can be no assurance that we will be able to successfully manage the operations of businesses we acquire or that we achieve the anticipated benefits of our acquisitions. Any material issues that we encounter in connection with an acquisition could have a material adverse effect on our business, results of operations and financial position.

May Not Realize Benefits of Growth Projects

As part of our strategy, we will continue our efforts regarding the development and operation of our respective projects. A number of risks and uncertainties are associated with the development and operation of these types of projects, including political, regulatory, design, construction, labor, operating, technical and technological risks and, uncertainties relating to capital and other costs and financing risks. The level of production and capital and operating cost estimates relating to the expanded portfolio of projects are based on certain assumptions and are inherently subject to significant uncertainties.

Suppliers

Certain raw materials and supplies used in connection with our operations are obtained from a sole or limited group of suppliers (including, for example, truck tires and sodium cyanide). An increase in global demand for such resources and a corresponding decrease in the supplier’s inventory would likely cause unanticipated cost increases, an inability to obtain adequate supplies and delays in delivery times, thereby adversely impacting operating costs, capital expenditures and production schedules. If a supplier is unable to adequately meet our requirements over a significant period of time and we are unable to source an alternate third party supplier on reasonable commercial terms, this could have a material adverse effect on our business, results of operations and financial condition.

Changes in Climate Conditions

Governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Regulation relating to emission levels (such as carbon taxes) and energy efficiency is becoming more stringent. If the current regulatory trend continues, we expect that this will result in increased costs at some of our operations. In addition, the physical risks of climate change may also have an adverse effect on our operations. These risks include the following: (1) Sea level rise: Changes in sea levels could affect ocean transportation and shipping facilities that are used to transport supplies, equipment and workforce to our operations and products from those operations to world markets; (2) Extreme weather events: Extreme weather events (such as increased frequency or intensity of hurricanes, increased snow pack, prolonged drought) have the potential to disrupt operations at our mines. Extended disruptions to supply lines could result in interruption to production; (3) Resource shortages: our facilities depend on regular supplies of consumables (diesel, tires, sodium cyanide, etc.) and reagents to operate efficiently. In the event that the effects of climate change or extreme weather events cause prolonged disruption to the delivery of essential commodities, our production efficiency is likely to be reduced.

60

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

We can provide no assurance that efforts to mitigate the risks of climate changes will be effective and that the physical risks of climate change will not have an adverse effect on our operations and profitability.

Claims and Legal Proceedings

We may be subject to claims or legal proceedings covering a wide range of matters that arise in the ordinary course of business activities, including claims relating to ex-employees, claims that purport to be class actions and claims relating to our licenses and permits. We and certain of our officers and directors have been named in several purported class action claims alleging violations of Section 10(b) and Section 20(a) of the US Exchange Act and Rule 10b-5 promulgated thereunder. The lawsuits were filed following the issuance of a provisional decision by the Guatemalan Supreme Court suspending the Escobal mining license issued to our subsidiary, MSR, based upon the allegation that the MEM violated the Xinka indigenous people’s right of consultation. These matters may give rise to legal uncertainties or have unfavourable results and divert management’s attention and resources. In addition, we may be involved in disputes with other parties in the future that may result in litigation or unfavourable resolution which could materially adversely impact our financial position, cash flow and results of operations.

Conflicts of Interest

Certain of our directors and officers also serve as directors and/or officers of other companies involved in natural resource exploration and development. Consequently, there is a possibility that a conflict could arise for such directors and officers. Any Company-related decision made by any of these directors and officers should be made in accordance with their duties and obligations to deal fairly and in good faith and to act in the best interests of the Company and our shareholders. In addition, each of the directors is required to declare and refrain from voting on any matter in which such director may have a conflict of interest in accordance with the procedures set forth in our Code of Business Conduct, the Business Corporations Act (British Columbia) and other applicable laws.

Operating Through Foreign Subsidiaries

We conduct operations through foreign (including Guatemalan and Peruvian) subsidiaries, and a majority of our assets are held in such entities. Accordingly, any limitation on the transfer of cash or other assets between the parent corporation and such entities, or among such entities, could restrict our ability to fund our operations efficiently. Any such limitations, or the perception that such limitations may exist now or in the future, could have an adverse impact on our valuation and stock price.

Cyber Threats and Attacks

Attacks on our information technology (“IT”) systems (or on systems of key third parties on which we rely), failure or non-availability of a key IT system or industrial control system (“ICS”) whether intentional or not, could result in disruptions to our operations, personal injury, property damage or financial or reputational risks. As the cyber threat landscape is ever changing, our primary focus includes: evaluating risk-prioritized controls, policies and procedures to protect against known and emerging threats; tools to provide automated monitoring and alerting; and disaster and backup recovery systems to restore systems and return to normal operations. There can be no assurance that our systems will be effective in protecting against these types of threats and new threats that are constantly evolving.

As cyber threats continue to emerge, we may also be required to expend additional resources to continue to modify, enhance or refine protective measures and/or investigate and remediate any security vulnerabilities and processes.

Failure to Comply with Anti-Bribery and Anti-Corruption Laws

Our activities are subject to a number of laws that prohibit various forms of corruption, including local laws that prohibit both commercial and official bribery and anti-bribery laws that have a global reach. The increasing number and severity of enforcement actions in recent years present particular risks with respect to our business activities, to the degree that any employee or other person acting on our behalf might offer, authorize, or make an improper payment to a foreign government official, party official, candidate for political office, or political party, an employee of a foreign state-owned or state-controlled enterprise, or an employee of a public international organization. A failure to comply with anti-bribery and anti-corruption laws could have an adverse impact on our reputation, future profitability and financial condition.

Failure to Maintain Effectiveness of Internal Control Over Financial Reporting

61

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

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 IFRS. Disclosure controls and procedures are designed to ensure that the information required to be disclosed by us in reports filed with securities regulatory agencies is recorded, processed, summarized and reported on a timely basis and is accumulated and communicated to our management, as appropriate, to allow timely decisions regarding required decisions. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation. Our failure to satisfy the requirements of applicable securities laws on an ongoing, timely basis, including as a result of any difficulties we encounter in integrating various acquisitions disclosure controls and procedures and internal controls over financial reporting with our existing procedures and controls could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our common shares.

In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. Any of these factors could have a material adverse effect on our results of operations, cash flows and financial position.

Reputation Risk

As a result of the increased usage and the speed and global reach of social media and other web-based tools used to generate, publish and discuss user-generated content and to connect with other users, companies today are at much greater risk of losing control over how they are perceived in the marketplace. Damage to our reputation can be the result of the actual or perceived occurrence of any number of events, and could include any negative publicity (for example, with respect to our handling of environmental matters or our dealings with community groups), whether true or not. We place a great emphasis on protecting our image and reputation, but we do not ultimately have direct control over how we are perceived by others. Reputation loss may lead to increased challenges in developing and maintaining community relations, decreased investor confidence and an impediment to our overall ability to advance its projects, thereby having a material adverse impact on financial performance, cash flows and growth prospects.

Risks Relating to Our Common Shares

Market Price of Shares and Volatility

Tahoe’s common shares are listed on the TSX and NYSE. Securities of mining companies have experienced substantial volatility in the past, often based on factors unrelated to a company’s financial performance or prospects. These factors include macroeconomic developments in North America and globally and market perceptions of the attractiveness of particular industries. The price of Tahoe’s common shares is also likely to be significantly affected by adverse business developments and short-term changes in gold, silver or other mineral prices or in Tahoe’s financial condition or results of operations. Other market-related factors unrelated to the Company’s performance that may affect the price of the common shares include the following:

• the extent of analytical coverage available to investors concerning Tahoe’s business may be limited if investment banks with research capabilities do not follow the Company;

• decreases in trading volume and general market interest in the common shares may affect an investor’s ability to trade significant numbers of common shares;

• the size of Tahoe’s public float may limit the ability of some institutions to invest in common shares; and

• a substantial decline in the price of the common shares that persists for a significant period of time could cause the common shares, if listed on an exchange, to be delisted from such exchange, further reducing market liquidity.

The market price of the common shares is also affected by many other variables which are not directly related to Tahoe’s success and are, therefore, not within its control. These include other developments that affect the market for all resource sector securities, including short-term changes in gold and silver prices, the breadth of the public market for Tahoe’s common shares and the attractiveness of alternative investments.

These factors, among others, could have an adverse impact on the market price of Tahoe’s common shares. Securities class action litigation often has been brought against companies following adverse business announcements or periods of volatility in the market price of their securities, such as the purported class action

62

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

lawsuits that were filed against Tahoe and certain of its officers and directors following the issuance of a provisional decision by the Guatemalan Supreme Court suspending the Escobal mining license issued to Tahoe’s subsidiary, Minera San Rafael, based upon the allegation that MEM violated the Xinka indigenous people’s right of consultation. Tahoe may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.

Foreign Private Issuer Exemptions

Because we are a foreign private issuer under the US Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: the rules under the US Exchange Act requiring the filing of annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K with the SEC; the sections of the US Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; the sections of the US Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and the selective disclosure rules by issuers of material non-public information under Regulation FD; and the requirement to reflect scientific and technical information pursuant to SEC Industry Guide 7.

While we file and furnish to the SEC information that we prepare and make public in accordance with Canadian securities laws, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, investors may not be afforded the same protections or information which would be made available to investors investing in a U.S. domestic issuer.

Loss of Foreign Private Issuer Status

We may in the future lose our foreign private issuer status if a majority of our shares are held in the United States and we fail to meet the additional requirements necessary to avoid loss of foreign private issuer status, such as if: (1) a majority of our directors or executive officers are U.S. citizens or residents; (2) a majority of our assets are located in the United States; or (3) our business is administered principally in the United States. At the present time, half of our directors reside in the United States and our business is administered principally from Nevada. The regulatory and compliance costs incurred under U.S. securities laws as a U.S. domestic issuer will be significantly more than the costs incurred as a Canadian foreign private issuer. If we are not a foreign private issuer, we would not be eligible to use foreign issuer forms and would be required to file periodic and current reports and registration statements on U.S. domestic issuer forms with the SEC, which are generally more detailed and extensive than the forms available to a foreign private issuer. This could result in significant additional costs and expenses.

DISCLOSURE CONTROLS AND PROCEDURES AND

INTERNAL CONTROLS OVER FINANCIAL REPORTING

DISCLOSURE CONTROLS AND PROCEDURES

The Company’s management, including the President and Chief Executive Officer (“CEO”) and the Vice-President and Chief Financial Officer (“CFO”), is responsible for the design of disclosure controls and procedures and internal controls over financial reporting (“ICFR”). Having assessed the effectiveness of the Company’s disclosure controls and procedures, the CEO and CFO believe that the disclosure controls and procedures are effective at a reasonable assurance level as at February 22, 2018.

INTERNAL CONTROLS OVER FINANCIAL REPORTING

The Company’s management is responsible for establishing and maintaining an adequate system of internal controls, including ICFR. To design and evaluate its ICFR, the Company used the Internal Control – Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission (the “2013 COSO Framework”).

The Company’s ICFR include policies and procedures that: (1) pertain to the maintenance of records and accurately and fairly reflect, in reasonable detail, the transactions related to acquisition, maintenance and disposition of its assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and receipts are recorded and expenditures

63

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

are incurred only in accordance with authorization of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on its financial statements.

The Company has designed its internal risk management and control systems to provide reasonable (but not absolute) assurance to ensure compliance with regulatory matters and to safeguard reliability of the financial reporting and its disclosures.

There has been no change in the Company’s internal control over financial reporting during the year ended December 31, 2017 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management assessed the effectiveness of the Company’s ICFR as of December 31, 2017, based on the criteria set forth in the 2013 COSO Framework and concluded that the Company’s ICFR was effective to provide reasonable assurance that financial information was recorded, processed, summarized and reported in a timely manner as of December 31, 2017.

CAUTIONARY NOTE REGARDING INTERNAL CONTROLS

The Company’s management, including the CEO and the CFO, believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any system of control is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and may not be detected.

TECHNICAL INFORMATION

Charles Muerhoff, Vice President Technical Services and Qualified Person as defined in National Instrument 43-101 has reviewed and approved the scientific and technical information contained in this MD&A.

Mineral Resource estimates reported herein have been classified as Measured, Indicated or Inferred based on the confidence of the input data, geological interpretation and grade estimation parameters. The Mineral Resource estimates were prepared in accordance with NI 43-101, and classifications adopted by the CIM Council.

Mineral Reserve estimates reported herein are based on known inputs that include metallurgical performance, taxation/royalty obligations, geologic and geotechnical characterization, operational costs, and other economic parameters. The Company is not currently aware of any known factors that are reasonably likely to have a negative material impact on the Company’s Mineral Reserves. The Mineral Reserve estimates were prepared in accordance with NI 43-101 and classifications adopted by the CIM Council. Mineral Resources are inclusive of Mineral Reserves.

Escobal Mine

The basis of the Mineral Resource and Mineral Reserve estimates for the Escobal mine is from Escobal Mine Guatemala NI 43-101 Feasibility Study, dated November 5, 2014. Mineral Resources and Mineral Reserves reported at January 1, 2018 were calculated by subtracting mine depletion volumes from the Mineral Resource and Mineral Reserve estimates stated in the aforementioned technical report.

64

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

ESCOBAL MINERAL RESOURCES AS OF JANUARY 1, 2018
Classification	Tonnes (M)	Silver (g/t)	Gold (g/t)	Lead (%)	Zinc (%)	Silver (Moz)	Gold (koz)	Lead (kt)	Zinc (kt)
Measured	4.8	374	0.33	0.68	1.20	58	51	33	58
Indicated	36.3	271	0.29	0.62	1.02	317	337	224	369
Measured + Indicated	41.1	283	0.29	0.62	1.04	375	388	256	427
Inferred	1.9	180	0.90	0.22	0.42	11	54	4	8

Mineral Resources are reported using a 100 g/t silver-equivalent cut-off grade calculated using metal prices of $20.00/oz, silver, $1,300.00/oz gold, $1.00/lb lead and $1.10/lb zinc.

ESCOBAL MINERAL RESERVES AS OF JANUARY 1, 2018
Classification	Tonnes (M)	Silver (g/t)	Gold (g/t)	Lead (%)	Zinc (%)	Silver (Moz)	Gold (koz)	Lead (kt)	Zinc (kt)
Proven	2.5	486	0.42	1.02	1.75	40	34	26	44
Probable	22.1	316	0.34	0.77	1.25	225	244	170	276
Proven + Probable	24.7	334	0.35	0.79	1.30	264	278	196	320

Mineral Reserves as of January 1, 2018 were calculated by applying an updated mine plan to the Mineral Resource estimate stated in the Escobal Feasibility Study taking into account mining depletion through the end of 2017.

Cut-off grades to define the January 1, 2018 Mineral Reserves were calculated from the NSR value of the resource model blocks contained within the life-of-mine plan minus the production cost to account for variability in mining method and metallurgical response. Metal prices used to determine the NSR value were $20.00 per ounce silver, $1,300.00 per ounce gold, $1.00 per pound lead and $1.10 per pound zinc. Actual mining, processing and general and administrative (G&A) costs, metallurgical performance and smelter contract rates from the Escobal Mine were used to derive operating costs used in the reserve calculation.

La Arena Mine

The basis of the Mineral Reserve estimate for the La Arena mine is from La Arena Project, Peru Technical Report (NI 43-101), dated February 27, 2015. Mineral Resources and Mineral Reserves reported at January 1, 2018 were calculated by applying the mine topographic surface at January 1, 2018 to an updated Mineral Resource estimate completed July 1, 2017.

Material Type	Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Oxide	Measured	0.3	0.38	3.3
	Indicated	49.6	0.40	640.2
	Measured + Indicated	49.9	0.40	643.5
	Inferred	0.4	0.32	4.3

The oxide resource is reported at a cut-off grade of 0.10 g/t Au within an optimized undiscounted cash flow pit shell using a metal price of $1,400/oz Au and actual costs experienced at the La Arena Mine.

LA ARENA MINE MINERAL RESERVES AS OF JANUARY 1, 2018
Material Type	Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Oxide	Proven	0.3	0.38	3
	Probable	43.7	0.40	565
	Proven + Probable	44.0	0.40	568

Oxide Mineral Reserves for the La Arena Mine are reported at a 0.10 g/t gold cut-off grade and have been constrained to the final pit design based on an optimized pit shell using $1,200 per ounce gold and actual

65

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

operating costs incurred. As the resource block model is a diluted block model, no additional dilution or mining losses were applied. The life-of-mine strip ratio is 1.9 (waste:ore).

Shahuindo Mine

The basis of the Mineral Reserve estimate for the Shahuindo mine is from the NI 43-101 Technical Report on the Shahuindo Mine, Cajabamba, Peru, dated January 25, 2016. Mineral Resources and Mineral Reserves reported at January 1, 2018 were calculated by applying the mine topographic surface at January 1, 2018 to an updated Mineral Resource estimate completed July 1, 2017.

SHAHUINDO MINERAL RESOURCES AS OF JANUARY 1, 2018
Material Type	Classification	Tonnes (M)	Gold (g/t)	Silver (g/t)	Gold (koz)	Silver (koz)
Oxide	Measured	89.1	0.47	5.9	1,358	16,807
	Indicated	67.6	0.42	5.1	921	11,122
	Measured + Indicated	156.7	0.45	5.5	2,278	27,929
	Inferred	13.4	0.41	4.5	177	1,925
Sulfide	Inferred	97.4	0.74	14.4	2,323	45,055
Total	Measured	89.1	0.47	5.9	1,358	16,807
	Indicated	67.6	0.42	5.1	921	11,122
	Measured + Indicated	156.7	0.45	5.5	2,278	27,929
	Inferred	110.8	0.70	13.2	2,500	46,980

The Shahuindo Mineral Resources are reported using a gold cut-off grade for oxide material of 0.15 g/t. Oxide resources are reported within a $1,400/oz gold optimized pit shell. The sulfide Mineral Resources at Shahuindo are classified entirely as Inferred due to limited metallurgical characterization and wider drill spacing than in the oxide portion of the deposit. There have been no economic or mining studies of the sulfide portion of the Shahuindo deposit completed to date; the Inferred sulfide Mineral Resource is reported at a 0.5 g/t gold-equivalent cut-off grade using a silver-to-gold ratio of 80.

SHAHUINDO MINERAL RESERVES AS OF JANUARY 1, 2018
Material Type	Classification	Tonnes (M)	Gold (g/t)	Silver (g/t)	Gold (koz)	Silver (koz)
Oxide	Proven	77.9	0.48	5.9	1,203	14,756
	Probable	49.9	0.44	5.2	704	8,384
	Proven + Probable	127.8	0.46	5.6	1,907	23,140

Oxide Mineral Reserves were reported at a 0.18 g/t gold cut-off grade and have been constrained to the final pit design based on an optimized pit shell using US$1,200/oz gold and actual operating costs incurred. The Mineral Reserves were calculated from Measured and Indicated oxide Mineral Resources only and include 5% dilution and mining losses of 2%. The life-of-mine strip ratio is 1.1 (waste:ore). There are no sulfide Mineral Reserves reported for Shahuindo.

Timmins West Mine

The basis of the Timmins West Mine Mineral Resources and Mineral Reserves is from NI 43-101 Technical Report, Timmins West Mine, Timmins, Ontario, Canada, dated September 20, 2017.  Mineral Resources and Mineral Reserves for the Timmins West Mine reported at January 1, 2018 were calculated by subtracting mining depletion through the end of 2017 from an updated resource model completed in May 2017.

66

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

TIMMINS WEST MINE MINERAL RESOURCES AS OF JANUARY 1, 2018
Deposit	Classification	Tonnes (k)	Gold (g/t)	Gold (koz)
Timmins	Measured	—	—	—
	Indicated	1,256	4.46	180
	Measured & Indicated	1,256	4.46	180
	Inferred	357	4.32	50
Thunder Creek	Measured	0	0	0
	Indicated	1,107	3.39	121
	Measured & Indicated	1,107	3.39	121
	Inferred	39	2.61	3
144 Gap(1)	Measured	247	4.86	39
	Indicated	4,751	3.82	584
	Measured & Indicated	4,998	3.88	623
	Inferred	695	3.60	81
Total Timmins West Mine	Measured	247	4.86	39
	Indicated	7,114	3.87	885
	Measured & Indicated	7,361	3.90	923
	Inferred	1,091	3.80	133

The Timmins West Mine Mineral Resources are reported as in situ resources using a gold cut-off grade of 1.5 g/t.

TIMMINS WEST MINE MINERAL RESERVES AS OF JANUARY 1, 2018
Deposit	Classification	Tonnes (k)	Gold (g/t)	Gold (koz)
Timmins	Proven	0	0	0
	Probable	984	3.59	114
	Proven + Probable	984	3.59	114
Thunder Creek	Proven	0	0	0
	Probable	466	2.89	43
	Proven + Probable	466	2.89	43
144 Gap	Proven	407	3.61	47
	Probable	4,605	3.03	449
	Proven + Probable	5,012	3.08	496
Total Timmins West Mine	Proven	407	3.61	47
	Probable	6,055	3.11	606
	Proven + Probable	6,462	3.15	654

Mineral Reserves were calculated by applying the life-of-mine plan at January 1, 2018 to the Measured and Indicated Mineral Resources using a gold price of $1,275/oz and a gold cut-off grade of 2.0 g/t. Mineral Reserves are supported by a mine plan that features variable stope thicknesses designed on the updated Mineral Resource model using operating costs of US$78.64 per tonne ore with 95% mining recovery, external dilution of 15% and metallurgical recovery of 97%.

Bell Creek Mine

The basis of the Mineral Resource and Mineral Reserve estimates for the Bell Creek mine is from NI 43-101 Technical Report, Updated Mineral Reserve Estimate for Bell Creek Mine, Hoyle Township, Timmins, Ontario, Canada, dated March 27, 2015. Mineral Resources and Mineral Reserves reported at January 1, 2018 were calculated by subtracting mining depletion through the end of 2017 from an updated resource model completed in May 2017.

67

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

BELL CREEK MINERAL RESOURCES AS OF JANUARY 1, 2018
Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Measured	1.2	4.43	167
Indicated	4.1	4.27	569
Measured & Indicated	5.3	4.31	736
Inferred	3.0	4.36	415

The Bell Creek Mineral Resources are reported as in situ resources using a gold cut-off grade of 2.2 g/t.

BELL CREEK MINERAL RESERVES AS OF JANUARY 1, 2018
Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Proven	0.5	3.90	68
Probable	1.9	4.12	246
Proven & Probable	2.4	4.07	315

Mineral Reserves were calculated by applying the life-of-mine plan at January 1, 2018 to the Measured and Indicated Mineral Resources using a long-term gold price of $1,275/oz and reported at a gold cut-off grade of 2.3 g/t. Mineral Reserves are supported by a mine plan that features variable stope thicknesses designed on the Mineral Resource model using operating costs of $87.42 per tonne ore with 95% mining recovery, external dilution of 16% and metallurgical recovery of 94.5%.

Whitney

The Mineral Resource estimate for the Whitney project is from Technical Report and Resource Estimate on the Upper Hallnor, C-Zone, and Broulan Reef Deposits, Whitney Gold Property, Timmins Area, Ontario, Canada, dated February 26, 2014. The Mineral Resource estimate for Whitney, with an effective date of February 26, 2014, is summarized below:

WHITNEY MINERAL RESOURCES
Resource Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Measured	1.0	7.02	218
Indicated	2.3	6.77	491
Measured + Indicated	3.2	6.85	709
Inferred	1.0	5.34	171

The Whitney Mineral Resource estimate is reported using a gold cut-off grade of 3.0 g/t, which was derived using a gold price of $1,200/oz, operating costs of $96.75/tonne milled, mining dilution of 20% and process recovery of 95%. There are no Mineral Reserves reported for the Whitney property.

Gold River

The Mineral Resource estimate for the Gold River project is from Technical Report on the Update of Mineral Resource Estimate for the Gold River Property, Thorneloe Township, Timmins, Ontario, Canada, dated April 5, 2012, with an effective date of April 5, 2012. The Gold River Mineral Resource estimate is summarized below:

GOLD RIVER MINERAL RESOURCES
Resource Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Indicated	0.7	5.29	117
Inferred	5.3	6.06	1,028

The Gold River Mineral Resource estimate is reported using a gold cut-off grade of 2.0 g/t, which was derived using a gold price of $1,200/oz, operating costs of $82.00/tonne milled and process recovery of 85%. A minimum thickness of two meters was used to constrain the reported Mineral Resources. There are no Measured Mineral Resources nor Mineral Reserves reported for the Whitney property.

68

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

Juby

The Mineral Resource estimate for the Juby project is from Technical Report on the Updated Mineral Resource Estimate for the Juby Gold Project, Tyrrell Township, Shining Tree Area, Ontario, dated February 24, 2014, with an effective date of February 24, 2014. The Juby Mineral Resource estimate is summarized below:

JUBY MINERAL RESOURCES
Resource Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Indicated	26.6	1.28	1,090
Inferred	96.2	0.94	2,909

Mineral Resources are reported as in situ resources using a gold cut-off grade of 0.40 g/t. There are no Measured Mineral Resources nor Mineral Reserves reported for the Juby property.

Fenn-Gib

The Mineral Resource Estimate for the Fenn-Gib project is from Fenn-Gib Resource Estimate Technical Report, Timmins Canada, dated November 17, 2011, with an effective date of November 17, 2011. The Fenn-Gib Mineral Resource estimate is summarized below:

FENN-GIB MINERAL RESOURCES
Resource Classification		Tonnes (M)	Gold (g/t)	Gold (koz)
Inside Pit Shell	Indicated	40.8	0.99	1,300
	Inferred	23.3	0.90	670
Below Pit	Indicated	0.04	1.89	2
	Inferred	1.2	1.90	80
All Material	Indicated	40.8	0.99	1,300
	Inferred	24.5	0.95	750

Nearly all of the Indicated Mineral Resources and approximately 90% of Inferred Mineral Resources are reported within a $1,190/oz gold pit shell using a gold cut-off grade of 0.50 g/t, operating costs of US$13.00/tonne ore and process recovery of 85%. The remaining Indicated and Inferred Mineral Resources which are occur below the pit limits are reported using a gold cut-off grade of 1.5 g/t. There are no Measured Mineral Resources nor Mineral Reserves reported for the Fenn-GIb property.

Marlhill

The Marlhill Mineral Resource estimate is from Technical Report on the Marhill Project, Hoyle Township, Timmins, Ontario, Canada, March 1, 2011, with an effective date of March 1, 2011. The Marlhill Mineral Resource estimate is summarized below:

MARLHILL MINERAL RESOURCES
Resource Classification	Tonnes (M)	Gold (g/t)	Gold (koz)
Indicated	0.4	4.52	57

Mineral Resources are reported as in situ resources using a gold cut-off grade of 0.2.9 g/t and a minimum width of two meters. The cut-off grade was determined using a gold price of $1,125/oz, operating costs of C$100/tonne and metallurgical recovery of 90%. There are no Measured or Inferred Mineral Resources nor Mineral Reserves reported for the Marlhill property.

Vogel/Schumacher

The Vogel/Schumacher Mineral Resource estimate is from Technical Report on the Initial Mineral Resource Estimate for the Vogel/Schumacher Deposit, Bell Creek Complex, Hoyle Township, Timmins, Ontario, Canada,

69

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

June 14, 2011, with an effective date of June 14, 2011. The Vogel/Schumacher Mineral Resource estimate is summarized below:

VOGEL/SCHUMACHER MINERAL RESOURCES
Resource Classification		Tonnes (M)	Gold (g/t)	Gold (koz)
Inside Pit Shell	Indicated	2.2	1.75	125
	Inferred	0.7	1.43	32
Below Pit	Inferred	0.8	5.56	137
All Material	Indicated	2.2	1.75	125
	Inferred	1.5	3.60	169

Mineral Resources labeled as ‘Inside Pit Shell’ are those resources which occur inside an optimized pit shell developed using a gold price of $1,150/oz, operating costs of $24.75/tonne and process recovery of 95%. ‘Inside Pit Shell’ Mineral Resources are reported at a gold cut-off grade of 0.63 g/t. Mineral Resources which occur below the pit shell are reported using a gold cut-off grade of 2.9 g/t. There are no Measured Mineral Resources nor Mineral Reserves reported for the Vogel/Schumacher property.

Technical terms used in this MD&A but not otherwise defined herein are as described in the Company’s AIF available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov or on the Company’s website at www.tahoeresources.com.

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This MD&A contains “forward-looking statements” within the meaning of Section 27A of the United States Securities Act of 1933, as amended, Section 21E of the US Exchange Act, the United States Private Securities Litigation Reform Act of 1995, or in releases made by the United States Securities and Exchange Commission, all as may be amended from time to time, and "forward-looking information" under the provisions of applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of the Company. All statements, other than statements of historical fact, are forward-looking statements. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “guidance”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, or variations or comparable language of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, "should", “might” or “will be taken”, “occur” or “be achieved” or the negative connotation thereof.

Forward-looking statements include, but are not limited to, statements related to the following: in regards to the status of the appeals to the Guatemalan Constitutional Court (i) of the decision by the Supreme Court of Guatemala ordering MEM to conduct consultation with indigenous populations in certain designated locations in and around the Escobal Mine, (ii) of the decision by the Supreme Court of Guatemala reinstating the Company’s mining license in respect of the Escobal mine, and (iii) relating to Escobal’s export credential, the timing for such appeals to be decided and the likelihood of adverse decisions by the Constitutional Court; the timing and results of other court proceedings; the timing and likelihood of resolving the road blockage affecting the Escobal mine; timing and possible outcome of pending litigation; the future price of gold, silver, copper, lead and zinc, the estimation of Mineral Reserves and Mineral Resources, the realization of Mineral Reserve estimates; production and cost targets for the Company’s gold operations in 2018 of 400,000 to 475,000 ounces of gold, total cash costs of $725 to $775 per ounce and all-in sustaining costs of $1,000 to $1,100 per ounce, as well as estimated 2018 production, cash costs, all-in sustaining costs, project capital, sustaining capital and exploration expenditures on a per gold mine basis; the Company’s goal to reach and sustain 18-21 million ounces of silver production and 500 - 550 thousand ounces of gold production annually; the continued evaluation of the La Arena II project and the economic analysis provided in the PEA, including the timeline and estimated capital required and the assessment of financial and strategic options; multi-year gold guidance (2018 to 2020) relating to gold ounces produced, total cash costs per ounce gold produced net of by-product credits, all-in sustaining costs per ounce gold produced net of by-product credits, sustaining and project capital expenditures, corporate general and administration expenses, and exploration expenses; the expectation of meeting production targets; growing gold production to over one half million ounces in 2019; the timing and cost of the design, procurement, construction and commissioning of the 24,000 tpd crushing and agglomeration circuit at Shahuindo, as well as the expansion of the Shahuindo mine to a production capacity of 36,000 tpd with commissioning by mid-year 2018 and achieving the full 36,000 tpd production rate by the end of 2018 providing an expected 80% ultimate recovery, in line with the pre-feasibility

70

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

study; the expectation of achieving ultimate overall gold recovery at Shahuindo of 67% for run-of-mine material; the timing of the receipt of permits at Shahuindo; the timing for construction of Pad 2B at Shahuindo and the commencement of production at Pad 2B in Q3 2018; the estimated cost and timing of completion of the Bell Creek shaft project and tailings pond expansion; care and maintenance plans at Escobal; providing further updates to guidance when additional information regarding the Escobal license is available; expected working capital requirements; the sufficiency of capital resources and the consideration of alternative financing arrangements to meet strategic needs; the expected depreciation and depletion rates; exploration and review of prospective mineral acquisitions; the anticipated timing of updated Mineral Resource and Mineral Reserve estimates; the timing for completion of the underground dewatering project at Escobal; the cost and timing of sustaining capital projects; and the timing, costs, results and impacts of purported class action lawsuits filed against the Company and certain of its officers and directors.

Forward-looking statements are based on the reasonable assumptions, estimates, analyses and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. Management believes that the assumptions and expectations reflected in such forward-looking statements are reasonable. Assumptions have been made regarding, among other things: the Company’s performance and ability to operate and implement operational improvements at the Escobal, La Arena, Shahuindo and Timmins Mines; studies and development efforts on the La Arena II deposit; the Company’s ability to carry on exploration and development activities, including land acquisition and construction; the availability and sufficiency of power and water for operations; the timely receipt of permits and other approvals; the successful outcomes of consultations with indigenous populations; the price of silver, gold and other metals; prices for key mining supplies, including labor costs and consumables, remaining consistent with the Company’s current expectations; production meeting expectations and being consistent with estimates; plant, equipment and processes operating as anticipated; there being no material variations in the current tax and regulatory environment; the Company’s ability to operate in a safe, efficient and effective manner; the exchange rates among the Canadian dollar, Guatemalan quetzal, Peruvian sol and the USD remaining consistent with current levels; the ability to resolve the protests and road blockages of the Escobal Mine; the timing and amount of foregone taxes and royalties; the timing and likelihood of further workforce reductions; the timing and ability of the Company to resume operations in the event the suspension of the mining license to Minera San Rafael for the Escobal Mine is lifted and all licenses, permits and credentials affecting the operation of the Company’s mines, including the Escobal Mine, are renewed or re-issued and all roadblocks are resolved, and relationships with the Company’s partners, including employees, vendors and community populations are maintained or effectively managed; the Company’s ability to obtain financing as and when required and on reasonable terms; and the Company’s ability to continue to comply with the terms of the credit agreements with its lenders. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used.

Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors include but are not limited to: the fluctuation of the price of silver and gold; opposition to development and mining operations by one or more groups of indigenous people; actions that impede or prevent the operations of the Company’s mines; the inability to develop and operate the Company’s mines; social unrest and political or economic instability and uncertainties in the jurisdictions in which the Company operates; the timing and ability to maintain and, where necessary, obtain necessary permits and licenses; changes in national and local government legislation, taxation and controls or regulations; environmental and other governmental regulation compliance; un-appealable judicial decisions; the uncertainty in the estimation of Mineral Resources and Mineral Reserves; fluctuations in currency exchange rates; infrastructure risks, including access to roads, water and power; and the timing and possible outcome of pending or threatened litigation and the risk of unexpected litigation. For a more detailed discussion of risks relevant to the Company, see “Description of Tahoe’s Business - Risk Factors Relating to Tahoe’s Business” and “- Risk Factors Relating to Tahoe’s Shares” in the Company’s Annual Information Form and Form 40-F, available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov or on the Company’s website at www.tahoeresources.com.

Although management has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. Forward-looking statements are made as of the date hereof and, accordingly, are subject to

71

	Management’s Discussion and Analysis
	For the Years Ended December 31, 2017 and 2016
	(tabular amounts expressed in thousands of United States dollars, except where otherwise noted)

change after such date. Except as otherwise indicated by the Company, these statements do not reflect the potential impact of any non-recurring or other special items or of any disposition, monetization, merger, acquisition, other business combination or other transaction that may be announced or that may occur after the date hereof. Forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans and allowing investors and others to get a better understanding of the Company’s operating environment. The Company does not intend or undertake to publicly update any forward-looking statements that are included in this document, whether as a result of new information, future events or otherwise, except as, and to the extent required by, applicable securities laws.

CAUTIONARY NOTE TO INVESTORS IN THE UNITED STATES

REGARDING RESOURCES AND RESERVES

The Mineral Resource and Mineral Reserve estimates contained in this MD&A have 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 and use terms that are not recognized by the United States Securities and Exchange Commission (“SEC”). Canadian reporting requirements for disclosure of mineral properties are governed by NI 43-101. The definitions used in NI 43-101 are incorporated by reference from the CIM Definition Standards adopted by CIM Council on May 10, 2014 (the “CIM Definition Standards”). U.S. reporting requirements are governed by the SEC Industry Guide 7 (“Industry Guide 7”) under the United States Securities Act of 1933, as amended. These reporting standards have similar goals in terms of conveying an appropriate level of confidence in the disclosures being reported, but embody difference approaches and definitions. For example, the terms “Mineral Reserve”, “Proven Mineral Reserve” and “Probable Mineral Reserve” are Canadian mining terms as defined in in NI 43-101, and these definitions differ from the definitions in Industry Guide 7. Under Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. Further, under Industry Guide 7, mineralization may not be classified as "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.

While the terms “Mineral Resource”, “Measured Mineral Resource”, “Indicated Mineral Resource” and “Inferred Mineral Resource” are defined in and required to be disclosed by NI 43-101, these terms are not defined terms under Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. United States readers are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. In addition, “Inferred Mineral Resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. A significant amount of exploration must be completed in order to determine whether an Inferred Mineral Resource may be upgraded to a higher category. Under Canadian regulations, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. United States readers are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations if such disclosure includes the grade or quality and the quantity for each category of Mineral Resource and Mineral Reserve; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this MD&A containing descriptions of the Tahoe’s mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

72

EX-99.4

EXHIBIT 99.4

CERTIFICATION

I, Ron Clayton, certify that:

(1) I have reviewed this Annual Report on Form 40-F of Tahoe Resources Inc. for the year ended December 31, 2017.

(2) 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.

(3) 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.

(4) The issuer’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 control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) 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;

(b) 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;

(c) evaluated the effectiveness of the issuer’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

(d) disclosed in this report any change in the issuer’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’s internal control over financial reporting.

(5) The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a) 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’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date: February 22, 2018

By:/s/ Ronald W. Clayton
Name: Ron Clayton
Title: Chief Executive Officer

EX-99.5

EXHIBIT 99.5

CERTIFICATION

I, Elizabeth McGregor, certify that:

(1) I have reviewed this Annual Report on Form 40-F of Tahoe Resources Inc. for the year ended December 31, 2017.

(2) 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.

(3) 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.

(4) The issuer’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 control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) 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;

(b) 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;

(c) evaluated the effectiveness of the issuer’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

(d) disclosed in this report any change in the issuer’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’s internal control over financial reporting.

(5) The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a) 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’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date: February 22, 2018

By: /s/ Elizabeth McGregor
Name: Elizabeth McGregor
Title: Chief Financial Officer

EX-99.6

EXHIBIT 99.6

CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Ron Clayton, Chief Executive Officer of Tahoe Resources Inc. (the “Company”), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(i) the Annual Report on Form 40-F of the Company for the fiscal year ended December 31, 2017 (the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:    

/s/ Ronald W. Clayton
Name:    Ron Clayton
Title:     Chief Executive Officer

Date:    February 22, 2018

EX-99.7

EXHIBIT 99.7

CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Elizabeth McGregor, Chief Financial Officer of Tahoe Resources Inc. (the “Company”), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(i) the Annual Report on Form 40-F of the Company for the fiscal year ended December 31, 2017 (the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:    

/s/ Elizabeth McGregor
Name:    Elizabeth McGregor
Title:     Chief Financial Officer

Date:    February 22, 2018

EX-99.8

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements No. 333-181981 on Form S-8 and No. 333-213086 on Form F-3 and to the use of our reports dated February 22, 2018, relating to the consolidated financial statements of Tahoe Resources Inc. and subsidiaries (the “Company”) and the effectiveness of the Company’s internal control over financial reporting appearing in this Annual Report on Form 40-F of the Company for the year ended December 31, 2017.

/s/ Deloitte LLP

Chartered Professional Accountants

Vancouver, Canada

February 22, 2018

EX-99.9

Exhibit 99.9

To:	United States Securities and Exchange Commission
Re:	Tahoe Resources Inc. (the "Company")Annual Report on Form 40-F Consent of Expert

This consent is provided in connection with the Company’s annual report on Form 40-F to be filed by the Company with the United States Securities and Exchange Commission and any amendments thereto (the "Annual Report"). The Annual Report incorporates by reference, among other things, the Company’s Annual Information Form for the year ended December 31, 2017 (the “ Annual Information Form”) and Management’s Discussion and Analysis for the years ended December 31, 2017 and 2016 (the “MD&A ”).

I, Charles Muerhoff, SME RM, Vice President, Technical Services, of the Company, Reno, Nevada, hereby consent to:

• the disclosure of me by name as the person responsible for verifying of certain scientific and technical information included in the Annual Information Form in respect of the Escobal, La Arena, Shahuindo, Bell Creek and Timmins West Mines;

• the disclosure of me by name as the person responsible for reviewing and approving the scientific and technical information contained in the MD&A; and

• the disclosure of such scientific and technical information in respect of the Escobal, La Arena Shahuindo, Bell Creek and Timmins West Mines in the Annual Information Form and MD&A.

• the inclusion and incorporation by reference of the Annual Report, and therefore of the Annual Information Form and MD&A, in each of:

o the Company’s Registration Statement on Form S-8 (SEC File No. 333-181981), and     

o the Company’s Registration Statement on Form F-3D (SEC File No. 333-213086).

Dated the 22^nd day of February, 2018

/s/ Charles Muerhoff

Charles Muerhoff, SME RM No. 4182272

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2017 shares
Document and Entity Information [Abstract]
Document Type	40-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Trading Symbol	TAHO
Entity Registrant Name	Tahoe Resources Inc.
Entity Central Index Key	0001510400
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding	312,775,761

XML

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current
Cash and cash equivalents	$ 125,665	$ 163,368
Trade and other receivables	39,617	64,646
Inventories	128,381	126,618
Other	5,412	4,810
Total current assets	299,075	359,442
Non-current
Mineral interests, plant and equipment	2,616,789	2,556,953
Sales tax and other receivables	47,196	36,107
Restricted cash	5,124	4,672
Deferred tax asset	369	1,994
Goodwill	112,085	112,085
Total non-current assets	2,781,563	2,711,811
Total Assets	3,080,638	3,071,253
Current
Accounts payable and accrued liabilities	110,084	129,170
Current portion of long-term debt	35,000	0
Lease obligations	6,146	8,696
Income tax payable	2,277	10,733
Other	2,323	1,837
Total current liabilities	155,830	150,436
Non-current
Lease obligations	1,608	7,250
Long-term debt	0	35,000
Reclamation provision	62,569	64,219
Deferred tax liability	230,184	236,175
Other	5,559	6,019
Total Liabilities	455,750	499,099
SHAREHOLDERS’ EQUITY
Share capital	2,788,234	2,775,068
Share-based payment reserve	20,090	18,629
Deficit	(183,436)	(221,543)
Total Shareholders’ Equity	2,624,888	2,572,154
Total Liabilities and Shareholders’ Equity	$ 3,080,638	$ 3,071,253

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND TOTAL COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Profit or loss [abstract]
Revenues	$ 733,557	$ 784,503
Operating costs
Production costs	348,146	332,721
Royalties	15,570	22,913
Care and maintenance	24,855	0
Depreciation and depletion	153,016	124,744
Total operating costs	541,587	480,378
Mine operating earnings	191,970	304,125
Other operating expenses
Exploration	18,522	14,350
General and administrative	45,788	47,507
Total other operating expenses	64,310	61,857
Earnings from operations	127,660	242,268
Other expense (income)
Interest income	(743)	(150)
Interest expense	3,282	3,644
Loss on debenture conversion	0	32,304
Foreign exchange loss	2,441	435
Other expense (income)	2,853	(2,697)
Total other expense	7,833	33,536
Earnings before income taxes	119,827	208,732
Current income tax expense	42,400	70,654
Deferred income tax (recovery) expense	(4,366)	20,202
Earnings (loss)	81,793	117,876
Total comprehensive income (loss)	$ 81,793	$ 117,876
Earnings per share
Basic (in dollars per share)	$ 0.26	$ 0.41
Diluted (in dollars per share)	$ 0.26	$ 0.41
Weighted average shares outstanding
Basic (in shares)	312,804,323	289,726,501
Diluted (in shares)	312,833,500	289,988,046

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
OPERATING ACTIVITIES
Earnings for the year	$ 81,793	$ 117,876
Adjustments for:
Interest expense	3,284	3,644
Payment on extinguishment of currency swap	0	(1,939)
Income tax expense	38,034	90,856
Items not involving cash:
Depreciation and depletion	152,536	128,072
Loss on disposition of plant and equipment	1,026	451
Gain on currency swap	0	(803)
Share-based payments	5,483	7,224
Shares issued as transaction costs	0	5,332
Unrealized foreign exchange loss	2,218	539
Loss on debenture conversion	0	32,304
Accretion	2,640	2,370
Cash provided by operating activities before changes in working capital	287,014	385,926
Changes in working capital	8,243	(67,556)
Cash provided by operating activities	295,257	318,370
Income taxes paid	(60,993)	(68,916)
Net cash provided by operating activities	234,264	249,454
INVESTING ACTIVITIES
Additions to mineral interests, plant and equipment	(224,089)	(190,885)
Cash acquired through acquisition	0	70,187
Net cash used in investing activities	(224,089)	(120,698)
FINANCING ACTIVITIES
Proceeds from issuance of common shares on exercise of share options	914	19,790
Dividends paid to shareholders	(35,697)	(67,044)
Loan origination fees and other	(671)	(403)
Interest paid	(2,614)	(2,989)
Payments on finance leases	(9,455)	(22,266)
Net cash used in financing activities	(47,523)	(72,912)
Effect of exchange rates on cash and cash equivalents	(355)	(1,143)
Increase (decrease) in cash and cash equivalents	(37,703)	54,701
Cash and cash equivalents, beginning of year	163,368	108,667
Cash and cash equivalents, end of year	$ 125,665	$ 163,368

XML

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY $ in Thousands	USD ($) shares	Share Capital USD ($) shares	Reserves USD ($)	Deficit USD ($)
Beginning balance (in shares) at Dec. 31, 2015 | shares		227,401,681
Beginning balance at Dec. 31, 2015	$ 1,664,031	$ 1,914,676	$ 19,372	$ (270,017)
Changes in equity [abstract]
Earnings and comprehensive income	117,876			117,876
Shares issued under the Share Plan (in shares) | shares		244,000
Shares issued under the Share Plan	787	$ 3,729	(2,942)
Shares issued as transaction costs (in shares) | shares		455,019
Shares issued as transaction costs	5,332	$ 5,332	0
Shares issued on acquisition (in shares) | shares		69,239,629
Shares issued on acquisition	685,106	$ 676,670	8,436
Shares issued on conversion of Performance Share Units (“PSUs”) on acquisition of Lake Shore Gold (in shares) | shares		211,442
Shares issued on conversion of Performance Share Units (“PSUs”) on acquisition of Lake Shore Gold	2,131	$ 2,131	0
Shares issued on conversion and redemption of convertible debentures (in shares) | shares		10,733,675
Shares issued on conversion and redemption of convertible debentures	$ 137,997	$ 137,997	0
Shares issued on exercise of stock options (in shares) | shares	2,819,838	2,819,838
Shares issued on exercise of share options	$ 19,790	$ 32,175	(12,385)
Share-based payments	6,148		6,148
Dividends paid to shareholders (in shares) | shares		256,747
Dividends paid to shareholders	(67,044)	$ 2,358		(69,402)
Ending balance at Dec. 31, 2016	$ 2,572,154	$ 2,775,068	18,629	(221,543)
Ending balance (in shares) at Dec. 31, 2016 | shares	311,362,031	311,362,031.000
Changes in equity [abstract]
Earnings and comprehensive income	$ 81,793			81,793
Shares issued under the Share Plan (in shares) | shares		290,750
Shares issued under the Share Plan	$ 656	$ 3,838	(3,182)
Shares issued on exercise of stock options (in shares) | shares	112,136	112,136
Shares issued on exercise of share options	$ 914	$ 1,339	(425)
Share-based payments	$ 5,068		5,068
Dividends paid to shareholders (in shares) | shares	1,010,844	1,010,844
Dividends paid to shareholders	$ (35,697)	$ 7,989		(43,686)
Ending balance at Dec. 31, 2017	$ 2,624,888	$ 2,788,234	$ 20,090	$ (183,436)
Ending balance (in shares) at Dec. 31, 2017 | shares	312,775,761	312,775,761

XML

OPERATIONS

12 Months Ended

Dec. 31, 2017

General Information About Financial Statements [Abstract]

OPERATIONS

OPERATIONS

Tahoe Resources Inc. (“Tahoe”) was incorporated under the Business Corporations Act (British Columbia) on November 10, 2009. These audited annual consolidated financial statements (“consolidated financial statements”) include the accounts of Tahoe and its subsidiaries (together referred to as the “Company”). The Company’s principal business activities are the operation of mineral properties for the mining of precious metals and the exploration, development and acquisition of mineral interests in the Americas.

The Company’s registered office is located at 1500 Royal Centre, 1055 West Georgia Street, P.O. Box 11117, Vancouver, BC V6E 4N7, Canada.

The Company’s Board of Directors authorized issuance of these consolidated financial statements on February 22, 2018.

XML

BASIS OF PREPARATION

12 Months Ended

Dec. 31, 2017

Corporate Information And Statement Of IFRS Compliance [Abstract]

BASIS OF PREPARATION

BASIS OF PREPARATION

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) effective as of December 31, 2017. IFRS includes IFRSs, International Accounting Standards (“IASs”), and interpretations issued by the IFRS Interpretations Committee (“IFRICs”) and the former Standing Interpretations Committee (“SICs”).

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SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2017

Corporate Information And Statement Of IFRS Compliance [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

a) Basis of measurement

The consolidated financial statements have been prepared on an historical cost basis, except for certain financial instruments, which are measured at fair value through profit or loss (“FVTPL”), as explained in the accounting policies set out below. Additionally, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

b) Currency of presentation

The consolidated financial statements are presented in United States dollars (“USD”), which is the functional and presentation currency of the Company and all of its subsidiaries. Certain values are presented in Canadian dollars and described as CAD.

c) Basis of consolidation

The accounts of the subsidiaries controlled by the Company are included in the consolidated financial statements from the date that control commenced until the date that control ceases. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. The Company is presumed to have significant influence if it holds, directly or indirectly, 20% or more of the voting power of the investee. If the Company holds less than 20% of the voting power, other relevant factors are examined by the Company to determine whether it has significant influence.

The factors that may enable the exercise of significant influence include but are not limited to: the proportion of seats on the board of directors being assigned to the Company; the nature of the business decisions that require unanimous consent of the directors; the ability to influence the operating, strategic and financing decisions; and the existing ownership composition regarding the Company’s ability to exercise significant influence.

The principal subsidiaries (operating mine sites and projects) of the Company and their geographic locations at December 31, 2017 were as follows:

Direct Parent Company	Location	Ownership Percentage	Mining Properties and Development Projects Owned
Minera San Rafael, S.A.	Guatemala	100%	El Escobal mine
La Arena S.A.	Peru	100%	La Arena mine
			La Arena II Project
Shahuindo S.A.C.	Peru	100%	Shahuindo mine
Lake Shore Gold Corp.	Canada	100%	Bell Creek mine,
		100%	Timmins West mine,
		100%	Fenn-Gib Project
Temex Resources Corp.	Canada	100%	Juby Project
		79%	Whitney Project

During the year ended December 31, 2016, the Company divested of its ownership interest in Northern Superior Resources which was acquired on April 1, 2016 as part of the Lake Shore Gold acquisition and previously accounted for using the equity method. A gain of $1,059 was recognized in the consolidated statements of operations and total comprehensive income for the year ended December 31, 2016.

Intercompany assets, liabilities, equity, income, expenses and cash flows arising from intercompany transactions are eliminated in full on consolidation.

d) Foreign currency translation

Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in foreign currencies are not re-translated. Total foreign exchange gains and losses are recognized in earnings. The unrealized portion of foreign exchange gains and losses are disclosed separately in the consolidated statements of cash flows.

e) Business Combinations

A business combination is defined as an acquisition of assets and liabilities that constitute a business. A business is an integrated set of activities and assets that consist of inputs, including non- current assets, and processes, including operational processes that, when applied to those inputs, have the ability to create outputs that provide a return to the Company and its shareholders. A business also includes those assets and liabilities that do not necessarily have all the inputs and processes required to produce outputs, but can be integrated with the inputs and processes of the Company to create outputs. When acquiring a set of activities or assets in the exploration and development stage, which may not have outputs, the Company considers other factors to determine whether the set of activities or assets is a business.

Business combinations are accounted for using the acquisition method whereby identifiable assets acquired and liabilities assumed, including contingent liabilities, are recorded at their fair values at acquisition date. The acquisition date is the date at which the Company obtains control over the acquiree, which is generally the date that consideration is transferred and the Company acquires the assets and assumes the liabilities of the acquiree. The Company considers all relevant facts and circumstances in determining the acquisition date.

The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the fair values of the assets at the acquisition date transferred by the Company, the liabilities, including contingent consideration, incurred and payable by the Company to former owners of the acquiree and the equity interests issued by the Company. The measurement date for equity interests issued by the Company is the acquisition date. Acquisition-related costs are expensed as incurred.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports in its consolidated financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, the Company will retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. During the measurement period, the Company will also recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period ends as soon as the Company receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable and shall not exceed one year from the acquisition date.

Non-controlling interests (“NCI”) are the equity in a subsidiary not attributable, directly or indirectly, to a parent. NCI are recorded at their proportionate share of the fair value of identifiable net assets acquired on initial recognition. Goodwill is recognized as the sum of the total consideration (acquisition date fair value) transferred by the Company, including contingent consideration and the NCI in the acquiree, less the fair value of net assets acquired.

Goodwill

Goodwill typically arises on the Company’s acquisitions due to: i) the ability of the Company to capture certain synergies through management of the acquired operation within the Company; and ii) the requirement to record a deferred tax liability for the difference between the assigned fair values and the tax bases of assets acquired and liabilities assumed.

Goodwill is not amortized. The Company performs an impairment test for goodwill annually and when events or changes in circumstances indicate that the related carrying amount may not be recoverable. If the carrying amount of a mine site or project, which is the cash-generating unit, to which goodwill has been allocated exceeds the recoverable amount, an impairment loss is recognized for the amount in excess. The impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the mine site to nil and then to the other assets of the mine site based on the relative carrying amounts of those assets. Impairment losses recognized for goodwill are not reversed in subsequent periods.

Upon disposal or abandonment of a mine site or project to which goodwill has been attributed, the carrying amount of goodwill allocated to that mine site is derecognized and included in the calculation of the gain or loss on disposal or abandonment.

f) Cash and cash equivalents and restricted cash

Cash and cash equivalents comprise cash balances and deposits with maturities of 90 days or less. Restricted cash comprises cash balances which are restricted from being immediately exchanged or used to settle a transaction and can be classified as either a current or non-current asset depending on the terms of the restriction(s).

g) Inventories

Finished goods, work-in-process, heap leach ore and stockpiled ore are measured at the lower of average cost or net realizable value. Net realizable value ("NRV") is calculated as the estimated price at the time of sale based on prevailing metal prices less estimated future costs to convert the inventories into saleable form and estimated costs to sell.

Ore extracted from the mine may be stockpiled and subsequently processed into finished goods (gold and by-products in doré or silver and by-products in concentrate form). The costs of finished goods represent the costs of work-in process inventories incurred prior to the sale of doré or concentrate. Costs are included in inventory based on current costs incurred to produce doré and concentrate, including applicable depreciation and depletion of mining interests, and removed at the cost per ounce of doré produced (gold) or cost per tonne of concentrate produced (silver and by-products).

The recovery of gold and by-products from certain oxide ore is achieved through a heap leaching process at the La Arena and Shahuindo mines. Costs are included in heap leach ore inventory based on current mining and leaching costs, including applicable depreciation and depletion of mining interests, and removed from heap leach ore inventory as ounces of gold are recovered at the average cost per recoverable ounce of gold on the leach pads. Estimates of recoverable gold on the leach pads are calculated based on the quantities of ore placed on the leach pads (measured tonnes added to the leach pads), the estimated grade of ore placed on the leach pads, and an estimated recovery percentage.

Supplies are measured at average cost. In the event that the net realizable value of the finished product is lower than the expected cost of the finished product, the supplies used in the finished product are written down to net realizable value. Replacement costs of supplies are generally used as the best estimate of net realizable value.

h) Mineral interests, plant and equipment

Mineral interests, plant and equipment are carried at cost, less accumulated depreciation and accumulated impairment losses.

On initial acquisition, mineral interests, plant and equipment are valued at cost, being the purchase price and the directly attributable costs of acquisition or construction required to bring the asset to the location and condition necessary for the asset to be capable of operating in the manner intended by management. Land is stated at cost less any impairment in value and is not depreciated, and is included in non-depletable mineral interests. When provisions for closure and decommissioning are recognized, the corresponding cost is capitalized as part of the cost of the related assets, representing part of the cost of acquiring the future economic benefits of the operation. The capitalized cost of closure and decommissioning activities is recognized in mineral interests, plant and equipment and depreciated accordingly.

Each asset or component’s estimated useful life has due regard to both its own physical life limitations and the present assessment of economic viability of the mineral interests benefitting from its use, and to possible future variations in those assessments. Estimates of remaining useful lives and residual values are reviewed on a periodic basis. Changes in estimates are accounted for prospectively.

Borrowing costs directly relating to the financing of a qualifying project are added to the capitalized cost of those projects until such time as the assets are substantially ready for their intended use or sale which, in the case of mineral interests, is when commercial production is achieved.

Expenditure on major maintenance or repairs includes the cost of the replacement of parts of assets and overhaul costs. Where an asset or part of an asset is replaced and it is probable that future economic benefits associated with the item will be available to the Company, the expenditure is capitalized and the carrying amount of the item replaced derecognized. Similarly, overhaul costs associated with major maintenance are capitalized and depreciated over their useful lives where it is probable that future economic benefits will be available and any remaining carrying amounts of the cost of previous overhauls are derecognized. All other costs are expensed as incurred.

Operational mineral interests and mine development

When it has been determined that a mineral interest can be economically developed, the costs incurred to develop such interest are capitalized.

Major development expenditures on producing mineral interests incurred to increase production or extend the life of the mine are capitalized while ongoing mining expenditures on producing mineral interests are charged against earnings as incurred.

Costs associated with commissioning activities are capitalized until the date the Company is ready to commence commercial production.

A mine is ready to commence commercial production when it is capable of operating at levels intended by management. The main criteria management uses to assess operating levels are:

• Operational commissioning of major mine and plant components is complete;

• Operating results are being achieved consistently for a period of time;

• Indicators that these operating results will continue; and

• Other factors which can include:

◦ Significant milestones for the development of the mineral interests have been achieved;

◦ A significant portion of plant/mill/pad capacity has been achieved;

◦ A significant portion of available funding is directed towards operating activities rather than capital projects; or

◦ A pre-determined, reasonable period of time has passed.

Management may use additional criteria to determine mine-specific operating levels for commercial production.

Any revenues earned during this period are recorded as a reduction in construction capital. These costs are amortized using the units-of-production method (“UOP”) over the life of the mine, commencing on the date of commercial production.

Costs related to the acquisition of land and mineral rights are capitalized as incurred.

Assets under construction are capitalized as construction-in-progress. The cost of construction-in-progress comprises its purchase price and any costs directly attributable to bringing it into working condition for its intended use. Construction-in-progress is not depreciated. Once the asset is complete and available for use it is transferred to mineral interests, plant and equipment and depreciation commences.

Deferred Stripping

In open pit mining operations, it is necessary to remove mine waste materials or overburden to gain access to mineral ore deposits. Stripping costs incurred during the development phase of the mine (prior to commercial production) are capitalized and deferred as part of the cost of building, developing and constructing the mine (included in mineral interests) if the costs relate to anticipated future benefits and meet the definition of an asset. Once commercial production begins, the capitalized stripping costs are amortized using the units of production (“UOP”) method over the estimated life of the component to which they pertain.

During the production phase, to the extent the benefit from the stripping activity is realized in the form of inventory produced, the stripping costs are considered variable production costs and are included in the costs of the inventory during the period in which they are incurred. If the benefit from the stripping activity during the production phase provides access to deeper levels of material that will be mined in future periods, the stripping costs, including directly attributable overhead costs, are capitalized as part of mineral interests and amortized using the UOP method over the estimated life of the component to which they pertain. Stripping costs during the production phase are recognized as an asset if all the following criteria are met:

• It is possible that the future benefit, i.e. improved access to the ore body, associated with the stripping activity will flow to the entity;

• The Company can identify the component of the ore body for which access has been improved; and

• The stripping activity costs associated with the component can be measured reliably.

Stripping activity occurs on separately identifiable components of the open pit and the amount capitalized is calculated by multiplying the tonnes removed for stripping purposes from each identifiable component during the period by the mining cost per tonne. If the stripping costs cannot be attributed to a separately identifiable component, they are allocated to inventory and mineral interests based on the actual waste-to-ore ratio (“strip ratio”) of material extracted compared to the estimated strip ratio.

Depreciation of mineral interests, plant and equipment

The carrying amounts of mineral interests, plant and equipment are depreciated to their estimated residual value over the estimated useful lives of the specific assets concerned, or the estimated life of the associated mine, if shorter. Estimates of residual values and useful lives are reviewed on a periodic basis and any change in estimate is taken into account in the determination of remaining depreciation charges, and adjusted if appropriate, at each reporting period. Changes to the estimated residual values or useful lives are accounted for prospectively. Depreciation commences on the date when the asset is available for use as intended by management.

Units of production basis (“UOP”)

For mineral interests and certain mining equipment, the economic benefits from the asset are consumed in a pattern which is linked to the production level. Except as noted below, such assets are depreciated on a UOP basis. In applying the UOP method, depreciation is normally calculated using the quantity of material extracted from the mine in the period as a percentage of the total quantity of material to be extracted in current and future periods based on life-of-mine reserves and, if appropriate, a portion of the resources where it is considered highly probable that those mineral resources will be economically extracted.

Upon declaration of commercial production, the carrying amounts of mineral interests are depleted using the UOP over the estimated life of mine based on proven and probable mineral reserves and, if appropriate, the portion of mineral resources where it is considered highly probable that those mineral resources will be economically extracted. Economic extraction is considered highly probable for those mineral resources where sufficient drill data exists, geologic interpretation has been undertaken and management has included the mineral resources in the life of mine plan. The life of mine plan represents management’s best estimate of the future economic benefits expected to be obtained from the mineral properties and therefore the production levels contained in these plans may include mineral resources in each of the measured, indicated and/or inferred mineral resources category. The percentage of measured, indicated and/or inferred mineral resources to be included in the estimated recoverable ounces of a mining property and depleted using the unit-of-production method is determined on a site by site basis using the most current life of mine plan for each site and includes considerations of the following factors:

• The Company’s history of converting mineral resources to mineral reserves at its operations has ranged from 40% to 80%; the Company recognizes past performance may not be indicative of future mineral resource to mineral reserve conversion rates;

• The type of deposit(s) at each mine site; and

• The geological characteristics of the ore body and its impact to the costs related to the access of the resources.

At sites where there is a lower confidence of mineral resources or where production calculated in the life of mine models does not exceed the mineral reserves, no mineral resources are included in the estimated recoverable ounces for those sites.

If commercial production commences prior to the determination of proven and probable mineral reserves, depletion is calculated based on the mineable portion of the resource as defined in the life of mine plan.

For the years ended December 31, 2017 and 2016, all of the Company’s operating mines were depleted using the UOP method over the estimated life of mine based on proven and probable reserves and the portion of resources expected to be converted to mineral reserves (depletion at Shahuindo began May 1, 2016, the commencement of commercial production).

Straight line basis

For all other assets depreciation is recognized in earnings or loss on a straight line basis over the estimated useful lives of each part of an item (component), since this most closely reflects the expected pattern of consumption of economic benefits embodied in the asset. The estimated useful lives for assets and components that are depreciated on a straight line basis range from 2 to 20 years.

Depreciated Items	Useful Life
Computer equipment and software	2 - 5 years
Vehicles	3 - 5 years
Mining equipment	2 - 14 years
Ancillary facilities(1)	20 Years
Mineral interests and plant	UOP

⁽¹⁾  The lessor of 20 years or life of mine (“LOM”).

Impairment and Disposal

At the end of each reporting period the Company reviews whether there is any indication that the assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of the asset’s fair value less costs to sell and its value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in earnings or loss for the period. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit (“CGU”) to which the asset belongs.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in earnings or loss.

Where an item of mineral interests, plant and equipment is disposed of, it is derecognized and the difference between its carrying value and net sales proceeds is disclosed as earnings or loss on disposal in the consolidated statements of operations and total comprehensive income (loss). Any items of mineral interests, plant or equipment that cease to have future economic benefits are derecognized with any gain or loss included in the financial year in which the item is derecognized.

i) Exploration and evaluation assets

The cost of exploration and evaluation assets acquired through a business combination or an asset acquisition are capitalized, as are expenditures incurred for the acquisition of land and surface rights. All other exploration and evaluation expenditures are expensed as incurred, including those incurred before the Company has obtained the legal rights to explore an area of interest.

Capitalization of evaluation expenditures commences when the technical feasibility and commercial viability of a project has been reached and hence it is probable that future economic benefits will flow to the Company.

Capitalized exploration and evaluation costs are classified as non-depletable mineral interests within mineral interests, plant and equipment.

Corporate general and administrative costs related to exploration and evaluation assets are expensed as incurred.

j) Leases

In addition to contracts which take the legal form of a lease, other significant contracts are assessed to determine whether, in substance, they are or contain a lease, if the contractual arrangement contains the use of a specific asset and the right to use that asset. Where the Company receives substantially all the risks and rewards of ownership of the asset, these assets are capitalized at the lower of the fair value of the lease asset or the estimated present value of the minimum lease payments. The corresponding lease obligation is included within lease obligations and accretion expense is recognized over the term of the lease.

The Company will engage in sale and leaseback transactions as part of its financing strategy if and when it is deemed appropriate. Where a sale and leaseback transaction results in a finance lease, any excess of sales proceeds over the carrying amount is deferred and amortized over the lease term. Where a sale and leaseback transaction results in an operating lease, and it is clear that the transaction is established at fair value, any profit or loss is recognized immediately. If the sales price is below fair value, the shortfall is recognized in income immediately, except that, if the loss is compensated for by future lease payments at below market prices, it is deferred and amortized in proportion to the lease payments over the period for which the asset is expected to be used. If the sale price is above fair value, the excess over fair value is deferred and amortized over the period the asset is expected to be used.

Operating leases are not capitalized and payments are included in the consolidated statements of operations and total comprehensive income (loss) on a straight-line basis over the term of the lease.

k) Provision for site reclamation and closure costs

The Company recognizes a liability for site closure and reclamation costs in the period in which it is incurred for disturbance to date, if a reasonable estimate of costs can be made. The Company records the net present value of estimated future cash flows associated with site closure and reclamation as a liability when the liability is incurred and increases the carrying value of the related assets for that amount. Subsequently, these capitalized costs are amortized over the life of the related assets. At the end of each reporting period, the estimated net present value of reclamation and closure cost obligations is assessed to reflect the passage of time (accretion expense) and changes in the estimated future cash flows underlying any initial estimates.

l) Financial instruments

Financial assets and liabilities are recognized when the Company or its subsidiaries become party to the contracts that give rise to them and are classified as loans and receivables, financial instruments at FVTPL, held-to-maturity, available for sale financial assets and other liabilities, as appropriate. The Company considers whether a contract contains an embedded derivative when the entity first becomes a party to it. The embedded derivatives are separated from the host contract if the host contract is not measured at FVTPL and when the economic characteristics and risks are not closely related to those of the host contract. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.

The Company ceases to recognize financial assets when the contractual rights to the cash flows from the assets expire, or it transfers the rights to receive the contractual cash flows on the financial assets in a transaction in which substantially all the risks and rewards of ownership of the financial assets are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset.

Other financial liabilities are recognized initially at fair value net of any directly attributable transaction costs. Subsequent to initial recognition, current debt is measured at amortized cost using the effective interest method and the currency swap was measured at FVTPL.

Financial assets at fair value through profit or loss

Financial assets at FVTPL include financial assets held for trading and financial assets designated upon initial recognition as at FVTPL. A financial asset is classified in this category principally for the purpose of selling in the short term, or if so designated by management. The Company holds warrants in certain public companies; the warrants are considered derivatives and measured at fair value, with changes in fair value at each period end recorded in earnings. Transaction costs are expensed as incurred.

Available for sale financial assets

AFS financial assets are those non-derivative financial assets that are designated as such or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL. AFS financial assets are measured at fair value upon initial recognition and at each period end, with unrealized gains or losses being recognized as a separate component of equity in other comprehensive income (loss) until the investment is derecognized or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in earnings. The Company classifies its investments in certain public companies as AFS.

Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are initially recognized at the transaction value and subsequently carried at amortized cost using the effective interest method. Gains and losses are recognized in the statement of operations and comprehensive income when the loans and receivables are derecognized or impaired, as well as through the amortization process. Interest income is recognized by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Other financial liabilities

Other financial liabilities, including loans and borrowings, are recognized initially at fair value, net of transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest method. Gains and losses are recognized in earnings when the liabilities are derecognized as well as through the amortization process. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date, and are derecognized when, and only when, the Company’s obligations are discharged or they expire.

Derivative instruments

Derivative instruments, including embedded derivatives, are recorded at fair value on initial recognition and at each subsequent reporting period. Any gains or losses arising from changes in fair value on derivatives are recorded in the statement of operations and comprehensive income.

Fair values

The fair value of quoted investments is determined by reference to market prices at the close of business on the statement of financial position date. Where there is no active market, fair value is determined using valuation techniques. These include using recent arm’s length market transactions; reference to the current market value of another instrument which is substantially the same; discounted cash flow analysis; and, pricing models.

Impairment of financial assets

Financial assets, other than those recorded at FVTPL, are assessed for indicators of impairment at each period end. A financial asset is considered impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investments have been adversely impacted.

If an available for sale asset is impaired, the change in fair value is transferred to earnings in the period, including cumulative gains or losses previously recognized in other comprehensive income (loss). Reversals of impairment in respect of equity instruments classified as available for sale are not recognized in earnings but included in other comprehensive income (loss).

m) Share capital

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares are recognized as a deduction from equity, net of any tax effects.

The Company offers a dividend reinvestment plan for its common shareholders. Participation is optional and under the terms of the plan, cash dividends on common shares are used to purchase additional common shares. The common shares are issued from the Company’s treasury at a 3% discount to the average market price. The Company maintains the right to reduce or eliminate the discount at any time.

The company has suspended the active operation of its dividend reinvestment program effective August 8, 2017.

n) Revenue recognition

Revenue is recognized when the significant risks and rewards of ownership have passed to the buyer; it is probable that economic benefits associated with the transaction will flow to the Company; the sale price can be measured reliably; the Company has no significant continuing involvement; and the costs incurred or to be incurred in respect of the transaction can be measured reliably. In circumstances where title is retained to protect the financial security interests of the Company, revenue is recognized when the significant risks and rewards of ownership have passed to the buyer.

Revenues and trade receivables on concentrate sales are subject to adjustment upon final settlement of metal prices, weights, and assays as of a date that is typically a few months after the shipment date. The Company records adjustments to concentrate revenues and trade receivables monthly based on quoted forward prices for the expected settlement period. Adjustments for weights and assays are recorded when results are determinable or on final settlement. A portion of trade receivables are therefore measured at FVTPL and changes in value are recorded in revenues. Treatment and refining charges are netted against revenues from metal concentrate sales.

Revenues and trade receivables on doré sales are recorded at the time the refined metal is transferred to the customer’s account.

Until a mine is operating at the level intended by management, revenues will be offset against mineral interests, plant and equipment costs.

o) Share-based payments

Share-based compensation arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions. If the fair value of the goods or services received cannot be estimated reliably, the share-based payment transaction is measured at the fair value of the equity instruments granted at the date the Company receives the goods or the services.

The fair value of share-based compensation on the grant date to key management personnel and employees is recognized as an expense, with a corresponding increase in equity, over the period that the optionee becomes unconditionally entitled to the options. The amount recognized as an expense is adjusted to reflect the actual number of share options for which the related service and vesting conditions are met.

The amount payable in respect of share appreciation rights ("SARs"), which are settled in cash, is recognized as an expense with a corresponding increase in liabilities over the period that the rights are exercisable. The liability is measured at each reporting date using the Black-Scholes option pricing model and is recorded at fair value.

p) Income taxes

Income tax on the earnings or loss for the years presented comprises current and deferred tax. Income tax is recognized in earnings or loss in the statements of operations except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax expense is the expected tax payable on the taxable income for the period, using tax rates substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for temporary differences which arise on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting, nor taxable earnings or loss. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet reporting date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable earnings will be available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent it is no longer probable that the related tax benefit will be realized.

q) Earnings (loss) per share

The Company presents basic and diluted earnings (loss) per share (“EPS”) data for its common shares. Basic EPS is calculated by dividing earnings (loss) attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year.

Diluted EPS is determined by adjusting the earnings (loss) attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares.

r) Other comprehensive income (loss)

Other comprehensive income (loss) is the change in the Company’s net assets that results from transactions, events and circumstances from sources other than the Company’s shareholders and includes items that are not included in net earnings such as unrealized gains and losses on financial assets classified as AFS, net of income taxes and gains or losses on certain derivative instruments.

s) Employee benefits

The Company has defined contribution pension plans which cover certain of the Company’s employees. Under the provisions of the plans, the Company contributes a fixed percentage of the employees’ salaries to the pension plans. The employees are able to direct the contributions into a variety of investment funds offered by the plans. Pension costs associated with the Company’s required contributions under the plans are recognized as an expense when the employees have rendered service entitling them to the contribution and are charged to earnings or loss, or capitalized to mining interests for employees directly involved in the specific projects. The Company has no further legal or constructive obligation once the contributions have been paid.

t) Investments in associates

The Company’s investments in associates are accounted for using the equity method of accounting. Under the equity method, the Company’s investment in an associate is initially recognized at cost and subsequently increased or decreased to recognize the Company's share of earnings and losses of the associate and for impairment losses after the initial recognition date. The Company’s share of an associate’s losses that are in excess of its investment in the associate are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. The Company's share of earnings and losses of associates are recognized in earnings during the period.

After application of the equity method, the Company determines whether it is necessary to recognize an impairment loss on the Company’s investment in an associate. The Company determines at each statement of financial position date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount in earnings. When a group entity transacts with an associate of the Company, profits and losses are eliminated to the extent of the Company’s interest in the relevant associate.

u) Care and Maintenance costs

Under certain circumstances the Company’s operations may be placed on Care and Maintenance status. During such times costs associated with maintaining the mine will be aggregated and reflected on the statement of operations in a separate line. These costs will be reported separately from production costs and will include all necessary costs to sustain the operations during these periods.

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CHANGES IN ACCOUNTING POLICIES AND STANDARDS

12 Months Ended

Dec. 31, 2017

Accounting Policies, Changes In Accounting Estimates And Errors [Abstract]

CHANGES IN ACCOUNTING POLICIES AND STANDARDS

CHANGES IN ACCOUNTING POLICIES AND STANDARDS

a) Application of new or amended accounting standards effective January 1, 2017

New or amended standards adopted in the Company’s consolidated financial statements.

The Company has adopted the following new or amended IFRS standards for annual periods beginning on or after January 1, 2017. The Company has determined there to be no material impact on the consolidated financial statements upon adoption:

IAS 7 – Statement of Cash Flows; and

• IAS 12 – Income Taxes.

b) Future accounting standards and interpretations

A number of new IFRS standards, and amendments to standards and interpretations, are not yet effective for the year ended December 31, 2017, and have not been applied in preparing these consolidated financial statements.

The Company has evaluated or is currently evaluating the impact the following standards are expected to have on its consolidated financial statements:

i. New or amended standards effective January 1, 2018 and thereafter.

• IFRS 9 – Financial Instruments;

• IFRS 15 – Revenue from Contracts with Customers; and

• IFRS 16 – Leases.

In July 2014, the IASB issued the final version of IFRS 9 “Financial Instruments” (“IFRS 9”), which replaces IAS 39 “Financial Instruments: Recognition and Measurement” (“IAS 39”). IFRS 9 is effective for annual periods beginning on or after January 1, 2018.

IFRS 9 provides a revised model for classification and measurement of financial assets, including a new “expected credit loss” impairment model. The revised model for classifying financial assets results in classification according to their contractual cash flow characteristics and the business models under which they are held. IFRS 9 introduces a reformed approach to hedge accounting. IFRS 9 also largely retains the existing requirements in IAS 39 for the classification of financial liabilities.

The Company will adopt IFRS 9 for the annual period beginning January 1, 2018 on a retrospective basis, using certain available transitional provisions.

The Company has completed its assessment of the impact of IFRS 9 and does not expect the new standard to have a material impact on the consolidated financial statements.

In May 2014, the IASB issued IFRS 15 “Revenue from Contracts with Customers” (“IFRS 15”). IFRS 15 replaces IAS 11 “Construction Contracts”, IAS 18 “Revenue”, IFRIC 13 “Customer Loyalty Programmes”, IFRIC 15 “Agreements for the Construction of Real Estate”, IFRIC 18 “Transfer of Assets from Customers” and SIC 31 “Revenue - Barter Transactions Involving Advertising Services”, and is effective for annual periods beginning on or after January 1, 2018.

The standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract‐based five‐step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized.

The Company will adopt IFRS 15 for the annual period beginning January 1, 2018 using the modified retrospective approach. Under this approach, the Company will recognize transitional adjustments in retained earnings on the date of adoption (January 1, 2018), without restating the comparative financial statements on a retrospective basis.

The Company has completed its assessment of the impact of IFRS 15 and does not expect the new standard to have a material impact on the consolidated financial statements and there is no material impact at January 1, 2018.

IFRS 16 was issued by the IASB on January 13, 2016, and will replace IAS 17, Leases. The new Standard will bring most leases on-balance sheet for lessees under a single model, eliminating the distinction between operating and finance leases. Lessor accounting however, remains largely unchanged and the distinction between operating and finance leases is retained. IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019. Earlier application is permitted if IFRS 15, Revenue from Contracts with Customers, has been applied. The Company is currently evaluating the impact of IFRS 16 on its consolidated financial statements.

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CRITICAL JUDGMENTS AND ESTIMATES IN APPLYING ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2017

Corporate Information And Statement Of IFRS Compliance [Abstract]

CRITICAL JUDGMENTS AND ESTIMATES IN APPLYING ACCOUNTING POLICIES

CRITICAL JUDGMENTS AND ESTIMATES IN APPLYING ACCOUNTING POLICIES

The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments and estimates that affect the application of accounting policies and the reported amounts of assets, liabilities, contingent liabilities, income and expenses. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and applied prospectively.

a) Judgments

i. Commercial Production

In order to declare commercial production, a mine must be able to operate at levels intended by management. Prior to commercial production costs incurred are capitalized as part of the cost of placing the asset into service and proceeds from the sale of concentrates and doré are offset against the costs capitalized. Subsequent to the declaration of commercial production depletion of the costs incurred begins. Management considers several criteria in determining when a mine is operating at levels intended, and is therefore in commercial production.

ii. Functional Currency

The functional currency for each of the Company and its subsidiaries is the currency of the primary economic environment in which the entity operates. The Company has determined that for each subsidiary the functional currency is the United States dollar. When determining the functional currency certain judgments may be involved to assess the primary economic environment in which the entity operates. If there is a change in events or conditions which determined the primary economic environment, the Company reevaluates the functional currency for each of the subsidiary impacted.

iii. Economic recoverability and probability of future economic benefits of exploration, evaluation and development costs.

The Company makes determinations whether development and related costs incurred which have been capitalized are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits including geological and metallurgical information, economic assessments and existing permits for the life of mine plan. The estimates contained within these criteria could change over time which could affect the economic recoverability of capitalized costs.

b) Estimates

i. Revenue recognition

As is customary in the industry, revenue on provisionally priced concentrate sales is recognized based on relevant forward market prices. At each reporting period, provisionally priced concentrate sales are marked to market based on the estimated forward price for the quotational period stipulated in the contract. The adjustment to provisionally priced metal sold is included in concentrate revenue.

ii. Estimated material in the Mineral Reserves

The figures for Mineral Reserves and Mineral Resources are determined in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), issued by the Canadian Securities Administrators. NI 43-101 articulates the standards of disclosure for mineral projects including rules relating to the determination of Mineral Reserves and Mineral Resources. Management assesses the estimated Mineral Reserves and Mineral Resources used in the calculation of depletion at least annually, or whenever facts and circumstances warrant that an assessment should be made. Changes to estimates of Mineral Reserves and Mineral Resources and depletable costs including changes resulting from revisions to the Company's mine plans and changes in metal price forecasts can result in a change in future depletion rates.

Where commercial production has commenced but proven and probable reserves have yet to be established, the carrying amounts of the Company’s depletable mineral interests are depleted based on the mineable portion of measured and indicated resources.

iii. Determination of Useful Lives

Plant and equipment other than mineral interests are depreciated using the straight-line method based on the specific asset’s useful life. Should the actual useful life of the plant or equipment vary from the initial estimation, future depreciation charges may change. Should the componentization of these like assets change, depreciation charges may vary materially in the future.

iv. Impairment charges

At the end of each reporting period, the Company assesses whether any indication of impairment exists. Where an indicator of impairment exists, an impairment analysis is performed. The impairment analysis requires the use of estimates and assumptions including amongst others, long-term commodity prices, discount rates, length of mine life, future production levels, future operating costs, future capital expenditures and tax positions taken. The estimates and assumptions are subject to risk and uncertainty; hence, there is the possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the individual assets or CGUs. In such circumstances, some or all of the carrying value of the assets or CGUs may be further impaired or the impairment charge reduced with the impact recorded in the consolidated statements of operations and comprehensive income (loss).

v. Reclamation provision and site closure costs

The Company’s accounting policy for the recognition of accrued site closure costs requires significant estimates and assumptions such as the requirements of the relevant environmental, legal and regulatory framework, the magnitude of possible disturbance and the timing, extent and costs of required closure and rehabilitation activity. Changes to these estimates and assumptions may result in future actual expenditures differing from the amounts currently provided for. The decommissioning liability is periodically reviewed and updated prospectively based on the available facts and circumstances.

vi. Income taxes

The Company is periodically required to estimate the tax basis of assets and liabilities. Where applicable tax laws and regulations are either unclear or subject to varying interpretations, it is possible that changes in these estimates could occur that materially affect the amounts of deferred income tax assets and liabilities recorded in the financial statements. Changes in deferred tax assets and liabilities generally have a direct impact on earnings in the period of changes. Each period, the Company evaluates the likelihood of whether some portion or all of each deferred tax asset will not be realized. This evaluation is based on historic and future expected levels of taxable income, the pattern and timing of reversals of taxable temporary timing differences that give rise to deferred tax liabilities, and tax planning initiatives. Levels of future taxable income are affected by, among other things, the market price for saleable metals, production costs, interest rates and foreign currency exchange rates.

vii. Valuation of inventory

All inventory is valued at the lower of average cost or net realizable value. Management is required to make various estimates and assumptions to determine the value of stockpiled ore, concentrate inventories, ore stacked on leach pads and ore in process. The estimates and assumptions include surveyed quantities of stockpiled ore, in-process volumes, contained metal content, recoverable metal content, costs to recover saleable metals, payable metal values once processed and the corresponding metals prices. Changes in these estimates can result in changes to the carrying amounts of inventories and mine operating costs of future periods.

viii. Deferred stripping costs

Stripping costs incurred during the production phase of a mineral property that relate to reserves and resources that will be mined in a future period are capitalized. The Company makes estimates of the stripping activity over the life of the component of reserves and resources which will be made accessible. Changes in estimated strip ratios can result in a change to the future capitalization of stripping costs incurred.

ix. Share-based compensation

The Company makes certain estimates and assumptions when calculating the fair values of share-based compensation granted. The significant estimations and assumptions include expected volatility, expected life, expected dividend yield and expected risk-free rate of return. Changes in these assumptions may result in a material change to the expense recorded for the issuance of share-based compensation.

x. Business combinations

The information necessary to measure the fair values as at the acquisition date of assets acquired and liabilities assumed requires management to make certain judgments and estimates about future events, including but not limited to:

• Estimates of mineral reserves, mineral resources and exploration potential acquired;

• Future operating costs and capital expenditures;

• Discount rates to determine fair value of assets acquired; and

• Future metal prices and long-term foreign exchange rates.

Changes to the preliminary measurements of assets and liabilities acquired may be retrospectively adjusted when new information is obtained until the final measurements are determined within one year of the acquisition date.

xi. Contingencies

Due to the size, complexity and nature of the Company’s operations, various legal and tax matters arise in the ordinary course of business. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated.

There are no matters at December 31, 2017 that are expected to have a material effect on the consolidated financial statements of the Company.

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BUSINESS COMBINATION

12 Months Ended

Dec. 31, 2017

Business Combinations1 [Abstract]

BUSINESS COMBINATION

BUSINESS COMBINATION

a) Acquisition of 100% interest in Lake Shore Gold Corp. ("Lake Shore Gold")

i. Terms of the business combination

On April 1, 2016 (the “Acquisition Date”), the Company completed the previously announced acquisition of Lake Shore Gold pursuant to a statutory plan of arrangement (the “Arrangement”). The Arrangement was approved by shareholders of the Company and the shareholders of Lake Shore Gold on March 31, 2016 and received final court approval on April 1, 2016.

The Arrangement was completed pursuant to the terms of a definitive arrangement agreement dated February 8, 2016 between the Company and Lake Shore Gold (the “Arrangement Agreement”). Pursuant to the terms of the Arrangement Agreement, Lake Shore Gold became a wholly-owned subsidiary of the Company on April 1, 2016 and all of the issued and outstanding common shares of Lake Shore Gold (each a “Lake Shore Gold Share”) were transferred to the Company in consideration for the issuance by the Company of 0.1467 of a common share for each Lake Shore Gold Share (each whole common share a “Tahoe Share”).

In connection with the closing of the Arrangement, the Company issued an aggregate of 69,239,629 Tahoe Shares to the former shareholders of Lake Shore Gold. The Company authorized the issuance of up to an additional 1,621,877 Tahoe Shares issuable upon the exercise of former stock options to acquire Lake Shore Gold Shares.

Total consideration paid was based on the April 1, 2016 opening price of Tahoe Shares on the Toronto Stock Exchange (“TSX”) of CAD$12.75 and a CAD to USD foreign exchange rate of 0.7665, and is comprised of the following:

	Shares Issued/Issuable	Consideration
Fair value estimate of the Tahoe share consideration	69,239,629	$	676,670
Fair value estimate of the consideration for options(1)	1,621,877	8,436
Total consideration	70,861,506	$	685,106

⁽¹⁾  The fair value of the options was determined using the Black-Scholes option pricing model. Where applicable, the inputs and ranges used in the measurement of the fair value (CAD) of the options were as follows:

Share price (CAD) at April 1, 2016	$	12.75
Exercise price (CAD)	2.79-25.97
Expected volatility	48.41%-62.60%
Expected life (years)	0.04-4.67
Expected dividend yield	2.46		%
Risk-free interest rate	0.54%-0.62%
Fair value (CAD)	0.01-9.65
April 1, 2016 CAD to USD exchange rate	$	0.77
Fair value (USD)	0.01-7.40

This acquisition has been accounted for as a business combination with Tahoe as the acquirer. The allocation of the purchase price has been finalized. Management determined the fair values of identifiable assets and liabilities, measured the associated deferred income tax assets and liabilities, and determined the value of goodwill.

The final allocation of the purchase price is as follows:

Cash and cash equivalents	$	70,187
Trade and other receivables	4,930
Inventories	13,774
Other current and non-current assets	3,876
Property, plant and equipment	174,747
Mineral interests and exploration potential	615,939
Goodwill(1)	54,617
Accounts payable, accrued liabilities and other(2)	(45,246		)
Lease obligation	(16,589		)
Reclamation provision	(3,721		)
Convertible debentures	(105,693		)
Deferred tax liability	(81,715		)
Total net assets acquired	$	685,106

⁽¹⁾  Goodwill of $54,617 was recognized due to the deferred tax liability generated on the business combination. The total amount of goodwill that is expected to be deductible for tax purposes is $nil.

⁽²⁾  Accounts payable, accrued liabilities and other includes a liability of $2,131 relating to PSUs which were outstanding and not converted prior to the acquisition on April 1, 2016. The PSUs were converted into 211,442 commons shares of the Company during the year ended December 31, 2016.

Lake Shore Gold’s principal mining properties are its 100% owned Bell Creek and Timmins West gold mines (together the “Timmins mines”) located in northeastern Ontario, Canada (note 23). Total transaction costs incurred relating to the acquisition and included in general and administrative expenses for the year ended December 31, 2016 are $11,134. Included in these transaction costs are 455,019 common shares of the Company issued with a value of $5,332.

The acquisition supports the Company’s growth strategy by adding high-quality assets which will increase the sustainable production level, contribute to cash flow and diversify the Company’s operations.

ii. Convertible debentures

Lake Shore Gold had outstanding a class of 6.25% convertible unsecured debentures (the “Debentures”), which were governed by an indenture dated September 7, 2012, as supplemented effective April 1, 2016. On April 1, 2016, as a result of the completion of Tahoe’s acquisition of Lake Shore Gold, Lake Shore Gold gave notice of its offer to purchase in exchange for Tahoe Shares, all of its outstanding Debentures at 100% of the principal amount plus accrued and unpaid interest (the “Change of Control Offer”).

Concurrently with the Change of Control Offer, Lake Shore Gold gave notice of its election to redeem the Debentures on May 16, 2016 at a price equal to their principal amount plus accrued and unpaid interest. The Company elected to satisfy its obligation to repay the principal amount of the Debentures by issuing Tahoe Shares to the holders of the Debentures. The number of Tahoe Shares to be issued was determined by dividing the aggregate principal amount of the outstanding Debentures redeemed by 95% of the volume weighted average trading price of Tahoe Shares on the TSX for the 20 trading days ended on and including May 9, 2016.

Debentureholders maintained the right to convert the Debentures at any time prior to May 13, 2016 at a conversion price of CAD$9.5433 per Tahoe Share, being a conversion rate of 104.7856 Tahoe Shares per $1,000 principal amount of the Debentures. An aggregate of 10,611,411 Tahoe Shares were issued pursuant to the exercise of conversion rights available to the debentureholders. The Debentures remaining outstanding after voluntary conversions were redeemed by Lake Shore Gold on May 16, 2016 for an aggregate of 122,264 Tahoe Shares, and the Debentures were delisted from trading on the Toronto Stock Exchange at the close of business that day. As a result of the redemption of the remaining debentures during the year ended December 31, 2016, the Company recognized a non-cash loss of $32,304 reflecting the appreciation of Tahoe’s share price between the closing price on April 1, 2016 and completion of the redemption on May 16, 2016.

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CASH AND CASH EQUIVALENTS

12 Months Ended

Dec. 31, 2017

Cash and cash equivalents [abstract]

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS

	December 31, 2017		December 31, 2016
Cash	$	125,134	$	162,841
Cash equivalents(1)	531		527
	$	125,665	$	163,368

⁽¹⁾ Marketable securities with short-term maturities of less than 90 days

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TRADE AND OTHER RECEIVABLES

12 Months Ended

Dec. 31, 2017

Subclassifications of assets, liabilities and equities [abstract]

TRADE AND OTHER RECEIVABLES

TRADE AND OTHER RECEIVABLES

	December 31, 2017		December 31, 2016
Trade receivables	$	—	$	18,997
Sales tax receivable	28,138		42,844
Income tax receivable	10,005		1,419
Other	1,474		1,386
	$	39,617	$	64,646

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INVENTORIES

12 Months Ended

Dec. 31, 2017

Inventories [Abstract]

INVENTORIES

INVENTORIES

	December 31, 2017		December 31, 2016
Supplies	$	57,195	$	56,612
Stockpile	23,029		16,940
Work in process	21,129		27,649
Finished goods	27,028		25,417
	$	128,381	$	126,618

The cost of inventories recognized as an expense for the year ended December 31, 2017 was $501,682 (year ended December 31, 2016: $457,465) and is included in total operating costs. No NRV adjustments or write-downs were taken in 2017.

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MINERAL INTERESTS

12 Months Ended

Dec. 31, 2017

Property, plant and equipment [abstract]

MINERAL INTERESTS

MINERAL INTERESTS

	Mineral Interests
	Depletable			Non- Depletable(4)			Plant & Equipment			Total
Cost
Balance at January 1, 2017	$	1,524,323		$	637,644		$	899,513		$	3,061,480
Additions	47,952			43,184			141,011			232,147
Disposals	—			—			(8,204		)	(8,204		)
Transfers(1)	13,013			(13,402		)	389			—
Change in reclamationprovision	(3,347		)	1,437			—			(1,910		)
Balance at December 31, 2017	$	1,581,941		$	668,863		$	1,032,709		$	3,283,513
Accumulated depreciation anddepletion
Balance at January 1, 2017	$	(365,248	)	$	—		$	(139,279	)	$	(504,527	)
Additions(2)	(116,796		)	(2,049		)	(50,491		)	(169,336		)
Disposals	—			—			7,139			7,139
Transfers	—			—			—			—
Balance at December 31, 2017	$	(482,044	)	$	(2,049	)	$	(182,631	)	$	(666,724	)
Carrying amount atDecember 31, 2017	$	1,099,897		$	666,814		$	850,078		$	2,616,789

	Mineral Interests
	Depletable			Non- Depletable(4)			Plant & Equipment			Total
Cost
Balance at January 1, 2016	$	714,011		$	737,108		$	595,377		$	2,046,496
Acquired mineral interests(3)(4)	278,489			337,450			174,747			790,686
Additions	69,178			7,128			134,802			211,108
Disposals	—			—			(5,413		)	(5,413		)
Transfers	444,042			(444,042		)	—			—
Change in reclamation provision	18,603			—			—			18,603
Balance at December 31, 2016	$	1,524,323		$	637,644		$	899,513		$	3,061,480
Accumulated depreciation and depletion
Balance at January 1, 2016	$	(169,160	)	$	(121,000	)	$	(81,824	)	$	(371,984	)
Additions	(75,088		)	—			(61,933		)	(137,021		)
Disposals	—			—			4,478			4,478
Transfers (5)	(121,000		)	121,000			—			—
Balance at December 31, 2016	$	(365,248	)	$	—		$	(139,279	)	$	(504,527	)
Carrying amount at December 31, 2016	$	1,159,075		$	637,644		$	760,234		$	2,556,953

⁽¹⁾  The resource statements published in January 2017 reflect an increase to the depletable base at the Timmins West mine of 72,904 ounces. These ounces were transferred from non-depletable to depletable mineral interests.

⁽²⁾  The resource statements published in January 2017 reflect a decrease to the in-situ ounces at the Timmins West mine which resulted in an impact of $2,049 to non-depletable mineral interests.

⁽³⁾  Acquired mineral interests relate to the acquisition of Lake Shore Gold on April 1, 2016.

⁽⁴⁾  Non-depletable mineral interests acquired as part of the acquisition of Lake Shore Gold on April 1, 2016 include the Whitney, Fenn-Gib and Juby projects, and other exploration potential.

⁽⁵⁾  Upon declaration of commercial production on May 1, 2016, the carrying value of mineral interests and the impairment associated with the Shahuindo mine included in non-depletable mineral interests were transferred to depletable mineral interests. All pre-operating revenues from production at Shahuindo were credited against construction capital through April 30, 2016.

A summary by segment of the carrying amount of mineral interests is as follows:

	Mineral Interests
	Depletable		Non- Depletable(2)		Plant & Equipment		December 31, 2017		December 31, 2016
Escobal	$	486,592	$	27,267	$	262,506	$	776,365	$	785,888
La Arena	10,443		216,910		205,824		433,177		451,551
Shahuindo	295,513		58,587		173,725		527,825		482,685
Timmins mines(1)	307,349		364,050		208,023		879,422		836,829
	$	1,099,897	$	666,814	$	850,078	$	2,616,789	$	2,556,953

⁽¹⁾  The Timmins mines were acquired on April 1, 2016 as part of the Lake Shore Gold acquisition.

⁽²⁾  Non-depletable mineral interests include exploration and evaluation projects. Non-depletable mineral interests for La Arena include the book value of the La Arena II project.

As at December 31, 2017, the Company has $10,157 (December 31, 2016: $4,206) in capitalized stripping costs relating to production phase stripping of the La Arena and Shahuindo mines.

a) Goodwill

Goodwill typically arises on the Company’s business combinations due to: i) the ability of the Company to capture certain synergies through management of the acquired operation within the Company; and ii) the requirement to record a deferred tax liability for the difference between the assigned fair values and the tax bases of assets acquired and liabilities assumed.

The carrying amount of goodwill has been allocated to the following cash generating units (“CGUs”) and is included in the respective operating segment assets:

	La Arena II(1)		Timmins Exploration Potential(2)		Total
January 1, 2016	$	57,468	$	—	$	57,468
Additions	—		54,617		54,617
December 31, 2016	$	57,468	$	54,617	$	112,085
Additions	—		—		—
December 31, 2017	$	57,468	$	54,617	$	112,085

⁽¹⁾  The La Arena II CGU (previously "La Arena Sulphides") is included in the La Arena operating segment as non-depletable mineral interests.

⁽²⁾  The allocation of goodwill associated with the acquisition of Lake Shore Gold was allocated 100% to the Timmins Exploration Potential CGU which is included in the Timmins mines operating segment as non-depletable mineral interests.

b) Impairment

The Company assesses indicators of impairment or reversal of impairment on a quarterly and annual (at October 1) basis for all CGUs and tests those CGUs for which indicators exist. Goodwill is tested at least annually or when there are indicators of impairment. The purpose of the impairment testing is to determine if the recoverable amount (fair value less costs of disposal (“FVLCD”)) of a CGU is greater than its carrying value.

The Company identified six CGUs for which indicators of impairment were assessed: Escobal, La Arena oxides, La Arena II (previously La Arena sulfides), Shahuindo, Timmins mines and the Timmins Exploration Potential. In the current year, goodwill was tested at La Arena II and Timmins Exploration Potential, and there were impairment indicators at the Escobal mine as it was on care and maintenance. No impairment was recognized in 2017 as a result of our analysis. Discounted cash flow models were prepared using long-term prices for gold of $1,307/oz, silver of $19.54/oz and copper of $3.30/lb (2016: $1,250/oz, silver price - $17.50/oz and copper price $3.00/lb), discount rates between 7.0% and 8.00% (2016: 6.50% and 8.75%) depending on the development stage of the operation or project. In-situ values were used for the impairment testing of exploration potential. Based on the results, for the year ended December 31, 2017, management concluded that there was no impairment or reversal of prior impairment for any of the CGUs.

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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

12 Months Ended

Dec. 31, 2017

Trade and other payables [abstract]

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	December 31, 2017		December 31, 2016
Trade payables	$	49,487	$	70,315
Accrued trade and other payables	25,685		22,976
Royalties	16,000		15,044
Accrued payroll and related benefits	18,912		20,835
	$	110,084	$	129,170

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DEBT

12 Months Ended

Dec. 31, 2017

Financial Instruments [Abstract]

DEBT

DEBT

	2017		2016
Beginning balance at January 1	$	35,000	$	35,000
Borrowings/additions	—		35,000
Repayments	—		(35,000		)
Ending balance at December 31	$	35,000	$	35,000

The Company’s debt facilities contain covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional debt, merge, consolidate, transfer, lease or otherwise dispose of all or substantially all of its assets to any other entity.

a) Credit facility

On April 8, 2016, the Company signed a credit agreement with an international bank for a credit facility (the “Facility”) for an aggregate amount of $35 million. The Facility bears interest at LIBOR plus 2.25% on the portion drawn. The LIBOR rate was reset on October 10, 2017. The Facility has a two-year term, maturing April 9, 2018.

On April 8, 2016, proceeds from the Facility were used to repay the $35 million Loan which was acquired as part of the acquisition of Rio Alto on April 1, 2015. The Company is currently in compliance with all covenants associated with the Facility.

b) Revolving credit facility

On July 18, 2017, the Company entered into an Amended and Restated Credit Agreement (“Revolving Facility”) with a syndicate of lenders to increase its revolving credit facility from $150 million to $300 million with a US$50 million accordion feature and to extend the term to July 19, 2021. The Company paid an initial commitment fee to amend the Revolving Facility of $1.7 million. The Agreement includes terms that limit borrowing to a maximum of $75 million during the suspension of the mining license at Escobal as a result of the CALAS claim.

Based on certain financial ratios, the Revolving Facility bears interest on the portion drawn, on a sliding scale of LIBOR plus between 2.15% to 3.13% or a base rate plus 1.13% to 2.13% which is based on the Company’s consolidated net leverage ratio.

The credit facility is secured by the assets of the Company and its subsidiaries: Escobal Resources Holding Limited, Minera San Rafael, S.A., Tahoe Resources ULC, Lake Shore Gold Corp., Mexican Silver Mines Limited, La Arena S.A., Shahuindo SAC and Shahuindo Exploraciones.  Additionally, the credit facility contains covenants that, among other things, limit the ability of the Company and its subsidiaries to incur additional debt, merge, consolidate, transfer, lease or otherwise dispose of all or substantially all of its assets to any other person. Proceeds may be used for liquidity and general corporate purposes.

Standby fees for the undrawn portion of the facility are also on a similar sliding scale basis of between 0.56% and 0.81% and were $963 thousand for the year ended December 31, 2017 (year ended December 31, 2016: $886). The Revolving Facility matures on July 19, 2021.

As at December 31, 2017, the Company had not drawn on the Revolving Facility. The Company is currently in compliance with all covenants associated with the Revolving Facility. See note 29 Subsequent Events .

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LEASE OBLIGATIONS

12 Months Ended

Dec. 31, 2017

Leases1 [Abstract]

LEASE OBLIGATIONS

LEASE OBLIGATIONS

	2017			2016
Beginning balance at January 1	$	15,946		$	13,862
Additions(1)	—			24,531
Payments(2)	(9,456		)	(22,468		)
Accrued interest	451			559
Foreign exchange gain (loss)	813			(538		)
Ending balance at December 31	$	7,754		$	15,946

⁽¹⁾  2016 additions include $16,589 related to finance leases acquired as a result of the Lake Shore Gold business combination on April 1, 2016 and $7,942 in other additions.

⁽²⁾  2016 Payments include $10,420 for the retirement of the La Ramada sale-leaseback.

	December 31, 2017		December 31, 2016
Current portion	$	6,146	$	8,696
Non-current portion	1,608		7,250
	$	7,754	$	15,946

As part of the acquisition of Lake Shore Gold on April 1, 2016, the Company acquired finance lease obligations related to equipment and vehicles, expiring between 2016 and 2018 with interest rates between 0.9% and 6.9%. The Company has the option to purchase the equipment and vehicles leased at the end of the terms of the leases for a nominal amount. The Company’s obligations under the finance leases are secured by the lessor’s title to the leased assets. The fair value of the finance lease liabilities approximates their carrying amount.

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RECLAMATION PROVISION

12 Months Ended

Dec. 31, 2017

Other Provisions, Contingent Liabilities And Contingent Assets [Abstract]

RECLAMATION PROVISION

RECLAMATION PROVISION

	2017			2016
Beginning balance at January 1	$	64,219		$	39,524
Additions to reclamation provision(1)	—			3,722
Accretion expense	2,640			2,370
Revisions in estimates and obligations	(3,803		)	18,603
Ending balance at December 31(2)	$	63,056		$	64,219

⁽¹⁾  2016 additions relate to the Timmins mines acquired as a result of the Lake Shore Gold acquisition on April 1, 2016.

⁽²⁾  Ending balance includes $487 of current and $62,569 of long-term reclamation.

The Company’s environmental permits require that it reclaim any land it disturbs during mine development, construction and operations. Although the timing and the amount of the actual expenditures are uncertain, the Company has estimated the undiscounted cash flows related to the future reclamation obligations arising from its activities to December 31, 2017 to be $93,338 (December 31, 2016: $99,273).

In determining the discount rate to be used in the calculation of the present value of the future reclamation obligations, the Company combines risk and inflation rates specific to the country in which the reclamation will take place.

The present value of the combined future obligation has decreased by $3,803 during the year ended December 31, 2017 (December 31, 2016: $18,603 increase) as a result of the impact of the change in estimates in mine life, estimated reclamation costs, discount and inflation rates.

a)Escobal

The present value of the future reclamation obligation assumes a discount rate of 6.18% (December 31, 2016: 6.12%), an inflation rate of 4.12% (December 31, 2016: 4.25%), an undiscounted amount to settle the obligation of $10,306 (December 31, 2016: $10,960), and the commencement of reclamation activities in approximately 16 years.

b)La Arena

The present value of the future reclamation obligation assumes a discount rate of 3.89% (December 31, 2016: 4.18%), an inflation rate of 2.61% (December 31, 2016: 3.22%), an undiscounted amount to settle the obligation of $43,737 (December 31, 2016: $45,885), and the commencement of post-closure reclamation activities in approximately 5 years.

At December 31, 2017, the Company had a letter of credit (“LOC”) outstanding in the amount of $12,531 as partial guarantee of the La Arena closure obligations as required by the Ministry of Energy and Mines (“MEM”). The LOC was valid for one year with a renewal date of January 12, 2018. On January 3, 2018 the Company posted a renewed LOC under the same terms and totaling $13,297.

c)Shahuindo

The present value of the future reclamation obligation assumes a discount rate of 4.03% (December 31, 2016: 4.51%), an inflation rate of 2.61% (December 31, 2016: 3.22%), an undiscounted amount to settle the obligation of $22,742 (December 31, 2016: $32,124), and the commencement of post-closure reclamation activities in approximately 7 years.

At December 31, 2017, the Company had a LOC outstanding in the amount of $5.2 as partial guarantee of the Shahuindo closure obligations as required by MEM. The LOC was valid for one year with a renewal date of January 12, 2018. On January 3, 2018 the Company posted a renewed LOC under the same terms and totaling $10,390.

d)Timmins mines

The present value of the future reclamation obligation assumes a discount rate of 2.06% (December 31, 2016: 4.85%), an inflation rate of 1.31% (December 31, 2016: 1.29%), an undiscounted amount to settle the obligation of $16,242 (December 31, 2016: $10,304), and the commencement of post-closure reclamation activities in approximately 9 years.

At December 31, 2017, the Company had a bond outstanding in the amount of $9,495 as partial guarantee of the Timmins mines closure obligations as required by the Ministry of Northern Development and Mines.

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REVENUES

12 Months Ended

Dec. 31, 2017

Revenue [abstract]

REVENUES

REVENUES

			Years Ended December 31,
	2017		2016
Silver	$	170,529	$	316,793
Gold	542,702		437,464
Lead	7,274		9,738
Zinc	13,052		20,508
	$	733,557	$	784,503

a) Concentrate revenues

The Company has contracts with a number of customers for its concentrate sales. For the year ended December 31, 2017, the Company’s top four concentrate customers account for 98% of concentrate revenues (year ended December 31, 2016: top four customers accounted for 99% of concentrate revenues).

The concentrate revenues by customer for the years ended December 31, 2017 and 2016 are as follows:

			Years Ended December 31,
	2017		2016
Customer 1	18	%	34	%
Customer 2	40	%	24	%
Customer 3	13	%	23	%
Customer 4	27	%	18	%
Other customers	2	%	1	%
Total concentrate revenues	100	%	100	%

b) Doré revenues

The Company has contracts with customers for its doré sales. The Company’s top two doré customers account for 69% of doré revenues for the year ended December 31, 2017 (year ended December 31, 2016: 92% of doré revenues). For the year ended December 31, 2017, doré sales comprised 99% of total gold sales (year ended December 31, 2016: 98%). The doré revenues by customer for the years ended December 31, 2017 and 2016 as follows:

			Years Ended December 31,
	2017		2016
Customer 1	43	%	60	%
Customer 2	26	%	32	%
Other customers	31	%	8	%
Total doré revenues	100	%	100	%

The Company has determined that the loss of any single customer or curtailment of purchases by any one customer would not have a material adverse effect on the Company’s financial performance, financial condition and cash flows due to the nature of the refined metals market.

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PRODUCTION COSTS

12 Months Ended

Dec. 31, 2017

Analysis of income and expense [abstract]

PRODUCTION COSTS

PRODUCTION COSTS

			Years Ended December 31,
	2017		2016
Raw materials and consumables	$	130,185	$	163,304
Salaries and benefits	90,583		85,349
Contractors and outside services	102,064		100,557
Other expenses	19,808		1,717
Changes in inventory	5,506		(18,206		)
	$	348,146	$	332,721

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CARE AND MAINTENANCE COSTS

12 Months Ended

Dec. 31, 2017

Disclosure Of Care And Maintenance Costs [Abstract]

CARE AND MAINTENANCE COSTS

CARE AND MAINTENANCE COSTS

			Years Ended December 31,
	2017		2016
Raw materials and consumables	$	4,094	$	—
Salaries and benefits	11,499		—
Contractors and outside services	8,115		—
Other expenses	1,147		—
	$	24,855	$	—

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GENERAL AND ADMINISTRATIVE EXPENSES

12 Months Ended

Dec. 31, 2017

Analysis of income and expense [abstract]

GENERAL AND ADMINISTRATIVE EXPENSES

GENERAL AND ADMINISRATIVE EXPENSES

				Years Ended December 31,
	Notes	2017		2016
Salaries and benefits		$	18,318	$	12,934
Share-based payments	19	5,657		7,224
Consulting and professional fees		9,028		8,340
Transaction costs	6	—		11,134
Administrative and other		12,785		7,875
		$	45,788	$	47,507

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SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION

12 Months Ended

Dec. 31, 2017

Share-based Payment Arrangements [Abstract]

SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION

SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION

The Company’s equity compensation plans are designed to attract and retain individuals and to reward them for current and expected future performance. The Company’s share-based compensation arrangements are denominated in CAD and include Tahoe Share Plan Options, the Rio Alto replacement options issued on April 1, 2015 upon completion of the acquisition of Rio Alto and the Lake Shore Gold replacement options issued on April 1, 2016 upon completion of the acquisition of Lake Shore Gold (collectively, the “Share Options”), as well as Deferred Share Awards (“DSAs”), Restricted Share Awards (“RSAs”) and Share Appreciation Rights (“SARs”) (collectively with the Share Options, referred to as the “Share Plan”).

At December 31, 2017, the Company has the following share-based payment arrangements:

a) Share Options

The Share Plan entitles key management personnel, senior employees, and consultants to the option to purchase shares in the Company. Under the terms of this program, Share Options are exercisable at the market close price of the Company’s shares on the day prior to the grant date. The Share Options vest based on vesting terms set by the Compensation Committee of the Board of Directors. The Share Options vest in three equal tranches with the first tranche vesting on the first anniversary, the second on the second anniversary, and the third on the third anniversary of the grant date.

The number and weighted average exercise price in CAD of Share Options outstanding at December 31, 2017 and December 31, 2016 are as follows:

	Weighted average exercise price		Number of Share Options
Outstanding at January 1, 2016	$	14.92	4,068,457
Granted(1)	9.29		2,972,876
Exercised	9.13		(2,819,838	)
Forfeited	13.82		(335,000	)
Expired	16.57		(674,750	)
Outstanding at December 31, 2016	14.55		3,211,745
Granted	9.91		1,407,000
Exercised	10.82		(112,136	)
Forfeited	13.68		(307,000	)
Expired	17.37		(332,584	)
Outstanding at December 31, 2017	$	12.79	3,867,025

⁽¹⁾  Includes the replacement options granted on April 1, 2016 as a result of the acquisition of Lake Shore Gold (note 6).

The following table summarizes information about Share Options outstanding and exercisable at December 31, 2017 (exercise range and prices in CAD):

Exercise price range	Outstanding	Weighted average exercise price		Weighted average remaining life (years)	Exercisable	Weighted average exercise price		Weighted average remaining life (years)
$   2.80-9.67	235,970	$	7.68	2.15	163,970	$	7.99	1.06
$ 9.68-10.59	1,143,000	$	10.00	4.20	—	$	—	—
$ 10.60-12.56	1,001,000	$	12.35	3.22	326,333	$	12.38	3.19
$ 12.57-15.74	896,055	$	15.17	2.32	592,055	$	15.13	2.22
$ 15.75-23.37	591,000	$	17.37	0.78	520,000	$	17.10	0.41
	3,867,025	$	12.79	2.86	1,602,358	$	14.48	1.71

During the year ended December 31, 2017, the Company recorded $2,863 of compensation expense relating to Share Options in general and administrative expenses (year ended December 31, 2016: $3,120).

b) DSAs and RSAs

The Share Plan permits DSAs and RSAs (collectively referred to as “Share Awards”) to be issued to key management personnel and senior employees. Upon vesting, shares in the Company are issued at no exercise price. Compensation cost for DSAs and RSAs is measured based on the closing price of the stock one day prior to the grant date.

i. DSAs

The DSAs vest based on service-related vesting terms set by the Compensation Committee of the Board of Directors and can therefore vary grant to grant. In general, however, DSAs vest in three equal tranches with the first tranche vesting on the first anniversary, the second on the second anniversary, and the third on the third anniversary of the grant date (the “general DSA vesting terms”).

The number of DSAs outstanding at December 31, 2017 and December 31, 2016 is as follows:

Outstanding at January 1, 2016	350,000
Granted	342,000
Shares issued	(184,000	)
Cancelled/forfeited	(45,000	)
Outstanding at December 31, 2016	463,000
Granted	195,000
Shares issued	(215,000	)
Cancelled/forfeited	(26,000	)
Outstanding at December 31, 2017	417,000

During the year ended December 31, 2017, the Company recorded $2,138 of compensation expense relating to DSAs in general and administrative expenses (year ended December 31, 2016: $2,909).

ii. RSAs

The RSAs vest immediately on the grant date and are issued at that time. Consequently, there are no RSAs outstanding at December 31, 2017 and December 31, 2016.

The Company granted 75,750 RSAs during the year ended December 31, 2017 for total compensation expense of $655 (year ended December 31, 2016: 60,000 RSAs granted for total compensation expense of $787) which was recorded in general and administrative expenses.

c) SARs

The Company grants SARs to employees that entitle the employees to a cash settlement. The amount of the cash settlement is determined based on the difference between the strike price and the closing share price of the Company on the exercise date. The SARs have a term of five years from the award date and vest in five equal tranches with the first tranche vesting immediately, the second on the first anniversary, the third on the second anniversary, the fourth on the third anniversary, and the fifth on the fourth anniversary of the grant date. Prior to the cash settlement, unvested and vested SARs are valued using the Black-Scholes Model.

The number of SARs outstanding and exercisable at December 31, 2017 and December 31, 2016 is as follows:

	Number of SARs
Outstanding at January 1, 2016	43,000
Issued	135,000
Exercised	(23,000	)
Expired/forfeited	(1,000	)
Outstanding at December 31, 2016	154,000
Issued	—
Exercised	(2,000	)
Expired/forfeited	(26,500	)
Outstanding at December 31, 2017	125,500
Exercisable at December 31, 2016	12,000
Exercisable at December 31, 2017	—

As at December 31, 2017, vested SARs had a weighted average intrinsic value of CAD$(9.88) per share (December 31, 2016: CAD$(4.08) per share) and the Company has recognized other current and non-current liabilities for SARs of $32 and $44, respectively (December 31, 2016: $165 and $101, respectively).

During the year ended December 31, 2017, the Company recorded $(174) of compensation expense relating to SARs in general and administrative expenses (year ended December 31, 2016: $408).

The following table summarizes information about SARs outstanding and exercisable at December 31, 2017 (grant price range in CAD):

Grant price range	Issued	Exercised/Cancelled		Outstanding	Exercisable
$6.40-12.87	407,000	(301,500	)	105,500	—
$13.35-16.57	60,000	(60,000	)	—	—
$18.00-23.31	107,500	(84,500	)	20,000	—
	574,500	(446,000	)	125,500	—

d) Input for measurement of fair values

The grant date fair values (CAD) of Share Options and SARs and the re-measurement fair value of SARs are measured based on the Black-Scholes Model and are denominated in CAD.

i. Share Options

There were 1,407,000 Share Options granted during the year ended December 31, 2017 (December 31, 2016: 2,972,876 including 1,621,877 replacement options related to the Lake Shore Gold acquisition).

The weighted average inputs used and grant date fair values (CAD) of Share Options granted during the years ended December 31, 2017 and 2016 are as follows:

	Years Ended December 31,
	2017			2016
Share price	$	9.64		$	13.21
Exercise price	$	9.91		$	9.51
Expected volatility(1)	51		%	51		%
Expected life (years)	3.50			3.00
Expected dividend yield	3.14		%	2.42		%
Risk-free interest rate	1.07		%	0.57		%
Pre-vest forfeiture rate	7.13		%	4.12		%
Fair value	$	2.89		$	5.76

⁽¹⁾  The expected volatility assumption is based on the historical volatility of the Company’s Canadian dollar common shares on the Toronto Stock Exchange.

ii. SARs

There were nil SARs granted during the year ended December 31, 2017 (year ended December 31, 2016: 135,000).

The fair value of SARs (CAD) has been re-measured at December 31, 2017. Expected volatility, interest rate and share price have been updated with changes in the fair value being recognized in earnings or loss during the period.

The weighted average inputs used and grant date fair values (CAD) of SARs granted during the years ended December 31, 2017 and 2016 are as follows:

	Years Ended December 31,
	2017			2016
Share price	$	—		$	12.64
Exercise price	$	—		$	12.38
Expected volatility	—		%	52		%
Expected life (years)	—			5.00
Risk-free interest rate	—		%	0.61		%
Fair value	$	—		$	5.74

The weighted average inputs used and re-measurement date fair values (CAD) of SARs as at December 31, 2017 and 2016 are as follows:

	December 31,			December 31,
	2017			2016
Share price	$	6.03		$	12.65
Exercise price	$	14.12		$	14.05
Expected volatility	55		%	50		%
Expected life (years)	2.92			3.80
Risk-free interest rate	1.81		%	1.02		%
Fair value	$	0.99		$	4.60

e) Authorized share capital

The Company’s authorized share structure is as follows:

• Unlimited number of authorized common shares without par value;

• Common shares are without special rights or restrictions attached;

• Common shares have voting rights; and

• Common shareholders are entitled to receive dividend payments.

• Common shareholders are entitled to elect to reinvest their dividend payments through the Company’s dividend reinvestment program.

At December 31, 2017, there were 312,775,761 common shares of the Company issued and outstanding (December 31, 2016: 311,362,031).

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INCOME TAX EXPENSE

12 Months Ended

Dec. 31, 2017

Income Taxes [Abstract]

INCOME TAX EXPENSE

INCOME TAX EXPENSE

				Years Ended December 31,
	2017			2016
Current income tax expense
Current period	$	42,455		$	69,832
Prior period	(55		)	822
	42,400			70,654
Deferred tax expense (benefit)
Origination and reversal of temporary differences	(4,366		)	20,202
Income tax expense	$	38,034		$	90,856

a) Income tax reconciliation

The reconciliation of income taxes at statutory rates with the reported taxes is as follows:

	Years Ended December 31,
	2017			2016
Earnings (loss) before income taxes	$	119,828		$	208,732
Statutory tax rate	26.00		%	26.00		%
Income tax expense (benefit)	31,155			54,270
Reconciling items:
Difference between statutory and foreign tax rates	2,978			9,127
Non-deductible share-based payments	1,843			2,741
Impact of foreign exchange on deferred income tax assets and liabilities	(4,589		)	(3,080		)
Non-deductible expenses	6,312			22,363
Change in unrecognized deferred tax assets	(219		)	(2,758		)
Other	554			8,193
Income tax expense (benefit)	$	38,034		$	90,856

Effective October 23, 2017, the British Columbia provincial tax rate increased from 11% to 12%, effective January 1, 2018. The overall increase in tax rates in 2018 will result in an increase in the Company's statutory tax rate from 26% to 27% in 2018 and o

b) Deferred tax assets and liabilities

At December 31, 2017 and 2016, the Company’s significant components of deferred income tax assets and deferred tax liabilities were as follows:

	December 31, 2017			December 31, 2016
Deferred income tax assets
Unused non-capital losses	$	38,140		$	39,704
Inventories and receivables	369			1,994
Reclamation and closure cost obligations	12,917			13,019
Other	8,438			22,648
	$	59,864		$	77,365
Deferred income tax liabilities
Mining interests	(286,214		)	(310,028		)
Inventories and receivables	(3,465		)	(1,518		)
	(289,679		)	(311,546		)
Net deferred income tax liabilities	$	(229,815	)	$	(234,181	)

The Company believes that it is probable that the results of future operations will generate sufficient revenue to realize the deferred income tax assets.

The Company’s deferred tax liability of $230,184 at December 31, 2017 is primarily the result of the acquisition of Lake Shore Gold during 2016 and the acquisition of Rio Alto during 2015 (December 31, 2016: $236,175). At December 31, 2017 and 2016, $369 and $1,994 of deferred tax assets relating to inventories and receivables are not netted against the deferred tax liability.

	December 31, 2017		December 31, 2016
Net deferred income tax liabilities	$	229,815	$	234,181
Deferred tax assets related to inventories and receivables	369		1,994
Deferred income tax liabilities	$	230,184	$	236,175

c) Tax losses and tax credits

As at December 31, 2017, the Company had $271,928 of tax losses (December 31, 2016: $270,730) for which $142,175 (December 31, 2016: $147,891) have been recognized as deferred tax assets. The Company recognizes the benefit of tax losses only to the extent of anticipated future taxable income in relevant jurisdictions. The gross amount of tax losses carried forward will begin to expire in 2018.

Deductible temporary differences for which no deferred tax assets have been recognized at December 31, 2017 and 2016 are as follows:

	December 31, 2017		December 31, 2016
Tax losses and tax credits	$	147,427	$	140,695
Deductible temporary differences
Cumulative eligible capital	568		611
Financing costs	803		1,937
Unrealized capital losses	—		325
Reclamation and closure cost obligations	23,585		26,409
Deductible temporary difference	$	172,383	$	169,977

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EARNINGS (LOSS) PER SHARE

12 Months Ended

Dec. 31, 2017

Earnings per share [abstract]

EARNINGS (LOSS) PER SHARE

EARNING (LOSS) PER SHARE

	Year Ended December 31, 2017					Year Ended December 31, 2016
	Earnings		Weighted average shares outstanding	Earnings per share		Loss		Weighted average shares outstanding	Loss per share
Basic EPS(1)	$	81,793	312,804,323	$	0.26	$	117,876	289,726,501	$	0.41
Dilutive
securities:
Share options	—		29,177	—		—		261,545	—
Diluted EPS	$	81,793	312,833,500	$	0.26	$	117,876	289,988,046	$	0.41

⁽¹⁾  The weighted average shares outstanding used in the basic earnings per share calculation includes the dilutive impact of 417,000 DSAs (year ended December 31, 2016: 463,000 DSAs).

At December 31, 2017, 3,867,025 Shares Options and 417,000 DSAs were outstanding of which 3,653,081 and nil, respectively for the year ended December 31, 2017 were anti-dilutive (year ended December 31, 2016: 3,211,745 Share Options and 463,000 DSAs outstanding, of which 1,638,828 and nil, respectively were anti-dilutive) because the underlying exercise prices exceeded the average market price for the year ended December 31, 2017 of CAD$9.00 (year ended December 31, 2016: CAD$15.46).

During the year ended December 31, 2017, the Company declared and paid to its shareholders dividends of $0.02 per common share per month up to August 8, 2017, for total dividends of $43,686 (year ended December 31, 2016: $69,402), including $7,989 (2016: $2,358) which were paid as share-based dividends.

As a result of shareholder enrollment in the Dividend Reinvestment Plan during the year ended December 31, 2017, $7,989 was reinvested for a total issuance of 1,010,844 common shares of the Company.

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SUPPLEMENTAL CASH FLOW INFORMATION

12 Months Ended

Dec. 31, 2017

Cash Flow Statement [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

SUPPLEMENTAL CASH FLOW INFORMATION

				Years Ended December 31,
	2017			2016
Trade and other receivables	$	33,302		$	(16,482	)
Inventories	5,722			(38,024		)
Other current assets	(535		)	1,474
Other non-current assets	(11,541		)	2,619
Accounts payable and accrued liabilities, and other non-current liabilities	(18,705		)	(17,143		)
Changes in working capital	$	8,243		$	(67,556	)

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SEGMENTED INFORMATION

12 Months Ended

Dec. 31, 2017

Operating Segments [Abstract]

SEGMENTED INFORMATION

SEGMENTED INFORMATION

All of the Company’s operations are within the mining sector. The Company produces silver, gold, lead and zinc from mines located in Guatemala, Peru and Canada. Due to the geographic and political diversity of the countries in which the Company operates, each operating segment is responsible for achieving specified business results within a framework of global corporate policies and standards. Regional management in each country provides support to the operating segments, including but not limited to financial, human resources, and exploration assistance. Each operating segment has a budgeting process which it uses to measure the results of operation and exploration activities.

The operating, exploration and financial results of individual operating segments are reviewed by the Company’s executive management. As a group, the executive management of the Company is considered to be the chief operating decision maker (“CODM”) in order to make decisions about the allocation of resources and to assess their performance. The CODM determined that for review, an operating segment must be one whose principal business activities are the operation of mineral properties for the mining of precious metals and the exploration, development and acquisition of mineral interests.

Revenues generated from the sale of silver in concentrate are from the Company’s Escobal mine in Guatemala. Revenues generated from the sale of gold in doré are generated at the La Arena and Shahuindo mines in Peru and the Timmins mines in Canada. Mineral interests, plant and equipment are situated in Guatemala, Peru and Canada.

Significant information relating to the Company’s operating segments as at and for the year ended December 31, 2017 is summarized as follows:

			December 31, 2017(1)
	Escobal(2)		La Arena		Shahuindo			Timmins  mines			Total
Mineral interests and plantand equipment	$	776,364	$	433,178	$	527,826		$	879,421		$	2,616,789
Goodwill	—		57,468		—			54,617			$	112,085
Total assets	906,434		573,566		621,985			978,653			$	3,080,638
Total liabilities(3)	$	81,208	$	160,979	$	(539,512	)	$	(158,425	)	$	(455,750	)

			Year Ended December 31, 2017
	Escobal		La Arena		Shahuindo		Timmins mines		Total
Revenues	$	192,510	$	233,782	$	95,425	$	211,840	$	733,557
Production costs	61,934		126,376		53,861		105,975		$	348,146
Royalties	10,521		—		—		5,049		$	15,570
Care and Maintenance(4)	24,855		—		—		—		$	24,855
Depreciation anddepletion(5)	32,858		48,092		11,452		60,614		$	153,016
Mine operating earnings	62,342		59,314		30,112		40,202		191,970
Capital expenditures	$	22,901	$	32,019	$	69,352	$	98,775	$	223,047

⁽¹⁾  Balances presented are before intercompany transaction eliminations not included in segmented disclosure.

⁽²⁾  Escobal segment includes corporate and other

⁽³⁾  Includes intercompany payables and receivables to reconcile to the total liabilities on the statement of financial position

⁽⁴⁾  Due to the suspension of mining operations following the suspension of the Escobal mining license in the beginning of the third quarter care and maintenance costs, which comprise the cost of maintaining the Escobal mine and include environmental costs, salaries and legal fees have been incurred.

⁽⁵⁾  The depreciation and depletion expense for La Arena and Shahuindo mines includes a true-up of $11.3 million related to prior years.

Significant information relating to the Company’s reportable operating segments as at and for the year ended December 31, 2016 is summarized as follows:

				December 31, 2016(1)(2)(3)
	Escobal			La Arena		Shahuindo		Timmins mines		Total
Mineral interests and plant and equipment	$	785,888		$	451,551	$	482,685	$	836,829	$	2,556,953
Goodwill	—			57,468		—		54,617		$	112,085
Total assets(4)	963,824			611,344		547,153		948,932		$	3,071,253
Total liabilities(4)(5)	$	(27,225	)	$	71,490	$	319,432	$	135,402	$	499,099

			Year Ended December 31, 2016(1)(2)(3)
	Escobal		La Arena		Shahuindo		Timmins mines		Total
Revenues	$	355,812	$	244,397	$	47,174	$	137,120	$	784,503
Production costs	128,552		115,229		25,118		63,822		$	332,721
Royalties	18,741		—		—		4,172		$	22,913
Depreciation and depletion	53,204		27,779		10,016		33,745		$	124,744
Mine operating earnings	155,315		101,389		12,040		35,381		$	304,125
Capital expenditures(3)	$	30,077	$	35,366	$	63,893	$	81,772	$	211,108

⁽¹⁾  The Timmins mines were acquired on April 1, 2016 as part of the Lake Shore Gold acquisition. Results of operations are not included prior to April 1, 2016.

⁽²⁾  Shahuindo declared commercial production effective May 1, 2016. All pre-operating revenues from production at Shahuindo have been credited against construction capital through April 30, 2016.

⁽³⁾  Capital expenditures in the Timmins mines segment includes the acquisition of the 2% net smelter return (“NSR”) royalty related to production at the Bell Creek mine for $13,676.

⁽⁴⁾  Balances presented are before intercompany transaction eliminations not included in segmented disclosure.

⁽⁵⁾  Includes intercompany payables and receivables to reconcile to the total liabilities on the statement of financial position

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FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2017

Fair Value Measurement [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, trade and other receivables, other financial assets, accounts payable and accrued liabilities, debt and lease obligations, and are categorized as follows:

• Cash and cash equivalents, restricted cash, trade and other receivables, and other financial assets are classified as loans and receivables and are measured at amortized cost;

• Trade and other receivables, which are subject to provisional pricing adjustments, investments and currency swaps are measured at FVTPL; and

• Accounts payable and accrued liabilities, debt and lease obligations are classified as other financial liabilities.

Fair value (“FV”) estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The analysis of financial instruments that are measured subsequent to initial recognition at fair value can be categorized into Levels 1 through 3 based upon the degree to which the inputs used in the fair value measurement are observable.

Level 1 – inputs to the valuation methodology are quoted (adjusted) for identical assets or liabilities in active markets.

Level 2 – inputs to valuation methodology include quoted market prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

At December 31, 2017 and 2016, the levels in the FV hierarchy into which the Company’s financial assets and liabilities are measured and recognized on the statement of financial position at fair value are categorized as follows:

	December 31, 2017						December 31, 2016
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Investments(1)	$	320	$	—	$	—	$	39	$	—	$	—
Provisionally priced trade receivables	—		—				—		18,997
Total	$	320	$	—	$	—	$	39	$	18,997	$	—

⁽¹⁾  Investments are included in other current assets.

The carrying value of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, debt and lease obligations approximate their fair value given the short term to maturity.

There were no transfers between Level 1 and Level 2 during the year ended December 31, 2017.

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FINANCIAL RISK MANAGEMENT

12 Months Ended

Dec. 31, 2017

Financial Instruments [Abstract]

FINANCIAL RISK MANAGEMENT

FINANCIAL RISK MANAGEMENT

The Company has exposure to certain risks resulting from its use of financial instruments. These risks include credit risk, liquidity risk and market risk.

a) Credit Risk

Credit risk is the risk that the counterparty to a financial instrument will cause a loss for the Company by failing to meet its obligations. Credit risk for the Company is primarily related to trade and other receivables, sales tax receivable and cash and cash equivalents.

The Company manages the credit risk associated with trade and other receivables by selling to organizations with strong credit ratings and/or by requiring substantial provisional pricing at the date of shipping its products. The history of defaults by these organizations to other entities has been negligible and the Company considers its risk in trade receivables to be negligible as well.

Receivables other than trade receivables are primarily sales tax receivables from the governments of Guatemala, Peru and Canada. The Company has a history of consistent collection of the sale tax receivable and therefore considers its risk to be negligible.

The Company manages the credit risk associated with cash and cash equivalents by investing these funds with highly rated financial institutions, and as such, the Company deems the credit risk on cash and cash equivalents to be low.

b) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, to the extent possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. To further mitigate this risk, the Company has the Revolving Facility in place in the amount of $300 million (note 12c).

The Company’s significant undiscounted commitments at December 31, 2017 are as follows:

							December 31, 2017		December 31, 2016
	1 year		2-5 years		5+ years		Total		Total
Accounts payable and accrued liabilities	$	110,084	$	—	$	—	$	110,084	$	129,170
Debt	35,000		—		—		35,000		35,000
Income tax payable	2,277		—		—		2,277		10,733
Lease and contractual agreements	23,087		3,261		210		26,558		15,946
Commitments(1)	70,513		418		—		70,931		123,481
Other non-current liabilities	2,780		2,779		—		5,559		24,917
Reclamation provision	717		19,261		73,360		93,338		99,273
	$	244,458	$	25,719	$	73,570	$	343,747	$	438,520

⁽¹⁾  Commitments to purchase equipment, services, materials and supplies.

During the year ended December 31, 2017, the Company generated cash flows from operating activities, one of the Company’s main sources of liquidity, of $243,053 (year ended December 31, 2016: $249,454). The Company held cash and cash equivalents of $125,665 and had working capital of $143.245 (December 31, 2016: $163,368 and $209,006 in cash and cash equivalents and working capital, respectively). The Company defines working capital as current assets less current liabilities.

The Company determined that the working capital, combined with future cash flows from operations and the available Revolving Facility are sufficient to support the Company’s commitments and deems liquidity risk to be minimal.

c) Market Risk

The market risk of the Company is composed of three main risks: foreign exchange risk, interest rate risk, and price risk.

i. Foreign Exchange Risk

The Company is exposed to foreign exchange or currency risk on balances that are denominated in a currency other than the USD. These include cash and cash equivalents, sales tax receivable, accounts payable and accrued liabilities and taxes payable.

To minimize currency risk, substantially all of the Company’s cash is denominated in USD and is kept in highly liquid instruments such as commercial paper and time deposits.

Cash and cash equivalents held in foreign currencies, denominated in USD, are as follows:

	December 31, 2017		December 31, 2016
Guatemalan quetzal	$	1,011	$	564
Peruvian sol	4,232		3,579
Canadian dollar	1,971		20,386
Other	—		82
	$	7,214	$	24,611

Exchange rate fluctuations may also affect the costs that the Company incurs in its operations. The Company’s goods and services are contracted in USD, CAD, Guatemalan quetzals and Peruvian soles. The appreciation of these currencies against the USD can increase the production costs the Company incurs while the depreciation of these currencies against the USD can decrease the production costs the Company incurs.

In addition, the Company is exposed to currency risk through non-monetary assets and liabilities of subsidiaries whose taxable profit or tax loss are denominated in foreign currencies. Changes in exchange rates give rise to temporary differences resulting in a deferred tax liability or asset with the resulting deferred tax charged or credited to income tax expense. At December 31, 2017, the Company had $230,184 of deferred income tax liabilities, which arose primarily from the acquisitions of Rio Alto in 2015 and Lake Shore Gold in 2016. Based on the Company’s foreign exchange exposure on deferred tax liabilities at December 31, 2017, a 10% appreciation or depreciation in foreign exchange rates against the USD would have resulted in anapproximate $16,395 non-cash increase or decrease in the Company’s earnings.

The Company recognized a foreign exchange loss of $2,441 for the year ended December 31, 2017 (year ended December 31, 2016: $435). Based on the Company’s net exposure at December 31, 2017, a 10% appreciation or depreciation in foreign exchange rates against the USD would have resulted in an approximate $6,728 increase or decrease in the Company’s earnings.

At December 31, 2017, the Company has determined the exposure to currency risk to be at an acceptable level.

ii. Interest Rate Risk

Interest rate risk is the risk that the Company’s future cash flows and fair values will fluctuate as a result of changes in market interest rates. At December 31, 2017, the Company’s interest- bearing financial instruments are related to cash equivalents, the Facility, the Revolving Facility and finance leases. The weighted average interest rate paid by the Company during the year ended December 31, 2017 related to debt facilities was 3.50% (year ended December 31, 2016: 2.95%). No amounts were drawn on the Revolving Facility and therefore only standby fees were applicable for the year ended December 31, 2017 (note 12c).

At December 31, 2017, the Company has determined the interest rate risk to be low and that a 10% increase or decrease in market interest rates would result in a nominal increase or decrease to the Company’s earnings.

iii. Price Risk

Price risk is the risk that the fair value of the Company’s financial instruments will fluctuate due to changes in market prices.

The Company has determined that price risk due to fluctuations in metals prices is at an acceptable level and has not entered into any hedging contracts.

The costs associated with production, development, construction and exploration activities of the Company are also subject to price risk as it relates to certain consumables including diesel fuel and power. The Company deems its exposure to price risk related to fuel prices to be at an acceptable level has not entered into any hedging contracts.

At December 31, 2017, the Company has determined exposure to price risk to be at an acceptable level.

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CAPITAL MANAGEMENT

12 Months Ended

Dec. 31, 2017

Corporate Information And Statement Of IFRS Compliance [Abstract]

CAPITAL MANAGEMENT

CAPITAL MANAGEMENT

The Company’s strategy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to support future development of the business. The Company seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.

The capital structure of the Company consists of common equity, comprising share capital and reserves net of accumulated deficit, and debt, which includes the Facility and finance leases.

	Notes	December 31, 2017			December 31, 2016
Shareholders’ equity		$	2,624,888		$	2,572,154
Debt	12	35,000			35,000
Lease obligations	13	7,754			15,946
		2,667,642			2,623,100
Cash and cash equivalents	7	(125,665		)	(163,368		)
Restricted cash		(5,124		)	(4,672		)
		$	2,536,853		$	2,455,060

The Company’s overall capital management strategy remains unchanged from the year ended December 31, 2016.

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CONTINGENCIES

12 Months Ended

Dec. 31, 2017

Other Provisions, Contingent Liabilities And Contingent Assets [Abstract]

CONTINGENCIES

CONTINGENCIES

Due to the complexity and nature of the Company’s operations, various legal, tax, and regulatory matters are outstanding from time to time. In the event that management’s estimate of the future resolution of these matters changes, the Company will recognize the effects of the changes in its consolidated financial statements on the date such changes occur.

On July 7, 2017, the Company learned that three purported class action lawsuits were filed against Tahoe, and certain of its current and former officers and directors under Section 10(b) and Section 20(a) of the US Securities Exchange Act of 1934, as amended (the "US Exchange Act"), and Rule 10b-5, thereunder.  The lawsuits were filed in three different federal courts and all generally allege that the Company made untrue statements of material facts or omitted to state material facts or engaged in acts that operated as a fraud upon the purchasers of the Company's stock. The lawsuits were filed following the issuance of the provisional decision by the Guatemalan Supreme Court to suspend the mining license at Escobal. The suits allege compensatory damages, interest, fees and costs. The Company expects the cases to be transferred to one court so that they can be consolidated and a lead plaintiff can be appointed to represent the purported class members. The Company is disputing the allegations raised and will vigorously defend the lawsuits, the outcome of which is not determinable at this time.

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RELATED PARTIES

12 Months Ended

Dec. 31, 2017

Related Party [Abstract]

RELATED PARTIES

RELATED PARTIES

a) Related party transactions

During the year ended December 31, 2017, the Company’s related parties included its subsidiaries, key management personnel and Directors.

b) Key management personnel compensation

Key management includes those personnel having the authority and responsibility for planning, directing, and controlling the Company. In addition to their salaries, key management personnel, including the Board of Directors, Officers and senior management, receive bonuses and also participate in the Company’s Share Plan (note 18).

Key management personnel compensation included in corporate and general administrative expenses is as follows:

	Years Ended
	December 31,
	2017		2016
Short-term employee benefits(1)	$	8,804	$	8,870
Share-based payments	5,163		5,948
	$	13,967	$	14,818

⁽¹⁾  Short-term employee benefits include salaries, bonuses and other annual employee benefits paid during the year.

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2017

Disclosure of non-adjusting events after reporting period [abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

On February 20, 2018, the Company announced the closing of its revised revolving credit facility with its bank syndicate. The Company now has access to a $175 million revolving credit facility which includes a $25 million accordion feature, for total access of $200 million in capital. The revised facility matures on July 19, 2021. This facility is structured on the strength of Tahoe’s gold business alone, and access to the facility does not rely on the operation of Escobal.   Scotiabank and HSBC are the co-leads for the facility, with Scotiabank acting as the administrative agent. The facility bears interest on a sliding scale of LIBOR plus between 2.25% to 3.25% or a base rate plus 1.25% to 2.25%, which is determined based upon the Company's consolidated net leverage ratio. Standby fees for the undrawn portion of the facility are also on a similar sliding scale basis of between 0.5063% and 0.7313%.   

On February 20, 2018 the $35.0 million credit facility was repaid using cash from operations as a condition of closing the Second Amended and Restated Credit Facility.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2017

Corporate Information And Statement Of IFRS Compliance [Abstract]

Basis of measurement

Basis of measurement

The consolidated financial statements have been prepared on an historical cost basis, except for certain financial instruments, which are measured at fair value through profit or loss (“FVTPL”), as explained in the accounting policies set out below. Additionally, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

Currency of presentation

Currency of presentation

The consolidated financial statements are presented in United States dollars (“USD”), which is the functional and presentation currency of the Company and all of its subsidiaries. Certain values are presented in Canadian dollars and described as CAD.

Basis of consolidation

Basis of consolidation

The accounts of the subsidiaries controlled by the Company are included in the consolidated financial statements from the date that control commenced until the date that control ceases. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. The Company is presumed to have significant influence if it holds, directly or indirectly, 20% or more of the voting power of the investee. If the Company holds less than 20% of the voting power, other relevant factors are examined by the Company to determine whether it has significant influence.

The factors that may enable the exercise of significant influence include but are not limited to: the proportion of seats on the board of directors being assigned to the Company; the nature of the business decisions that require unanimous consent of the directors; the ability to influence the operating, strategic and financing decisions; and the existing ownership composition regarding the Company’s ability to exercise significant influence.

The principal subsidiaries (operating mine sites and projects) of the Company and their geographic locations at December 31, 2017 were as follows:

Direct Parent Company	Location	Ownership Percentage	Mining Properties and Development Projects Owned
Minera San Rafael, S.A.	Guatemala	100%	El Escobal mine
La Arena S.A.	Peru	100%	La Arena mine
			La Arena II Project
Shahuindo S.A.C.	Peru	100%	Shahuindo mine
Lake Shore Gold Corp.	Canada	100%	Bell Creek mine,
		100%	Timmins West mine,
		100%	Fenn-Gib Project
Temex Resources Corp.	Canada	100%	Juby Project
		79%	Whitney Project

During the year ended December 31, 2016, the Company divested of its ownership interest in Northern Superior Resources which was acquired on April 1, 2016 as part of the Lake Shore Gold acquisition and previously accounted for using the equity method. A gain of $1,059 was recognized in the consolidated statements of operations and total comprehensive income for the year ended December 31, 2016.

Intercompany assets, liabilities, equity, income, expenses and cash flows arising from intercompany transactions are eliminated in full on consolidation.

Foreign currency translation

Foreign currency translation

Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in foreign currencies are not re-translated. Total foreign exchange gains and losses are recognized in earnings. The unrealized portion of foreign exchange gains and losses are disclosed separately in the consolidated statements of cash flows.

Business combinations

Business Combinations

A business combination is defined as an acquisition of assets and liabilities that constitute a business. A business is an integrated set of activities and assets that consist of inputs, including non- current assets, and processes, including operational processes that, when applied to those inputs, have the ability to create outputs that provide a return to the Company and its shareholders. A business also includes those assets and liabilities that do not necessarily have all the inputs and processes required to produce outputs, but can be integrated with the inputs and processes of the Company to create outputs. When acquiring a set of activities or assets in the exploration and development stage, which may not have outputs, the Company considers other factors to determine whether the set of activities or assets is a business.

Business combinations are accounted for using the acquisition method whereby identifiable assets acquired and liabilities assumed, including contingent liabilities, are recorded at their fair values at acquisition date. The acquisition date is the date at which the Company obtains control over the acquiree, which is generally the date that consideration is transferred and the Company acquires the assets and assumes the liabilities of the acquiree. The Company considers all relevant facts and circumstances in determining the acquisition date.

The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the fair values of the assets at the acquisition date transferred by the Company, the liabilities, including contingent consideration, incurred and payable by the Company to former owners of the acquiree and the equity interests issued by the Company. The measurement date for equity interests issued by the Company is the acquisition date. Acquisition-related costs are expensed as incurred.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports in its consolidated financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, the Company will retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. During the measurement period, the Company will also recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period ends as soon as the Company receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable and shall not exceed one year from the acquisition date.

Non-controlling interests (“NCI”) are the equity in a subsidiary not attributable, directly or indirectly, to a parent. NCI are recorded at their proportionate share of the fair value of identifiable net assets acquired on initial recognition. Goodwill is recognized as the sum of the total consideration (acquisition date fair value) transferred by the Company, including contingent consideration and the NCI in the acquiree, less the fair value of net assets acquired.

Goodwill

Goodwill typically arises on the Company’s acquisitions due to: i) the ability of the Company to capture certain synergies through management of the acquired operation within the Company; and ii) the requirement to record a deferred tax liability for the difference between the assigned fair values and the tax bases of assets acquired and liabilities assumed.

Goodwill is not amortized. The Company performs an impairment test for goodwill annually and when events or changes in circumstances indicate that the related carrying amount may not be recoverable. If the carrying amount of a mine site or project, which is the cash-generating unit, to which goodwill has been allocated exceeds the recoverable amount, an impairment loss is recognized for the amount in excess. The impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the mine site to nil and then to the other assets of the mine site based on the relative carrying amounts of those assets. Impairment losses recognized for goodwill are not reversed in subsequent periods.

Upon disposal or abandonment of a mine site or project to which goodwill has been attributed, the carrying amount of goodwill allocated to that mine site is derecognized and included in the calculation of the gain or loss on disposal or abandonment.

Cash and cash equivalents

Cash and cash equivalents and restricted cash

Cash and cash equivalents comprise cash balances and deposits with maturities of 90 days or less. Restricted cash comprises cash balances which are restricted from being immediately exchanged or used to settle a transaction and can be classified as either a current or non-current asset depending on the terms of the restriction(s).

Restricted cash

Cash and cash equivalents and restricted cash

Cash and cash equivalents comprise cash balances and deposits with maturities of 90 days or less. Restricted cash comprises cash balances which are restricted from being immediately exchanged or used to settle a transaction and can be classified as either a current or non-current asset depending on the terms of the restriction(s).

Inventories

Inventories

Finished goods, work-in-process, heap leach ore and stockpiled ore are measured at the lower of average cost or net realizable value. Net realizable value ("NRV") is calculated as the estimated price at the time of sale based on prevailing metal prices less estimated future costs to convert the inventories into saleable form and estimated costs to sell.

Ore extracted from the mine may be stockpiled and subsequently processed into finished goods (gold and by-products in doré or silver and by-products in concentrate form). The costs of finished goods represent the costs of work-in process inventories incurred prior to the sale of doré or concentrate. Costs are included in inventory based on current costs incurred to produce doré and concentrate, including applicable depreciation and depletion of mining interests, and removed at the cost per ounce of doré produced (gold) or cost per tonne of concentrate produced (silver and by-products).

The recovery of gold and by-products from certain oxide ore is achieved through a heap leaching process at the La Arena and Shahuindo mines. Costs are included in heap leach ore inventory based on current mining and leaching costs, including applicable depreciation and depletion of mining interests, and removed from heap leach ore inventory as ounces of gold are recovered at the average cost per recoverable ounce of gold on the leach pads. Estimates of recoverable gold on the leach pads are calculated based on the quantities of ore placed on the leach pads (measured tonnes added to the leach pads), the estimated grade of ore placed on the leach pads, and an estimated recovery percentage.

Supplies are measured at average cost. In the event that the net realizable value of the finished product is lower than the expected cost of the finished product, the supplies used in the finished product are written down to net realizable value. Replacement costs of supplies are generally used as the best estimate of net realizable value.

Mineral interests, plant and equipment

Mineral interests, plant and equipment

Mineral interests, plant and equipment are carried at cost, less accumulated depreciation and accumulated impairment losses.

On initial acquisition, mineral interests, plant and equipment are valued at cost, being the purchase price and the directly attributable costs of acquisition or construction required to bring the asset to the location and condition necessary for the asset to be capable of operating in the manner intended by management. Land is stated at cost less any impairment in value and is not depreciated, and is included in non-depletable mineral interests. When provisions for closure and decommissioning are recognized, the corresponding cost is capitalized as part of the cost of the related assets, representing part of the cost of acquiring the future economic benefits of the operation. The capitalized cost of closure and decommissioning activities is recognized in mineral interests, plant and equipment and depreciated accordingly.

Each asset or component’s estimated useful life has due regard to both its own physical life limitations and the present assessment of economic viability of the mineral interests benefitting from its use, and to possible future variations in those assessments. Estimates of remaining useful lives and residual values are reviewed on a periodic basis. Changes in estimates are accounted for prospectively.

Borrowing costs directly relating to the financing of a qualifying project are added to the capitalized cost of those projects until such time as the assets are substantially ready for their intended use or sale which, in the case of mineral interests, is when commercial production is achieved.

Expenditure on major maintenance or repairs includes the cost of the replacement of parts of assets and overhaul costs. Where an asset or part of an asset is replaced and it is probable that future economic benefits associated with the item will be available to the Company, the expenditure is capitalized and the carrying amount of the item replaced derecognized. Similarly, overhaul costs associated with major maintenance are capitalized and depreciated over their useful lives where it is probable that future economic benefits will be available and any remaining carrying amounts of the cost of previous overhauls are derecognized. All other costs are expensed as incurred.

Operational mineral interests and mine development

When it has been determined that a mineral interest can be economically developed, the costs incurred to develop such interest are capitalized.

Major development expenditures on producing mineral interests incurred to increase production or extend the life of the mine are capitalized while ongoing mining expenditures on producing mineral interests are charged against earnings as incurred.

Costs associated with commissioning activities are capitalized until the date the Company is ready to commence commercial production.

A mine is ready to commence commercial production when it is capable of operating at levels intended by management. The main criteria management uses to assess operating levels are:

• Operational commissioning of major mine and plant components is complete;

• Operating results are being achieved consistently for a period of time;

• Indicators that these operating results will continue; and

• Other factors which can include:

◦ Significant milestones for the development of the mineral interests have been achieved;

◦ A significant portion of plant/mill/pad capacity has been achieved;

◦ A significant portion of available funding is directed towards operating activities rather than capital projects; or

◦ A pre-determined, reasonable period of time has passed.

Management may use additional criteria to determine mine-specific operating levels for commercial production.

Any revenues earned during this period are recorded as a reduction in construction capital. These costs are amortized using the units-of-production method (“UOP”) over the life of the mine, commencing on the date of commercial production.

Costs related to the acquisition of land and mineral rights are capitalized as incurred.

Assets under construction are capitalized as construction-in-progress. The cost of construction-in-progress comprises its purchase price and any costs directly attributable to bringing it into working condition for its intended use. Construction-in-progress is not depreciated. Once the asset is complete and available for use it is transferred to mineral interests, plant and equipment and depreciation commences.

Deferred Stripping

In open pit mining operations, it is necessary to remove mine waste materials or overburden to gain access to mineral ore deposits. Stripping costs incurred during the development phase of the mine (prior to commercial production) are capitalized and deferred as part of the cost of building, developing and constructing the mine (included in mineral interests) if the costs relate to anticipated future benefits and meet the definition of an asset. Once commercial production begins, the capitalized stripping costs are amortized using the units of production (“UOP”) method over the estimated life of the component to which they pertain.

During the production phase, to the extent the benefit from the stripping activity is realized in the form of inventory produced, the stripping costs are considered variable production costs and are included in the costs of the inventory during the period in which they are incurred. If the benefit from the stripping activity during the production phase provides access to deeper levels of material that will be mined in future periods, the stripping costs, including directly attributable overhead costs, are capitalized as part of mineral interests and amortized using the UOP method over the estimated life of the component to which they pertain. Stripping costs during the production phase are recognized as an asset if all the following criteria are met:

• It is possible that the future benefit, i.e. improved access to the ore body, associated with the stripping activity will flow to the entity;

• The Company can identify the component of the ore body for which access has been improved; and

• The stripping activity costs associated with the component can be measured reliably.

Stripping activity occurs on separately identifiable components of the open pit and the amount capitalized is calculated by multiplying the tonnes removed for stripping purposes from each identifiable component during the period by the mining cost per tonne. If the stripping costs cannot be attributed to a separately identifiable component, they are allocated to inventory and mineral interests based on the actual waste-to-ore ratio (“strip ratio”) of material extracted compared to the estimated strip ratio.

Depreciation of mineral interests, plant and equipment

The carrying amounts of mineral interests, plant and equipment are depreciated to their estimated residual value over the estimated useful lives of the specific assets concerned, or the estimated life of the associated mine, if shorter. Estimates of residual values and useful lives are reviewed on a periodic basis and any change in estimate is taken into account in the determination of remaining depreciation charges, and adjusted if appropriate, at each reporting period. Changes to the estimated residual values or useful lives are accounted for prospectively. Depreciation commences on the date when the asset is available for use as intended by management.

Units of production basis (“UOP”)

For mineral interests and certain mining equipment, the economic benefits from the asset are consumed in a pattern which is linked to the production level. Except as noted below, such assets are depreciated on a UOP basis. In applying the UOP method, depreciation is normally calculated using the quantity of material extracted from the mine in the period as a percentage of the total quantity of material to be extracted in current and future periods based on life-of-mine reserves and, if appropriate, a portion of the resources where it is considered highly probable that those mineral resources will be economically extracted.

Upon declaration of commercial production, the carrying amounts of mineral interests are depleted using the UOP over the estimated life of mine based on proven and probable mineral reserves and, if appropriate, the portion of mineral resources where it is considered highly probable that those mineral resources will be economically extracted. Economic extraction is considered highly probable for those mineral resources where sufficient drill data exists, geologic interpretation has been undertaken and management has included the mineral resources in the life of mine plan. The life of mine plan represents management’s best estimate of the future economic benefits expected to be obtained from the mineral properties and therefore the production levels contained in these plans may include mineral resources in each of the measured, indicated and/or inferred mineral resources category. The percentage of measured, indicated and/or inferred mineral resources to be included in the estimated recoverable ounces of a mining property and depleted using the unit-of-production method is determined on a site by site basis using the most current life of mine plan for each site and includes considerations of the following factors:

• The Company’s history of converting mineral resources to mineral reserves at its operations has ranged from 40% to 80%; the Company recognizes past performance may not be indicative of future mineral resource to mineral reserve conversion rates;

• The type of deposit(s) at each mine site; and

• The geological characteristics of the ore body and its impact to the costs related to the access of the resources.

At sites where there is a lower confidence of mineral resources or where production calculated in the life of mine models does not exceed the mineral reserves, no mineral resources are included in the estimated recoverable ounces for those sites.

If commercial production commences prior to the determination of proven and probable mineral reserves, depletion is calculated based on the mineable portion of the resource as defined in the life of mine plan.

For the years ended December 31, 2017 and 2016, all of the Company’s operating mines were depleted using the UOP method over the estimated life of mine based on proven and probable reserves and the portion of resources expected to be converted to mineral reserves (depletion at Shahuindo began May 1, 2016, the commencement of commercial production).

Straight line basis

For all other assets depreciation is recognized in earnings or loss on a straight line basis over the estimated useful lives of each part of an item (component), since this most closely reflects the expected pattern of consumption of economic benefits embodied in the asset. The estimated useful lives for assets and components that are depreciated on a straight line basis range from 2 to 20 years.

Depreciated Items	Useful Life
Computer equipment and software	2 - 5 years
Vehicles	3 - 5 years
Mining equipment	2 - 14 years
Ancillary facilities(1)	20 Years
Mineral interests and plant	UOP

⁽¹⁾  The lessor of 20 years or life of mine (“LOM”).

Impairment and Disposal

At the end of each reporting period the Company reviews whether there is any indication that the assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of the asset’s fair value less costs to sell and its value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in earnings or loss for the period. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit (“CGU”) to which the asset belongs.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in earnings or loss.

Where an item of mineral interests, plant and equipment is disposed of, it is derecognized and the difference between its carrying value and net sales proceeds is disclosed as earnings or loss on disposal in the consolidated statements of operations and total comprehensive income (loss). Any items of mineral interests, plant or equipment that cease to have future economic benefits are derecognized with any gain or loss included in the financial year in which the item is derecognized.

Exploration and evaluation assets

Exploration and evaluation assets

The cost of exploration and evaluation assets acquired through a business combination or an asset acquisition are capitalized, as are expenditures incurred for the acquisition of land and surface rights. All other exploration and evaluation expenditures are expensed as incurred, including those incurred before the Company has obtained the legal rights to explore an area of interest.

Capitalization of evaluation expenditures commences when the technical feasibility and commercial viability of a project has been reached and hence it is probable that future economic benefits will flow to the Company.

Capitalized exploration and evaluation costs are classified as non-depletable mineral interests within mineral interests, plant and equipment.

Corporate general and administrative costs related to exploration and evaluation assets are expensed as incurred.

Leases

Leases

In addition to contracts which take the legal form of a lease, other significant contracts are assessed to determine whether, in substance, they are or contain a lease, if the contractual arrangement contains the use of a specific asset and the right to use that asset. Where the Company receives substantially all the risks and rewards of ownership of the asset, these assets are capitalized at the lower of the fair value of the lease asset or the estimated present value of the minimum lease payments. The corresponding lease obligation is included within lease obligations and accretion expense is recognized over the term of the lease.

The Company will engage in sale and leaseback transactions as part of its financing strategy if and when it is deemed appropriate. Where a sale and leaseback transaction results in a finance lease, any excess of sales proceeds over the carrying amount is deferred and amortized over the lease term. Where a sale and leaseback transaction results in an operating lease, and it is clear that the transaction is established at fair value, any profit or loss is recognized immediately. If the sales price is below fair value, the shortfall is recognized in income immediately, except that, if the loss is compensated for by future lease payments at below market prices, it is deferred and amortized in proportion to the lease payments over the period for which the asset is expected to be used. If the sale price is above fair value, the excess over fair value is deferred and amortized over the period the asset is expected to be used.

Operating leases are not capitalized and payments are included in the consolidated statements of operations and total comprehensive income (loss) on a straight-line basis over the term of the lease.

Provision for site reclamation and closure costs

Provision for site reclamation and closure costs

The Company recognizes a liability for site closure and reclamation costs in the period in which it is incurred for disturbance to date, if a reasonable estimate of costs can be made. The Company records the net present value of estimated future cash flows associated with site closure and reclamation as a liability when the liability is incurred and increases the carrying value of the related assets for that amount. Subsequently, these capitalized costs are amortized over the life of the related assets. At the end of each reporting period, the estimated net present value of reclamation and closure cost obligations is assessed to reflect the passage of time (accretion expense) and changes in the estimated future cash flows underlying any initial estimates.

Financial instruments

Financial instruments

Financial assets and liabilities are recognized when the Company or its subsidiaries become party to the contracts that give rise to them and are classified as loans and receivables, financial instruments at FVTPL, held-to-maturity, available for sale financial assets and other liabilities, as appropriate. The Company considers whether a contract contains an embedded derivative when the entity first becomes a party to it. The embedded derivatives are separated from the host contract if the host contract is not measured at FVTPL and when the economic characteristics and risks are not closely related to those of the host contract. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.

The Company ceases to recognize financial assets when the contractual rights to the cash flows from the assets expire, or it transfers the rights to receive the contractual cash flows on the financial assets in a transaction in which substantially all the risks and rewards of ownership of the financial assets are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset.

Other financial liabilities are recognized initially at fair value net of any directly attributable transaction costs. Subsequent to initial recognition, current debt is measured at amortized cost using the effective interest method and the currency swap was measured at FVTPL.

Financial assets at fair value through profit or loss

Financial assets at FVTPL include financial assets held for trading and financial assets designated upon initial recognition as at FVTPL. A financial asset is classified in this category principally for the purpose of selling in the short term, or if so designated by management. The Company holds warrants in certain public companies; the warrants are considered derivatives and measured at fair value, with changes in fair value at each period end recorded in earnings. Transaction costs are expensed as incurred.

Available for sale financial assets

AFS financial assets are those non-derivative financial assets that are designated as such or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL. AFS financial assets are measured at fair value upon initial recognition and at each period end, with unrealized gains or losses being recognized as a separate component of equity in other comprehensive income (loss) until the investment is derecognized or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in earnings. The Company classifies its investments in certain public companies as AFS.

Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are initially recognized at the transaction value and subsequently carried at amortized cost using the effective interest method. Gains and losses are recognized in the statement of operations and comprehensive income when the loans and receivables are derecognized or impaired, as well as through the amortization process. Interest income is recognized by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Other financial liabilities

Other financial liabilities, including loans and borrowings, are recognized initially at fair value, net of transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest method. Gains and losses are recognized in earnings when the liabilities are derecognized as well as through the amortization process. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date, and are derecognized when, and only when, the Company’s obligations are discharged or they expire.

Derivative instruments

Derivative instruments, including embedded derivatives, are recorded at fair value on initial recognition and at each subsequent reporting period. Any gains or losses arising from changes in fair value on derivatives are recorded in the statement of operations and comprehensive income.

Fair values

The fair value of quoted investments is determined by reference to market prices at the close of business on the statement of financial position date. Where there is no active market, fair value is determined using valuation techniques. These include using recent arm’s length market transactions; reference to the current market value of another instrument which is substantially the same; discounted cash flow analysis; and, pricing models.

Impairment of financial assets

Financial assets, other than those recorded at FVTPL, are assessed for indicators of impairment at each period end. A financial asset is considered impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investments have been adversely impacted.

If an available for sale asset is impaired, the change in fair value is transferred to earnings in the period, including cumulative gains or losses previously recognized in other comprehensive income (loss). Reversals of impairment in respect of equity instruments classified as available for sale are not recognized in earnings but included in other comprehensive income (loss).

Share capital

Share capital

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares are recognized as a deduction from equity, net of any tax effects.

The Company offers a dividend reinvestment plan for its common shareholders. Participation is optional and under the terms of the plan, cash dividends on common shares are used to purchase additional common shares. The common shares are issued from the Company’s treasury at a 3% discount to the average market price. The Company maintains the right to reduce or eliminate the discount at any time.

The company has suspended the active operation of its dividend reinvestment program effective August 8, 2017.

Revenue recognition

Revenue recognition

Revenue is recognized when the significant risks and rewards of ownership have passed to the buyer; it is probable that economic benefits associated with the transaction will flow to the Company; the sale price can be measured reliably; the Company has no significant continuing involvement; and the costs incurred or to be incurred in respect of the transaction can be measured reliably. In circumstances where title is retained to protect the financial security interests of the Company, revenue is recognized when the significant risks and rewards of ownership have passed to the buyer.

Revenues and trade receivables on concentrate sales are subject to adjustment upon final settlement of metal prices, weights, and assays as of a date that is typically a few months after the shipment date. The Company records adjustments to concentrate revenues and trade receivables monthly based on quoted forward prices for the expected settlement period. Adjustments for weights and assays are recorded when results are determinable or on final settlement. A portion of trade receivables are therefore measured at FVTPL and changes in value are recorded in revenues. Treatment and refining charges are netted against revenues from metal concentrate sales.

Revenues and trade receivables on doré sales are recorded at the time the refined metal is transferred to the customer’s account.

Until a mine is operating at the level intended by management, revenues will be offset against mineral interests, plant and equipment costs.

Share-based payments

Share-based payments

Share-based compensation arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions. If the fair value of the goods or services received cannot be estimated reliably, the share-based payment transaction is measured at the fair value of the equity instruments granted at the date the Company receives the goods or the services.

The fair value of share-based compensation on the grant date to key management personnel and employees is recognized as an expense, with a corresponding increase in equity, over the period that the optionee becomes unconditionally entitled to the options. The amount recognized as an expense is adjusted to reflect the actual number of share options for which the related service and vesting conditions are met.

The amount payable in respect of share appreciation rights ("SARs"), which are settled in cash, is recognized as an expense with a corresponding increase in liabilities over the period that the rights are exercisable. The liability is measured at each reporting date using the Black-Scholes option pricing model and is recorded at fair value.

Income taxes

Income taxes

Income tax on the earnings or loss for the years presented comprises current and deferred tax. Income tax is recognized in earnings or loss in the statements of operations except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax expense is the expected tax payable on the taxable income for the period, using tax rates substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for temporary differences which arise on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting, nor taxable earnings or loss. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet reporting date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable earnings will be available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent it is no longer probable that the related tax benefit will be realized.

Earnings (loss) per share

Earnings (loss) per share

The Company presents basic and diluted earnings (loss) per share (“EPS”) data for its common shares. Basic EPS is calculated by dividing earnings (loss) attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year.

Diluted EPS is determined by adjusting the earnings (loss) attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares.

Other comprehensive income (loss)

Other comprehensive income (loss)

Other comprehensive income (loss) is the change in the Company’s net assets that results from transactions, events and circumstances from sources other than the Company’s shareholders and includes items that are not included in net earnings such as unrealized gains and losses on financial assets classified as AFS, net of income taxes and gains or losses on certain derivative instruments.

Employee benefits

Employee benefits

The Company has defined contribution pension plans which cover certain of the Company’s employees. Under the provisions of the plans, the Company contributes a fixed percentage of the employees’ salaries to the pension plans. The employees are able to direct the contributions into a variety of investment funds offered by the plans. Pension costs associated with the Company’s required contributions under the plans are recognized as an expense when the employees have rendered service entitling them to the contribution and are charged to earnings or loss, or capitalized to mining interests for employees directly involved in the specific projects. The Company has no further legal or constructive obligation once the contributions have been paid.

Investments in associates

Investments in associates

The Company’s investments in associates are accounted for using the equity method of accounting. Under the equity method, the Company’s investment in an associate is initially recognized at cost and subsequently increased or decreased to recognize the Company's share of earnings and losses of the associate and for impairment losses after the initial recognition date. The Company’s share of an associate’s losses that are in excess of its investment in the associate are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. The Company's share of earnings and losses of associates are recognized in earnings during the period.

After application of the equity method, the Company determines whether it is necessary to recognize an impairment loss on the Company’s investment in an associate. The Company determines at each statement of financial position date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount in earnings. When a group entity transacts with an associate of the Company, profits and losses are eliminated to the extent of the Company’s interest in the relevant associate.

Judgments and estimates

a) Judgments

i. Commercial Production

In order to declare commercial production, a mine must be able to operate at levels intended by management. Prior to commercial production costs incurred are capitalized as part of the cost of placing the asset into service and proceeds from the sale of concentrates and doré are offset against the costs capitalized. Subsequent to the declaration of commercial production depletion of the costs incurred begins. Management considers several criteria in determining when a mine is operating at levels intended, and is therefore in commercial production.

ii. Functional Currency

The functional currency for each of the Company and its subsidiaries is the currency of the primary economic environment in which the entity operates. The Company has determined that for each subsidiary the functional currency is the United States dollar. When determining the functional currency certain judgments may be involved to assess the primary economic environment in which the entity operates. If there is a change in events or conditions which determined the primary economic environment, the Company reevaluates the functional currency for each of the subsidiary impacted.

iii. Economic recoverability and probability of future economic benefits of exploration, evaluation and development costs.

The Company makes determinations whether development and related costs incurred which have been capitalized are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits including geological and metallurgical information, economic assessments and existing permits for the life of mine plan. The estimates contained within these criteria could change over time which could affect the economic recoverability of capitalized costs.

b) Estimates

i. Revenue recognition

As is customary in the industry, revenue on provisionally priced concentrate sales is recognized based on relevant forward market prices. At each reporting period, provisionally priced concentrate sales are marked to market based on the estimated forward price for the quotational period stipulated in the contract. The adjustment to provisionally priced metal sold is included in concentrate revenue.

ii. Estimated material in the Mineral Reserves

The figures for Mineral Reserves and Mineral Resources are determined in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), issued by the Canadian Securities Administrators. NI 43-101 articulates the standards of disclosure for mineral projects including rules relating to the determination of Mineral Reserves and Mineral Resources. Management assesses the estimated Mineral Reserves and Mineral Resources used in the calculation of depletion at least annually, or whenever facts and circumstances warrant that an assessment should be made. Changes to estimates of Mineral Reserves and Mineral Resources and depletable costs including changes resulting from revisions to the Company's mine plans and changes in metal price forecasts can result in a change in future depletion rates.

Where commercial production has commenced but proven and probable reserves have yet to be established, the carrying amounts of the Company’s depletable mineral interests are depleted based on the mineable portion of measured and indicated resources.

iii. Determination of Useful Lives

Plant and equipment other than mineral interests are depreciated using the straight-line method based on the specific asset’s useful life. Should the actual useful life of the plant or equipment vary from the initial estimation, future depreciation charges may change. Should the componentization of these like assets change, depreciation charges may vary materially in the future.

iv. Impairment charges

At the end of each reporting period, the Company assesses whether any indication of impairment exists. Where an indicator of impairment exists, an impairment analysis is performed. The impairment analysis requires the use of estimates and assumptions including amongst others, long-term commodity prices, discount rates, length of mine life, future production levels, future operating costs, future capital expenditures and tax positions taken. The estimates and assumptions are subject to risk and uncertainty; hence, there is the possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the individual assets or CGUs. In such circumstances, some or all of the carrying value of the assets or CGUs may be further impaired or the impairment charge reduced with the impact recorded in the consolidated statements of operations and comprehensive income (loss).

v. Reclamation provision and site closure costs

The Company’s accounting policy for the recognition of accrued site closure costs requires significant estimates and assumptions such as the requirements of the relevant environmental, legal and regulatory framework, the magnitude of possible disturbance and the timing, extent and costs of required closure and rehabilitation activity. Changes to these estimates and assumptions may result in future actual expenditures differing from the amounts currently provided for. The decommissioning liability is periodically reviewed and updated prospectively based on the available facts and circumstances.

vi. Income taxes

The Company is periodically required to estimate the tax basis of assets and liabilities. Where applicable tax laws and regulations are either unclear or subject to varying interpretations, it is possible that changes in these estimates could occur that materially affect the amounts of deferred income tax assets and liabilities recorded in the financial statements. Changes in deferred tax assets and liabilities generally have a direct impact on earnings in the period of changes. Each period, the Company evaluates the likelihood of whether some portion or all of each deferred tax asset will not be realized. This evaluation is based on historic and future expected levels of taxable income, the pattern and timing of reversals of taxable temporary timing differences that give rise to deferred tax liabilities, and tax planning initiatives. Levels of future taxable income are affected by, among other things, the market price for saleable metals, production costs, interest rates and foreign currency exchange rates.

vii. Valuation of inventory

All inventory is valued at the lower of average cost or net realizable value. Management is required to make various estimates and assumptions to determine the value of stockpiled ore, concentrate inventories, ore stacked on leach pads and ore in process. The estimates and assumptions include surveyed quantities of stockpiled ore, in-process volumes, contained metal content, recoverable metal content, costs to recover saleable metals, payable metal values once processed and the corresponding metals prices. Changes in these estimates can result in changes to the carrying amounts of inventories and mine operating costs of future periods.

viii. Deferred stripping costs

Stripping costs incurred during the production phase of a mineral property that relate to reserves and resources that will be mined in a future period are capitalized. The Company makes estimates of the stripping activity over the life of the component of reserves and resources which will be made accessible. Changes in estimated strip ratios can result in a change to the future capitalization of stripping costs incurred.

ix. Share-based compensation

The Company makes certain estimates and assumptions when calculating the fair values of share-based compensation granted. The significant estimations and assumptions include expected volatility, expected life, expected dividend yield and expected risk-free rate of return. Changes in these assumptions may result in a material change to the expense recorded for the issuance of share-based compensation.

x. Business combinations

The information necessary to measure the fair values as at the acquisition date of assets acquired and liabilities assumed requires management to make certain judgments and estimates about future events, including but not limited to:

• Estimates of mineral reserves, mineral resources and exploration potential acquired;

• Future operating costs and capital expenditures;

• Discount rates to determine fair value of assets acquired; and

• Future metal prices and long-term foreign exchange rates.

Changes to the preliminary measurements of assets and liabilities acquired may be retrospectively adjusted when new information is obtained until the final measurements are determined within one year of the acquisition date.

xi. Contingencies

Due to the size, complexity and nature of the Company’s operations, various legal and tax matters arise in the ordinary course of business. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated.

There are no matters at December 31, 2017 that are expected to have a material effect on the consolidated financial statements of the Company.

Care and Maintenance costs

Care and Maintenance costs

Under certain circumstances the Company’s operations may be placed on Care and Maintenance status. During such times costs associated with maintaining the mine will be aggregated and reflected on the statement of operations in a separate line. These costs will be reported separately from production costs and will include all necessary costs to sustain the operations during these periods.

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2017

Corporate Information And Statement Of IFRS Compliance [Abstract]

Disclosure of interests in subsidiaries

The principal subsidiaries (operating mine sites and projects) of the Company and their geographic locations at December 31, 2017 were as follows:

Direct Parent Company	Location	Ownership Percentage	Mining Properties and Development Projects Owned
Minera San Rafael, S.A.	Guatemala	100%	El Escobal mine
La Arena S.A.	Peru	100%	La Arena mine
			La Arena II Project
Shahuindo S.A.C.	Peru	100%	Shahuindo mine
Lake Shore Gold Corp.	Canada	100%	Bell Creek mine,
		100%	Timmins West mine,
		100%	Fenn-Gib Project
Temex Resources Corp.	Canada	100%	Juby Project
		79%	Whitney Project

Schedule of estimated useful lives for assets

The estimated useful lives for assets and components that are depreciated on a straight line basis range from 2 to 20 years.

Depreciated Items	Useful Life
Computer equipment and software	2 - 5 years
Vehicles	3 - 5 years
Mining equipment	2 - 14 years
Ancillary facilities(1)	20 Years
Mineral interests and plant	UOP

⁽¹⁾  The lessor of 20 years or life of mine (“LOM”).

	Mineral Interests
	Depletable			Non- Depletable(4)			Plant & Equipment			Total
Cost
Balance at January 1, 2017	$	1,524,323		$	637,644		$	899,513		$	3,061,480
Additions	47,952			43,184			141,011			232,147
Disposals	—			—			(8,204		)	(8,204		)
Transfers(1)	13,013			(13,402		)	389			—
Change in reclamationprovision	(3,347		)	1,437			—			(1,910		)
Balance at December 31, 2017	$	1,581,941		$	668,863		$	1,032,709		$	3,283,513
Accumulated depreciation anddepletion
Balance at January 1, 2017	$	(365,248	)	$	—		$	(139,279	)	$	(504,527	)
Additions(2)	(116,796		)	(2,049		)	(50,491		)	(169,336		)
Disposals	—			—			7,139			7,139
Transfers	—			—			—			—
Balance at December 31, 2017	$	(482,044	)	$	(2,049	)	$	(182,631	)	$	(666,724	)
Carrying amount atDecember 31, 2017	$	1,099,897		$	666,814		$	850,078		$	2,616,789

	Mineral Interests
	Depletable			Non- Depletable(4)			Plant & Equipment			Total
Cost
Balance at January 1, 2016	$	714,011		$	737,108		$	595,377		$	2,046,496
Acquired mineral interests(3)(4)	278,489			337,450			174,747			790,686
Additions	69,178			7,128			134,802			211,108
Disposals	—			—			(5,413		)	(5,413		)
Transfers	444,042			(444,042		)	—			—
Change in reclamation provision	18,603			—			—			18,603
Balance at December 31, 2016	$	1,524,323		$	637,644		$	899,513		$	3,061,480
Accumulated depreciation and depletion
Balance at January 1, 2016	$	(169,160	)	$	(121,000	)	$	(81,824	)	$	(371,984	)
Additions	(75,088		)	—			(61,933		)	(137,021		)
Disposals	—			—			4,478			4,478
Transfers (5)	(121,000		)	121,000			—			—
Balance at December 31, 2016	$	(365,248	)	$	—		$	(139,279	)	$	(504,527	)
Carrying amount at December 31, 2016	$	1,159,075		$	637,644		$	760,234		$	2,556,953

⁽¹⁾  The resource statements published in January 2017 reflect an increase to the depletable base at the Timmins West mine of 72,904 ounces. These ounces were transferred from non-depletable to depletable mineral interests.

⁽²⁾  The resource statements published in January 2017 reflect a decrease to the in-situ ounces at the Timmins West mine which resulted in an impact of $2,049 to non-depletable mineral interests.

⁽³⁾  Acquired mineral interests relate to the acquisition of Lake Shore Gold on April 1, 2016.

⁽⁴⁾  Non-depletable mineral interests acquired as part of the acquisition of Lake Shore Gold on April 1, 2016 include the Whitney, Fenn-Gib and Juby projects, and other exploration potential

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BUSINESS COMBINATION (Tables)

12 Months Ended

Dec. 31, 2017

Business Combinations1 [Abstract]

Disclosure of detailed information about business combinations [text block]

The final allocation of the purchase price is as follows:

Cash and cash equivalents	$	70,187
Trade and other receivables	4,930
Inventories	13,774
Other current and non-current assets	3,876
Property, plant and equipment	174,747
Mineral interests and exploration potential	615,939
Goodwill(1)	54,617
Accounts payable, accrued liabilities and other(2)	(45,246		)
Lease obligation	(16,589		)
Reclamation provision	(3,721		)
Convertible debentures	(105,693		)
Deferred tax liability	(81,715		)
Total net assets acquired	$	685,106

⁽¹⁾  Goodwill of $54,617 was recognized due to the deferred tax liability generated on the business combination. The total amount of goodwill that is expected to be deductible for tax purposes is $nil.

⁽²⁾  Accounts payable, accrued liabilities and other includes a liability of $2,131 relating to PSUs which were outstanding and not converted prior to the acquisition on April 1, 2016. The PSUs were converted into 211,442 commons shares of the Company during the year ended December 31, 2016.

Total consideration paid was based on the April 1, 2016 opening price of Tahoe Shares on the Toronto Stock Exchange (“TSX”) of CAD$12.75 and a CAD to USD foreign exchange rate of 0.7665, and is comprised of the following:

	Shares Issued/Issuable	Consideration
Fair value estimate of the Tahoe share consideration	69,239,629	$	676,670
Fair value estimate of the consideration for options(1)	1,621,877	8,436
Total consideration	70,861,506	$	685,106

⁽¹⁾  The fair value of the options was determined using the Black-Scholes option pricing model. Where applicable, the inputs and ranges used in the measurement of the fair value (CAD) of the options were as follows:

Share price (CAD) at April 1, 2016	$	12.75
Exercise price (CAD)	2.79-25.97
Expected volatility	48.41%-62.60%
Expected life (years)	0.04-4.67
Expected dividend yield	2.46		%
Risk-free interest rate	0.54%-0.62%
Fair value (CAD)	0.01-9.65
April 1, 2016 CAD to USD exchange rate	$	0.77
Fair value (USD)	0.01-7.40

Disclosure of weighted average inputs used and grant date fair values (CAD) of share options

The fair value of the options was determined using the Black-Scholes option pricing model. Where applicable, the inputs and ranges used in the measurement of the fair value (CAD) of the options were as follows:

Share price (CAD) at April 1, 2016	$	12.75
Exercise price (CAD)	2.79-25.97
Expected volatility	48.41%-62.60%
Expected life (years)	0.04-4.67
Expected dividend yield	2.46		%
Risk-free interest rate	0.54%-0.62%
Fair value (CAD)	0.01-9.65
April 1, 2016 CAD to USD exchange rate	$	0.77
Fair value (USD)	0.01-7.40

The weighted average inputs used and grant date fair values (CAD) of Share Options granted during the years ended December 31, 2017 and 2016 are as follows:

	Years Ended December 31,
	2017			2016
Share price	$	9.64		$	13.21
Exercise price	$	9.91		$	9.51
Expected volatility(1)	51		%	51		%
Expected life (years)	3.50			3.00
Expected dividend yield	3.14		%	2.42		%
Risk-free interest rate	1.07		%	0.57		%
Pre-vest forfeiture rate	7.13		%	4.12		%
Fair value	$	2.89		$	5.76

⁽¹⁾  The expected volatility assumption is based on the historical volatility of the Company’s Canadian dollar common shares on the Toronto Stock Exchange.

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CASH AND CASH EQUIVALENTS (Tables)

12 Months Ended

Dec. 31, 2017

Cash and cash equivalents [abstract]

Disclosure of cash and cash equivalents

	December 31, 2017		December 31, 2016
Cash	$	125,134	$	162,841
Cash equivalents(1)	531		527
	$	125,665	$	163,368

⁽¹⁾ Marketable securities with short-term maturities of less than 90 days

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TRADE AND OTHER RECEIVABLES (Tables)

12 Months Ended

Dec. 31, 2017

Subclassifications of assets, liabilities and equities [abstract]

Disclosure of trade and other receivables

	December 31, 2017		December 31, 2016
Trade receivables	$	—	$	18,997
Sales tax receivable	28,138		42,844
Income tax receivable	10,005		1,419
Other	1,474		1,386
	$	39,617	$	64,646

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INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2017

Inventories [Abstract]

Disclosure of inventories

	December 31, 2017		December 31, 2016
Supplies	$	57,195	$	56,612
Stockpile	23,029		16,940
Work in process	21,129		27,649
Finished goods	27,028		25,417
	$	128,381	$	126,618

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MINERAL INTERESTS (Tables)

12 Months Ended

Dec. 31, 2017

Property, plant and equipment [abstract]

Disclosure of property plant and equipment

The estimated useful lives for assets and components that are depreciated on a straight line basis range from 2 to 20 years.

Depreciated Items	Useful Life
Computer equipment and software	2 - 5 years
Vehicles	3 - 5 years
Mining equipment	2 - 14 years
Ancillary facilities(1)	20 Years
Mineral interests and plant	UOP

⁽¹⁾  The lessor of 20 years or life of mine (“LOM”).

	Mineral Interests
	Depletable			Non- Depletable(4)			Plant & Equipment			Total
Cost
Balance at January 1, 2017	$	1,524,323		$	637,644		$	899,513		$	3,061,480
Additions	47,952			43,184			141,011			232,147
Disposals	—			—			(8,204		)	(8,204		)
Transfers(1)	13,013			(13,402		)	389			—
Change in reclamationprovision	(3,347		)	1,437			—			(1,910		)
Balance at December 31, 2017	$	1,581,941		$	668,863		$	1,032,709		$	3,283,513
Accumulated depreciation anddepletion
Balance at January 1, 2017	$	(365,248	)	$	—		$	(139,279	)	$	(504,527	)
Additions(2)	(116,796		)	(2,049		)	(50,491		)	(169,336		)
Disposals	—			—			7,139			7,139
Transfers	—			—			—			—
Balance at December 31, 2017	$	(482,044	)	$	(2,049	)	$	(182,631	)	$	(666,724	)
Carrying amount atDecember 31, 2017	$	1,099,897		$	666,814		$	850,078		$	2,616,789

	Mineral Interests
	Depletable			Non- Depletable(4)			Plant & Equipment			Total
Cost
Balance at January 1, 2016	$	714,011		$	737,108		$	595,377		$	2,046,496
Acquired mineral interests(3)(4)	278,489			337,450			174,747			790,686
Additions	69,178			7,128			134,802			211,108
Disposals	—			—			(5,413		)	(5,413		)
Transfers	444,042			(444,042		)	—			—
Change in reclamation provision	18,603			—			—			18,603
Balance at December 31, 2016	$	1,524,323		$	637,644		$	899,513		$	3,061,480
Accumulated depreciation and depletion
Balance at January 1, 2016	$	(169,160	)	$	(121,000	)	$	(81,824	)	$	(371,984	)
Additions	(75,088		)	—			(61,933		)	(137,021		)
Disposals	—			—			4,478			4,478
Transfers (5)	(121,000		)	121,000			—			—
Balance at December 31, 2016	$	(365,248	)	$	—		$	(139,279	)	$	(504,527	)
Carrying amount at December 31, 2016	$	1,159,075		$	637,644		$	760,234		$	2,556,953

⁽¹⁾  The resource statements published in January 2017 reflect an increase to the depletable base at the Timmins West mine of 72,904 ounces. These ounces were transferred from non-depletable to depletable mineral interests.

⁽²⁾  The resource statements published in January 2017 reflect a decrease to the in-situ ounces at the Timmins West mine which resulted in an impact of $2,049 to non-depletable mineral interests.

⁽³⁾  Acquired mineral interests relate to the acquisition of Lake Shore Gold on April 1, 2016.

⁽⁴⁾  Non-depletable mineral interests acquired as part of the acquisition of Lake Shore Gold on April 1, 2016 include the Whitney, Fenn-Gib and Juby projects, and other exploration potential

Summary of property plant and equipment by segment

A summary by segment of the carrying amount of mineral interests is as follows:

	Mineral Interests
	Depletable		Non- Depletable(2)		Plant & Equipment		December 31, 2017		December 31, 2016
Escobal	$	486,592	$	27,267	$	262,506	$	776,365	$	785,888
La Arena	10,443		216,910		205,824		433,177		451,551
Shahuindo	295,513		58,587		173,725		527,825		482,685
Timmins mines(1)	307,349		364,050		208,023		879,422		836,829
	$	1,099,897	$	666,814	$	850,078	$	2,616,789	$	2,556,953

⁽¹⁾  The Timmins mines were acquired on April 1, 2016 as part of the Lake Shore Gold acquisition.

⁽²⁾  Non-depletable mineral interests include exploration and evaluation projects.

Disclosure of reconciliation of changes in intangible assets and goodwill [text block]

The carrying amount of goodwill has been allocated to the following cash generating units (“CGUs”) and is included in the respective operating segment assets:

	La Arena II(1)		Timmins Exploration Potential(2)		Total
January 1, 2016	$	57,468	$	—	$	57,468
Additions	—		54,617		54,617
December 31, 2016	$	57,468	$	54,617	$	112,085
Additions	—		—		—
December 31, 2017	$	57,468	$	54,617	$	112,085

⁽¹⁾  The La Arena II CGU (previously "La Arena Sulphides") is included in the La Arena operating segment as non-depletable mineral interests.

⁽²⁾  The allocation of goodwill associated with the acquisition of Lake Shore Gold was allocated 100% to the Timmins Exploration Potential CGU which is included in the Timmins mines operating segment as non-depletable mineral interests.

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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2017

Trade and other payables [abstract]

Disclosure of accounts payable and accrued liabilities

	December 31, 2017		December 31, 2016
Trade payables	$	49,487	$	70,315
Accrued trade and other payables	25,685		22,976
Royalties	16,000		15,044
Accrued payroll and related benefits	18,912		20,835
	$	110,084	$	129,170

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DEBT (Tables)

12 Months Ended

Dec. 31, 2017

Financial Instruments [Abstract]

Schedule of Debt

	2017		2016
Beginning balance at January 1	$	35,000	$	35,000
Borrowings/additions	—		35,000
Repayments	—		(35,000		)
Ending balance at December 31	$	35,000	$	35,000

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LEASE OBLIGATIONS (Tables)

12 Months Ended

Dec. 31, 2017

Leases1 [Abstract]

Disclosure of finance lease and operating lease by lessee [text block]

	2017			2016
Beginning balance at January 1	$	15,946		$	13,862
Additions(1)	—			24,531
Payments(2)	(9,456		)	(22,468		)
Accrued interest	451			559
Foreign exchange gain (loss)	813			(538		)
Ending balance at December 31	$	7,754		$	15,946

⁽¹⁾  2016 additions include $16,589 related to finance leases acquired as a result of the Lake Shore Gold business combination on April 1, 2016 and $7,942 in other additions.

⁽²⁾  2016 Payments include $10,420 for the retirement of the La Ramada sale-leaseback.

	December 31, 2017		December 31, 2016
Current portion	$	6,146	$	8,696
Non-current portion	1,608		7,250
	$	7,754	$	15,946

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RECLAMATION PROVISION (Tables)

12 Months Ended

Dec. 31, 2017

Other Provisions, Contingent Liabilities And Contingent Assets [Abstract]

Disclosure of other reclamation provision

	2017			2016
Beginning balance at January 1	$	64,219		$	39,524
Additions to reclamation provision(1)	—			3,722
Accretion expense	2,640			2,370
Revisions in estimates and obligations	(3,803		)	18,603
Ending balance at December 31(2)	$	63,056		$	64,219

⁽¹⁾  2016 additions relate to the Timmins mines acquired as a result of the Lake Shore Gold acquisition on April 1, 2016.

⁽²⁾  Ending balance includes $487 of current and $62,569 of long-term reclamation.

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REVENUES (Tables)

12 Months Ended

Dec. 31, 2017

Revenue [abstract]

Disclosure of major customers [text block]

The doré revenues by customer for the years ended December 31, 2017 and 2016 as follows:

			Years Ended December 31,
	2017		2016
Customer 1	43	%	60	%
Customer 2	26	%	32	%
Other customers	31	%	8	%
Total doré revenues	100	%	100	%

The concentrate revenues by customer for the years ended December 31, 2017 and 2016 are as follows:

			Years Ended December 31,
	2017		2016
Customer 1	18	%	34	%
Customer 2	40	%	24	%
Customer 3	13	%	23	%
Customer 4	27	%	18	%
Other customers	2	%	1	%
Total concentrate revenues	100	%	100	%

Schedule of Revenues by Mineral Type

			Years Ended December 31,
	2017		2016
Silver	$	170,529	$	316,793
Gold	542,702		437,464
Lead	7,274		9,738
Zinc	13,052		20,508
	$	733,557	$	784,503

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PRODUCTION COSTS (Tables)

12 Months Ended

Dec. 31, 2017

Analysis of income and expense [abstract]

Disclosure of productions costs

			Years Ended December 31,
	2017		2016
Raw materials and consumables	$	130,185	$	163,304
Salaries and benefits	90,583		85,349
Contractors and outside services	102,064		100,557
Other expenses	19,808		1,717
Changes in inventory	5,506		(18,206		)
	$	348,146	$	332,721

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CARE AND MAINTENANCE COSTS (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure Of Care And Maintenance Costs [Abstract]

Disclosure Of Care And Maintenance Costs

			Years Ended December 31,
	2017		2016
Raw materials and consumables	$	4,094	$	—
Salaries and benefits	11,499		—
Contractors and outside services	8,115		—
Other expenses	1,147		—
	$	24,855	$	—

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GENERAL AND ADMINISTRATIVE EXPENSES (Tables)

12 Months Ended

Dec. 31, 2017

Analysis of income and expense [abstract]

Schedule of General and Administrative Expenses

				Years Ended December 31,
	Notes	2017		2016
Salaries and benefits		$	18,318	$	12,934
Share-based payments	19	5,657		7,224
Consulting and professional fees		9,028		8,340
Transaction costs	6	—		11,134
Administrative and other		12,785		7,875
		$	45,788	$	47,507

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SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION (Tables)

12 Months Ended

Dec. 31, 2017

Share-based Payment Arrangements [Abstract]

Disclosure of number and weighted average exercise price of share options

The number and weighted average exercise price in CAD of Share Options outstanding at December 31, 2017 and December 31, 2016 are as follows:

	Weighted average exercise price		Number of Share Options
Outstanding at January 1, 2016	$	14.92	4,068,457
Granted(1)	9.29		2,972,876
Exercised	9.13		(2,819,838	)
Forfeited	13.82		(335,000	)
Expired	16.57		(674,750	)
Outstanding at December 31, 2016	14.55		3,211,745
Granted	9.91		1,407,000
Exercised	10.82		(112,136	)
Forfeited	13.68		(307,000	)
Expired	17.37		(332,584	)
Outstanding at December 31, 2017	$	12.79	3,867,025

⁽¹⁾  Includes the replacement options granted on April 1, 2016 as a result of the acquisition of Lake Shore Gold (note 6).

Disclosure of number and weighted average remaining contractual life of share options

The following table summarizes information about Share Options outstanding and exercisable at December 31, 2017 (exercise range and prices in CAD):

Exercise price range	Outstanding	Weighted average exercise price		Weighted average remaining life (years)	Exercisable	Weighted average exercise price		Weighted average remaining life (years)
$   2.80-9.67	235,970	$	7.68	2.15	163,970	$	7.99	1.06
$ 9.68-10.59	1,143,000	$	10.00	4.20	—	$	—	—
$ 10.60-12.56	1,001,000	$	12.35	3.22	326,333	$	12.38	3.19
$ 12.57-15.74	896,055	$	15.17	2.32	592,055	$	15.13	2.22
$ 15.75-23.37	591,000	$	17.37	0.78	520,000	$	17.10	0.41
	3,867,025	$	12.79	2.86	1,602,358	$	14.48	1.71

Disclosure of exercise price range for share options

The following table summarizes information about Share Options outstanding and exercisable at December 31, 2017 (exercise range and prices in CAD):

Exercise price range	Outstanding	Weighted average exercise price		Weighted average remaining life (years)	Exercisable	Weighted average exercise price		Weighted average remaining life (years)
$   2.80-9.67	235,970	$	7.68	2.15	163,970	$	7.99	1.06
$ 9.68-10.59	1,143,000	$	10.00	4.20	—	$	—	—
$ 10.60-12.56	1,001,000	$	12.35	3.22	326,333	$	12.38	3.19
$ 12.57-15.74	896,055	$	15.17	2.32	592,055	$	15.13	2.22
$ 15.75-23.37	591,000	$	17.37	0.78	520,000	$	17.10	0.41
	3,867,025	$	12.79	2.86	1,602,358	$	14.48	1.71

Disclosure of number other equity instruments outstanding

The number of SARs outstanding and exercisable at December 31, 2017 and December 31, 2016 is as follows:

	Number of SARs
Outstanding at January 1, 2016	43,000
Issued	135,000
Exercised	(23,000	)
Expired/forfeited	(1,000	)
Outstanding at December 31, 2016	154,000
Issued	—
Exercised	(2,000	)
Expired/forfeited	(26,500	)
Outstanding at December 31, 2017	125,500
Exercisable at December 31, 2016	12,000
Exercisable at December 31, 2017	—

The number of DSAs outstanding at December 31, 2017 and December 31, 2016 is as follows:

Outstanding at January 1, 2016	350,000
Granted	342,000
Shares issued	(184,000	)
Cancelled/forfeited	(45,000	)
Outstanding at December 31, 2016	463,000
Granted	195,000
Shares issued	(215,000	)
Cancelled/forfeited	(26,000	)
Outstanding at December 31, 2017	417,000

Disclosure of weighted average inputs used and grant date fair values (CAD) of share options

The fair value of the options was determined using the Black-Scholes option pricing model. Where applicable, the inputs and ranges used in the measurement of the fair value (CAD) of the options were as follows:

Share price (CAD) at April 1, 2016	$	12.75
Exercise price (CAD)	2.79-25.97
Expected volatility	48.41%-62.60%
Expected life (years)	0.04-4.67
Expected dividend yield	2.46		%
Risk-free interest rate	0.54%-0.62%
Fair value (CAD)	0.01-9.65
April 1, 2016 CAD to USD exchange rate	$	0.77
Fair value (USD)	0.01-7.40

The weighted average inputs used and grant date fair values (CAD) of Share Options granted during the years ended December 31, 2017 and 2016 are as follows:

	Years Ended December 31,
	2017			2016
Share price	$	9.64		$	13.21
Exercise price	$	9.91		$	9.51
Expected volatility(1)	51		%	51		%
Expected life (years)	3.50			3.00
Expected dividend yield	3.14		%	2.42		%
Risk-free interest rate	1.07		%	0.57		%
Pre-vest forfeiture rate	7.13		%	4.12		%
Fair value	$	2.89		$	5.76

⁽¹⁾  The expected volatility assumption is based on the historical volatility of the Company’s Canadian dollar common shares on the Toronto Stock Exchange.

Disclosure of weighted average inputs used and grant date fair values (CAD) of other equity instruments

The weighted average inputs used and grant date fair values (CAD) of SARs granted during the years ended December 31, 2017 and 2016 are as follows:

	Years Ended December 31,
	2017			2016
Share price	$	—		$	12.64
Exercise price	$	—		$	12.38
Expected volatility	—		%	52		%
Expected life (years)	—			5.00
Risk-free interest rate	—		%	0.61		%
Fair value	$	—		$	5.74

Disclosure of weighted average inputs used and grant date fair values (CAD) of other equity instruments modified

The weighted average inputs used and re-measurement date fair values (CAD) of SARs as at December 31, 2017 and 2016 are as follows:

	December 31,			December 31,
	2017			2016
Share price	$	6.03		$	12.65
Exercise price	$	14.12		$	14.05
Expected volatility	55		%	50		%
Expected life (years)	2.92			3.80
Risk-free interest rate	1.81		%	1.02		%
Fair value	$	0.99		$	4.60

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INCOME TAX EXPENSE (Tables)

12 Months Ended

Dec. 31, 2017

Income Taxes [Abstract]

Disclosure of income tax expense (benefit)

				Years Ended December 31,
	2017			2016
Current income tax expense
Current period	$	42,455		$	69,832
Prior period	(55		)	822
	42,400			70,654
Deferred tax expense (benefit)
Origination and reversal of temporary differences	(4,366		)	20,202
Income tax expense	$	38,034		$	90,856

Disclosure of income tax reconciliation

The reconciliation of income taxes at statutory rates with the reported taxes is as follows:

	Years Ended December 31,
	2017			2016
Earnings (loss) before income taxes	$	119,828		$	208,732
Statutory tax rate	26.00		%	26.00		%
Income tax expense (benefit)	31,155			54,270
Reconciling items:
Difference between statutory and foreign tax rates	2,978			9,127
Non-deductible share-based payments	1,843			2,741
Impact of foreign exchange on deferred income tax assets and liabilities	(4,589		)	(3,080		)
Non-deductible expenses	6,312			22,363
Change in unrecognized deferred tax assets	(219		)	(2,758		)
Other	554			8,193
Income tax expense (benefit)	$	38,034		$	90,856

Disclosure of deferred tax assets and liabilities

At December 31, 2017 and 2016, the Company’s significant components of deferred income tax assets and deferred tax liabilities were as follows:

	December 31, 2017			December 31, 2016
Deferred income tax assets
Unused non-capital losses	$	38,140		$	39,704
Inventories and receivables	369			1,994
Reclamation and closure cost obligations	12,917			13,019
Other	8,438			22,648
	$	59,864		$	77,365
Deferred income tax liabilities
Mining interests	(286,214		)	(310,028		)
Inventories and receivables	(3,465		)	(1,518		)
	(289,679		)	(311,546		)
Net deferred income tax liabilities	$	(229,815	)	$	(234,181	)

	December 31, 2017		December 31, 2016
Net deferred income tax liabilities	$	229,815	$	234,181
Deferred tax assets related to inventories and receivables	369		1,994
Deferred income tax liabilities	$	230,184	$	236,175

Disclosure of deductible temporary differences for which no deferred tax assets have been recognized

Deductible temporary differences for which no deferred tax assets have been recognized at December 31, 2017 and 2016 are as follows:

	December 31, 2017		December 31, 2016
Tax losses and tax credits	$	147,427	$	140,695
Deductible temporary differences
Cumulative eligible capital	568		611
Financing costs	803		1,937
Unrealized capital losses	—		325
Reclamation and closure cost obligations	23,585		26,409
Deductible temporary difference	$	172,383	$	169,977

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EARNINGS (LOSS) PER SHARE (Tables)

12 Months Ended

Dec. 31, 2017

Earnings per share [abstract]

Earnings (loss) per share

	Year Ended December 31, 2017					Year Ended December 31, 2016
	Earnings		Weighted average shares outstanding	Earnings per share		Loss		Weighted average shares outstanding	Loss per share
Basic EPS(1)	$	81,793	312,804,323	$	0.26	$	117,876	289,726,501	$	0.41
Dilutive
securities:
Share options	—		29,177	—		—		261,545	—
Diluted EPS	$	81,793	312,833,500	$	0.26	$	117,876	289,988,046	$	0.41

⁽¹⁾  The weighted average shares outstanding used in the basic earnings per share calculation includes the dilutive impact of 417,000 DSAs (year ended December 31, 2016: 463,000 DSAs).

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SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

12 Months Ended

Dec. 31, 2017

Cash Flow Statement [Abstract]

Disclosure of supplemental cash flow information

				Years Ended December 31,
	2017			2016
Trade and other receivables	$	33,302		$	(16,482	)
Inventories	5,722			(38,024		)
Other current assets	(535		)	1,474
Other non-current assets	(11,541		)	2,619
Accounts payable and accrued liabilities, and other non-current liabilities	(18,705		)	(17,143		)
Changes in working capital	$	8,243		$	(67,556	)

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SEGMENTED INFORMATION (Tables)

12 Months Ended

Dec. 31, 2017

Operating Segments [Abstract]

Disclosure of operating segments

Significant information relating to the Company’s operating segments as at and for the year ended December 31, 2017 is summarized as follows:

			December 31, 2017(1)
	Escobal(2)		La Arena		Shahuindo			Timmins  mines			Total
Mineral interests and plantand equipment	$	776,364	$	433,178	$	527,826		$	879,421		$	2,616,789
Goodwill	—		57,468		—			54,617			$	112,085
Total assets	906,434		573,566		621,985			978,653			$	3,080,638
Total liabilities(3)	$	81,208	$	160,979	$	(539,512	)	$	(158,425	)	$	(455,750	)

			Year Ended December 31, 2017
	Escobal		La Arena		Shahuindo		Timmins mines		Total
Revenues	$	192,510	$	233,782	$	95,425	$	211,840	$	733,557
Production costs	61,934		126,376		53,861		105,975		$	348,146
Royalties	10,521		—		—		5,049		$	15,570
Care and Maintenance(4)	24,855		—		—		—		$	24,855
Depreciation anddepletion(5)	32,858		48,092		11,452		60,614		$	153,016
Mine operating earnings	62,342		59,314		30,112		40,202		191,970
Capital expenditures	$	22,901	$	32,019	$	69,352	$	98,775	$	223,047

⁽¹⁾  Balances presented are before intercompany transaction eliminations not included in segmented disclosure.

⁽²⁾  Escobal segment includes corporate and other

⁽³⁾  Includes intercompany payables and receivables to reconcile to the total liabilities on the statement of financial position

⁽⁴⁾  Due to the suspension of mining operations following the suspension of the Escobal mining license in the beginning of the third quarter care and maintenance costs, which comprise the cost of maintaining the Escobal mine and include environmental costs, salaries and legal fees have been incurred.

⁽⁵⁾  The depreciation and depletion expense for La Arena and Shahuindo mines includes a true-up of $11.3 million related to prior years.

Significant information relating to the Company’s reportable operating segments as at and for the year ended December 31, 2016 is summarized as follows:

				December 31, 2016(1)(2)(3)
	Escobal			La Arena		Shahuindo		Timmins mines		Total
Mineral interests and plant and equipment	$	785,888		$	451,551	$	482,685	$	836,829	$	2,556,953
Goodwill	—			57,468		—		54,617		$	112,085
Total assets(4)	963,824			611,344		547,153		948,932		$	3,071,253
Total liabilities(4)(5)	$	(27,225	)	$	71,490	$	319,432	$	135,402	$	499,099

			Year Ended December 31, 2016(1)(2)(3)
	Escobal		La Arena		Shahuindo		Timmins mines		Total
Revenues	$	355,812	$	244,397	$	47,174	$	137,120	$	784,503
Production costs	128,552		115,229		25,118		63,822		$	332,721
Royalties	18,741		—		—		4,172		$	22,913
Depreciation and depletion	53,204		27,779		10,016		33,745		$	124,744
Mine operating earnings	155,315		101,389		12,040		35,381		$	304,125
Capital expenditures(3)	$	30,077	$	35,366	$	63,893	$	81,772	$	211,108

⁽¹⁾  The Timmins mines were acquired on April 1, 2016 as part of the Lake Shore Gold acquisition. Results of operations are not included prior to April 1, 2016.

⁽²⁾  Shahuindo declared commercial production effective May 1, 2016. All pre-operating revenues from production at Shahuindo have been credited against construction capital through April 30, 2016.

⁽³⁾  Capital expenditures in the Timmins mines segment includes the acquisition of the 2% net smelter return (“NSR”) royalty related to production at the Bell Creek mine for $13,676.

⁽⁴⁾  Balances presented are before intercompany transaction eliminations not included in segmented disclosure.

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Measurement [Abstract]

Disclosure of fair value measurement of assets

At December 31, 2017 and 2016, the levels in the FV hierarchy into which the Company’s financial assets and liabilities are measured and recognized on the statement of financial position at fair value are categorized as follows:

	December 31, 2017						December 31, 2016
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Investments(1)	$	320	$	—	$	—	$	39	$	—	$	—
Provisionally priced trade receivables	—		—				—		18,997
Total	$	320	$	—	$	—	$	39	$	18,997	$	—

⁽¹⁾  Investments are included in other current assets.

Disclosure of fair value measurement of liabilities

At December 31, 2017 and 2016, the levels in the FV hierarchy into which the Company’s financial assets and liabilities are measured and recognized on the statement of financial position at fair value are categorized as follows:

	December 31, 2017						December 31, 2016
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Investments(1)	$	320	$	—	$	—	$	39	$	—	$	—
Provisionally priced trade receivables	—		—				—		18,997
Total	$	320	$	—	$	—	$	39	$	18,997	$	—

⁽¹⁾  Investments are included in other current assets.

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FINANCIAL RISK MANAGEMENT (Tables)

12 Months Ended

Dec. 31, 2017

Financial Instruments [Abstract]

Disclosure of maturity analysis for non-derivative financial liabilities

The Company’s significant undiscounted commitments at December 31, 2017 are as follows:

							December 31, 2017		December 31, 2016
	1 year		2-5 years		5+ years		Total		Total
Accounts payable and accrued liabilities	$	110,084	$	—	$	—	$	110,084	$	129,170
Debt	35,000		—		—		35,000		35,000
Income tax payable	2,277		—		—		2,277		10,733
Lease and contractual agreements	23,087		3,261		210		26,558		15,946
Commitments(1)	70,513		418		—		70,931		123,481
Other non-current liabilities	2,780		2,779		—		5,559		24,917
Reclamation provision	717		19,261		73,360		93,338		99,273
	$	244,458	$	25,719	$	73,570	$	343,747	$	438,520

⁽¹⁾  Commitments to purchase equipment, services, materials and supplies.

Disclosure of maturity analysis for derivative financial liabilities

The Company’s significant undiscounted commitments at December 31, 2017 are as follows:

							December 31, 2017		December 31, 2016
	1 year		2-5 years		5+ years		Total		Total
Accounts payable and accrued liabilities	$	110,084	$	—	$	—	$	110,084	$	129,170
Debt	35,000		—		—		35,000		35,000
Income tax payable	2,277		—		—		2,277		10,733
Lease and contractual agreements	23,087		3,261		210		26,558		15,946
Commitments(1)	70,513		418		—		70,931		123,481
Other non-current liabilities	2,780		2,779		—		5,559		24,917
Reclamation provision	717		19,261		73,360		93,338		99,273
	$	244,458	$	25,719	$	73,570	$	343,747	$	438,520

⁽¹⁾  Commitments to purchase equipment, services, materials and supplies.

Disclosure of foreign exchange risk

Cash and cash equivalents held in foreign currencies, denominated in USD, are as follows:

	December 31, 2017		December 31, 2016
Guatemalan quetzal	$	1,011	$	564
Peruvian sol	4,232		3,579
Canadian dollar	1,971		20,386
Other	—		82
	$	7,214	$	24,611

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CAPITAL MANAGEMENT (Tables)

12 Months Ended

Dec. 31, 2017

Corporate Information And Statement Of IFRS Compliance [Abstract]

Disclosure of capital management

The capital structure of the Company consists of common equity, comprising share capital and reserves net of accumulated deficit, and debt, which includes the Facility and finance leases.

	Notes	December 31, 2017			December 31, 2016
Shareholders’ equity		$	2,624,888		$	2,572,154
Debt	12	35,000			35,000
Lease obligations	13	7,754			15,946
		2,667,642			2,623,100
Cash and cash equivalents	7	(125,665		)	(163,368		)
Restricted cash		(5,124		)	(4,672		)
		$	2,536,853		$	2,455,060

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RELATED PARTIES (Tables)

12 Months Ended

Dec. 31, 2017

Related Party [Abstract]

Disclosure of transactions between related parties

Key management personnel compensation included in corporate and general administrative expenses is as follows:

	Years Ended
	December 31,
	2017		2016
Short-term employee benefits(1)	$	8,804	$	8,870
Share-based payments	5,163		5,948
	$	13,967	$	14,818

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SIGNIFICANT ACCOUNTING POLICIES - Principal Subsidiaries (Details)	12 Months Ended
	Dec. 31, 2017 USD ($)
Minera San Rafael, S.A. | Guatemala | El Escobal mine
Disclosure of subsidiaries [line items]
Ownership Percentage	100.00%
La Arena S.A. | Peru | La Arena mine
Disclosure of subsidiaries [line items]
Ownership Percentage	100.00%
Shahuindo S.A.C. | Peru | Shahuindo mine
Disclosure of subsidiaries [line items]
Ownership Percentage	100.00%
Lake Shore Gold Corp.
Disclosure of subsidiaries [line items]
Gain on equity method investment	$ 1,059
Lake Shore Gold Corp. | Canada | Bell Creek mine,
Disclosure of subsidiaries [line items]
Ownership Percentage	100.00%
Lake Shore Gold Corp. | Canada | Timmins West mine,
Disclosure of subsidiaries [line items]
Ownership Percentage	100.00%
Lake Shore Gold Corp. | Canada | Fenn-Gib Project
Disclosure of subsidiaries [line items]
Ownership Percentage	100.00%
Temex Resources Corp. | Canada | Juby Project
Disclosure of subsidiaries [line items]
Ownership Percentage	100.00%
Temex Resources Corp. | Canada | Whitney Project
Disclosure of subsidiaries [line items]
Ownership Percentage	79.00%

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SIGNIFICANT ACCOUNTING POLICIES - Useful Lives of PP&E (Details)	12 Months Ended
	Dec. 31, 2017
Bottom of range
Disclosure of detailed information about property, plant and equipment [line items]
Conversion of mineral resources to mineral reserves, historical data, percent	40.00%
Useful lives of property, plant and equipment	2 years
Top of range
Disclosure of detailed information about property, plant and equipment [line items]
Conversion of mineral resources to mineral reserves, historical data, percent	80.00%
Useful lives of property, plant and equipment	20 years
Computer equipment and software | Bottom of range
Disclosure of detailed information about property, plant and equipment [line items]
Useful lives of property, plant and equipment	2 years
Computer equipment and software | Top of range
Disclosure of detailed information about property, plant and equipment [line items]
Useful lives of property, plant and equipment	5 years
Vehicles | Bottom of range
Disclosure of detailed information about property, plant and equipment [line items]
Useful lives of property, plant and equipment	3 years
Vehicles | Top of range
Disclosure of detailed information about property, plant and equipment [line items]
Useful lives of property, plant and equipment	5 years
Mining equipment | Bottom of range
Disclosure of detailed information about property, plant and equipment [line items]
Useful lives of property, plant and equipment	2 years
Mining equipment | Top of range
Disclosure of detailed information about property, plant and equipment [line items]
Useful lives of property, plant and equipment	14 years
Ancillary facilities
Disclosure of detailed information about property, plant and equipment [line items]
Useful lives of property, plant and equipment	20 years

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SIGNIFICANT ACCOUNTING POLICIES - Share capital (Details)	12 Months Ended
	Dec. 31, 2017
Corporate Information And Statement Of IFRS Compliance [Abstract]
Treasury stock discount to average market price	3.00%

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BUSINESS COMBINATION - Acquisition of Lake Share Gold (Details)		12 Months Ended
	Apr. 01, 2016 CAD year	Dec. 31, 2017 USD ($) year shares	Dec. 31, 2017 CAD year shares	Dec. 31, 2016 USD ($) year	Dec. 31, 2016 CAD year	Apr. 01, 2016 USD ($) CAD / $ shares	Apr. 01, 2016 CAD CAD / $ shares
Disclosure of detailed information about business combination [line items]
Weighted average share price | CAD	CAD 12.75		CAD 9.00		CAD 15.46
Closing foreign exchange rate | CAD / $						0.7665	0.7665
Inputs To Option Pricing Model Share Options Granted [Abstract]
Share price (CAD/share) | CAD			9.64		13.21
Exercise price (CAD per share) | CAD			CAD 9.91		CAD 9.51
Expected life (years) | year		3.50	3.50	3.00	3.00
Expected volatility		51.00%	51.00%	51.00%	51.00%
Expected dividend yield		3.14%	3.14%	2.42%	2.42%
Risk-free interest rate		1.07%	1.07%	0.57%	0.57%
Fair value (CAD/USD Per Share)		$ 2.89		$ 5.76
Amounts recognised as of acquisition date for each major class of assets acquired and liabilities assumed [abstract]
Goodwill		112,085,000		112,085,000
Loss on debenture conversion		0		32,304,000
Transaction costs		$ 0		$ 11,134,000
Timmins West mine, | Lake Shore Gold Corp. | Canada
Amounts recognised as of acquisition date for each major class of assets acquired and liabilities assumed [abstract]
Ownership Percentage		100.00%	100.00%
Bell Creek mine, | Lake Shore Gold Corp. | Canada
Amounts recognised as of acquisition date for each major class of assets acquired and liabilities assumed [abstract]
Ownership Percentage		100.00%	100.00%
Lake Shore Gold Corp.
Disclosure of detailed information about business combination [line items]
Percentage of voting equity interests acquired						100.00%	100.00%
Shares issued per acquiree share | shares						0.1467	0.1467
Closing foreign exchange rate | CAD / $						0.77	0.77
Acquisition-date fair value of total consideration transferred [abstract]
Shares Issued/Issuable | shares						70,861,506	70,861,506
Consideration						$ 685,106,000
Inputs To Option Pricing Model Share Options Granted [Abstract]
Share price (CAD/share) | CAD	CAD 12.75
Expected dividend yield	2.46%
Amounts recognised as of acquisition date for each major class of assets acquired and liabilities assumed [abstract]
Cash and cash equivalents						70,187,000
Trade and other receivables						4,930,000
Inventories						13,774,000
Other current and non-current assets						3,876,000
Goodwill						54,617,000
Accounts payable, accrued liabilities and other						(45,246,000)
Lease obligation						(16,589,000)
Reclamation provision						(3,721,000)
Convertible debentures						(105,693,000)
Deferred tax liability						(81,715,000)
Total net assets acquired						685,106,000
Goodwill expected to be deductible for tax purposes						0
Liability for PSUs						2,131,000
Shares issued on conversion of Performance Share Units (“PSUs”) on acquisition of Lake Shore Gold (in shares) | shares		211,442	211,442
Transaction costs		$ 11,134,000
Lake Shore Gold Corp. | Common stock issued
Amounts recognised as of acquisition date for each major class of assets acquired and liabilities assumed [abstract]
Transaction costs		$ 5,332,000
Transactions costs, number of shares issued | shares		455,019	455,019
Lake Shore Gold Corp. | Bottom of range
Inputs To Option Pricing Model Share Options Granted [Abstract]
Exercise price (CAD per share) | CAD	CAD 2.79
Expected life (years) | year	0.04
Expected volatility	48.41%
Risk-free interest rate	0.54%
Fair value (CAD/USD Per Share)						0.01	CAD 0.01
Lake Shore Gold Corp. | Top of range
Inputs To Option Pricing Model Share Options Granted [Abstract]
Exercise price (CAD per share) | CAD	CAD 25.97
Expected life (years) | year	4.67
Expected volatility	62.60%
Risk-free interest rate	0.62%
Fair value (CAD/USD Per Share)						7.40	CAD 9.65
Lake Shore Gold Corp. | Property, plant and equipment
Amounts recognised as of acquisition date for each major class of assets acquired and liabilities assumed [abstract]
Property, plant and equipment						174,747,000
Lake Shore Gold Corp. | Mineral interests and exploration potential
Amounts recognised as of acquisition date for each major class of assets acquired and liabilities assumed [abstract]
Property, plant and equipment						$ 615,939,000
Lake Shore Gold Corp. | Fair value estimate of the Tahoe share consideration
Acquisition-date fair value of total consideration transferred [abstract]
Shares Issued/Issuable | shares						69,239,629	69,239,629
Consideration						$ 676,670,000
Lake Shore Gold Corp. | Fair value estimate of the consideration for options
Acquisition-date fair value of total consideration transferred [abstract]
Shares Issued/Issuable | shares						1,621,877	1,621,877
Consideration						$ 8,436,000

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BUSINESS COMBINATION - Acquisition of Lake Share Gold, Convertible Debentures (Details) $ in Thousands			1 Months Ended	12 Months Ended
	May 16, 2016 USD ($) shares	Apr. 01, 2016 days CAD / shares	May 13, 2016 shares	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Disclosure of detailed information about borrowings [line items]
Interest rate percentage					2.95%
Loss on debenture conversion				$ 0	$ 32,304
Convertible debentures
Disclosure of detailed information about borrowings [line items]
Interest rate percentage		6.25%
Redemption price percentage		100.00%
Conversion rate		0.1047856
Debentures redeemed percentage of volume weighted average trading price		95.00%
Debentures redeemed trading days | days		20
Conversion price (in cad per share) | CAD / shares		CAD 9.5433
Conversion rate (per $1,000 principal amount)		104.7856
Shares issued on conversion and redemption of convertible debentures (in shares) | shares	122,264		10,611,411
Loss on debenture conversion	$ 32,304

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CASH AND CASH EQUIVALENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash and cash equivalents [abstract]
Cash	$ 125,134	$ 162,841
Cash equivalents(1)	531	527
Cash and cash equivalents	$ 125,665	$ 163,368	$ 108,667

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TRADE AND OTHER RECEIVABLES (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Subclassifications of assets, liabilities and equities [abstract]
Trade receivables	$ 0	$ 18,997
Sales tax receivable	28,138	42,844
Income tax receivable	10,005	1,419
Other	1,474	1,386
Trade and other current receivables	$ 39,617	$ 64,646

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INVENTORIES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Inventories [Abstract]
Supplies	$ 57,195,000	$ 56,612,000
Stockpile	23,029,000	16,940,000
Work in process	21,129,000	27,649,000
Finished goods	27,028,000	25,417,000
Inventories	128,381,000	126,618,000
Cost of inventories recognised as expense during period	501,682,000	$ 457,465,000
Inventory write-down	$ 0

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MINERAL INTERESTS - Mineral Interests, Plant & Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	$ 2,556,953
balance at end of period	2,616,789	$ 2,556,953
Cost
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	3,061,480	2,046,496
Acquired mineral interests		790,686
Additions	232,147	211,108
Disposals	(8,204)	(5,413)
Transfers	0
Change in reclamation provision	(1,910)	18,603
balance at end of period	3,283,513	3,061,480
Accumulated depreciation and depletion
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	(504,527)	(371,984)
Additions	(169,336)	(137,021)
Disposals	7,139	4,478
Transfers	0	0
balance at end of period	(666,724)	(504,527)
Mineral Interests, Depletable
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	1,159,075
balance at end of period	1,099,897	1,159,075
Mineral Interests, Depletable | Cost
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	1,524,323	714,011
Acquired mineral interests		278,489
Additions	47,952	69,178
Disposals	0	0
Transfers	13,013
Change in reclamation provision	(3,347)	18,603
balance at end of period	1,581,941	1,524,323
Mineral Interests, Depletable | Accumulated depreciation and depletion
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	(365,248)	(169,160)
Additions	(116,796)	(75,088)
Disposals	0	0
Transfers	0	(121,000)
balance at end of period	(482,044)	(365,248)
Mineral Interests, Non-Depletable
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	637,644
balance at end of period	666,814	637,644
Mineral Interests, Non-Depletable | Cost
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	637,644	737,108
Acquired mineral interests		337,450
Additions	43,184	7,128
Disposals	0	0
Transfers	(13,402)
Change in reclamation provision	1,437	0
balance at end of period	668,863	637,644
Mineral Interests, Non-Depletable | Accumulated depreciation and depletion
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	0	(121,000)
Additions	(2,049)	0
Disposals	0	0
Transfers	0	121,000
balance at end of period	(2,049)	0
Plant & Equipment
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	760,234
balance at end of period	850,078	760,234
Plant & Equipment | Cost
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	899,513	595,377
Acquired mineral interests		174,747
Additions	141,011	134,802
Disposals	(8,204)	(5,413)
Transfers	389
Change in reclamation provision	0	0
balance at end of period	1,032,709	899,513
Plant & Equipment | Accumulated depreciation and depletion
Reconciliation of changes in property, plant and equipment [abstract]
Balance at beginning of period	(139,279)	(81,824)
Additions	(50,491)	(61,933)
Disposals	7,139	4,478
Transfers	0	0
balance at end of period	$ (182,631)	$ (139,279)

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MINERAL INTERESTS - Mineral Interests By Segment (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	$ 2,616,789	$ 2,556,953
Mineral Interests, Depletable
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	1,099,897	1,159,075
Mineral Interests, Non-Depletable
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	666,814	637,644
Property, plant and equipment
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	850,078	760,234
Capitalized stripping costs
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	10,157	4,206
Escobal
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	776,365	785,888
Escobal | Mineral Interests, Depletable
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	486,592
Escobal | Mineral Interests, Non-Depletable
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	27,267
Escobal | Property, plant and equipment
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	262,506
La Arena
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	433,177	451,551
La Arena | Mineral Interests, Depletable
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	10,443
La Arena | Mineral Interests, Non-Depletable
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	216,910
La Arena | Property, plant and equipment
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	205,824
Shahuindo
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	527,825	482,685
Shahuindo | Mineral Interests, Depletable
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	295,513
Shahuindo | Mineral Interests, Non-Depletable
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	58,587
Shahuindo | Property, plant and equipment
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	173,725
Timmins mines
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	879,422	$ 836,829
Timmins mines | Mineral Interests, Depletable
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	307,349
Timmins mines | Mineral Interests, Non-Depletable
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	364,050
Timmins mines | Property, plant and equipment
Disclosure of detailed information about property, plant and equipment [line items]
Mineral interests, plant and equipment	$ 208,023

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MINERAL INTERESTS - Goodwill (Details) - Goodwill - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Changes in intangible assets and goodwill [abstract]
Beginning of period	$ 112,085	$ 57,468
Additions	0	54,617
End of period	112,085	112,085
La Arena Sulfides
Changes in intangible assets and goodwill [abstract]
Beginning of period	57,468	57,468
Additions	0	0
End of period	57,468	57,468
Timmins Exploration Potential
Changes in intangible assets and goodwill [abstract]
Beginning of period	54,617	0
Additions	0	54,617
End of period	$ 54,617	$ 54,617

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MINERAL INTERESTS - Cash Generating Segments (Details)	12 Months Ended
	Dec. 31, 2017 USD ($) $ / lb $ / oz cash_generating_unit	Dec. 31, 2016 $ / lb $ / oz
Disclosure of information for cash-generating units [line items]
Number of CGUs tested for impairment | cash_generating_unit	6
Cash flow projections, discount rate		6.50%
Impairment | $	$ 0
Gold
Disclosure of information for cash-generating units [line items]
Cash flow projection, long-term prices	1,307	1,250
Silver
Disclosure of information for cash-generating units [line items]
Cash flow projection, long-term prices	19.54	17.50
Copper
Disclosure of information for cash-generating units [line items]
Cash flow projection, long-term prices | $ / lb	3.30	3.00
Bottom of range
Disclosure of information for cash-generating units [line items]
Cash flow projections, discount rate	7.00%
Top of range
Disclosure of information for cash-generating units [line items]
Cash flow projections, discount rate	8.00%

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ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Trade and other payables [abstract]
Trade payables	$ 49,487	$ 70,315
Accrued trade and other payables	25,685	22,976
Royalties	16,000	15,044
Accrued payroll and related benefits	18,912	20,835
Accounts payable and accrued liabilities	$ 110,084	$ 129,170

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DEBT - Debt Activity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Borrowings [abstract]
Beginning balance at January 1	$ 35,000	$ 35,000
Borrowings/additions	0	35,000
Repayments	0	(35,000)
Ending balance at December 31	$ 35,000	$ 35,000

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DEBT - Debt Narrative(Details) - USD ($)			12 Months Ended
	Jul. 18, 2017	Apr. 08, 2016	Dec. 31, 2017	Dec. 31, 2016	Aug. 10, 2016
Loan
Disclosure of detailed information about borrowings [line items]
Repayments of loan facility		$ 35,000,000
Credit Facility
Disclosure of detailed information about borrowings [line items]
Debt term		2 years
Debt notional amount		$ 35,000,000
Credit Facility | LIBOR
Disclosure of detailed information about borrowings [line items]
Adjustment to interest rate		2.25%
Revolving Credit Facility
Disclosure of detailed information about borrowings [line items]
Maximum borrowing capacity	$ 300,000,000				$ 150,000,000
Maximum borrowing capacity, accordion feature	50,000,000
Payments of commitment fee	1,700,000
Undrawn portion of the facility, fee amount			$ 963,000	$ 886,000
Revolving Credit Facility | Bottom of range
Disclosure of detailed information about borrowings [line items]
Undrawn portion of the facility, fees percentage			0.56%
Revolving Credit Facility | Top of range
Disclosure of detailed information about borrowings [line items]
Undrawn portion of the facility, fees percentage			0.81%
Revolving Credit Facility | LIBOR | Bottom of range
Disclosure of detailed information about borrowings [line items]
Adjustment to interest rate					2.15%
Revolving Credit Facility | LIBOR | Top of range
Disclosure of detailed information about borrowings [line items]
Adjustment to interest rate					3.125%
Revolving Credit Facility | Base Rate | Bottom of range
Disclosure of detailed information about borrowings [line items]
Adjustment to interest rate					1.125%
Revolving Credit Facility | Base Rate | Top of range
Disclosure of detailed information about borrowings [line items]
Adjustment to interest rate					2.125%
CALAS Claim | Revolving Credit Facility
Disclosure of detailed information about borrowings [line items]
Maximum borrowing capacity	$ 75,000,000

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LEASE OBLIGATIONS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Apr. 01, 2016
Increase (Decrease) In Finance Lease Liabilities [Abstract]
Beginning balance at January 1	$ 15,946	$ 13,862
Additions	0	24,531
Payments	(9,456)	(22,468)
Accrued interest	451	559
Foreign exchange gain (loss)	813	(538)
Ending balance at December 31	7,754	15,946
Current finance lease liabilities			$ 6,146	$ 8,696
Non-current finance lease liabilities			1,608	7,250
Finance lease liabilities	15,946	13,862	$ 7,754	$ 15,946
Purchase of equipment from sale leaseback	224,089	$ 190,885
Lake Shore Gold finance lease
Increase (Decrease) In Finance Lease Liabilities [Abstract]
Additions	16,589
Lake Shore Gold finance lease | Bottom of range
Increase (Decrease) In Finance Lease Liabilities [Abstract]
Finance lease interest rate					0.90%
Lake Shore Gold finance lease | Top of range
Increase (Decrease) In Finance Lease Liabilities [Abstract]
Finance lease interest rate					6.90%
Other finance lease
Increase (Decrease) In Finance Lease Liabilities [Abstract]
Additions	7,942
La Ramada sale-leaseback
Increase (Decrease) In Finance Lease Liabilities [Abstract]
Payments	$ (10,420)

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RECLAMATION PROVISION (Details) - Reclamation Provision - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of changes in other provisions [abstract]
Beginning balance at January 1	$ 64,219	$ 39,524
Additions to reclamation provision	0	3,722
Accretion expense	2,640	2,370
Revisions in estimates and obligations	(3,803)	18,603
Ending balance at December 31	63,056	$ 64,219
Other current provisions	487
Other non-current provisions	$ 62,569

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RECLAMATION PROVISION - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Jan. 13, 2017
Reclamation Provision
Disclosure of other provisions [line items]
Undiscounted cash flows related to future reclamation obligations	$ 93,338,000	$ 99,273,000
Revisions in estimates and obligations	3,803,000	(18,603,000)
Escobal | Reclamation Provision
Disclosure of other provisions [line items]
Undiscounted cash flows related to future reclamation obligations	$ 10,306,000	$ 10,960,000
Present value of future reclamation obligations, assumed discount rate	6.18%	6.12%
Present value of future reclamation obligations, assumed inflation rate	4.12%	4.25%
Expected timing of outflows	16 years
La Arena | Reclamation Provision
Disclosure of other provisions [line items]
Undiscounted cash flows related to future reclamation obligations	$ 43,737,000	$ 45,885,000
Present value of future reclamation obligations, assumed discount rate	3.89%	4.18%
Present value of future reclamation obligations, assumed inflation rate	2.61%	3.22%
Expected timing of outflows	5 years
Letter of credit outstanding	$ 12,531,000		$ 13,297,000
Letter of credit term	1 year
Shahuindo
Disclosure of other provisions [line items]
Expected timing of outflows	7 years
Shahuindo | Reclamation Provision
Disclosure of other provisions [line items]
Undiscounted cash flows related to future reclamation obligations	$ 22,742,000	$ 32,124,000
Present value of future reclamation obligations, assumed discount rate	4.03%	4.51%
Present value of future reclamation obligations, assumed inflation rate	2.61%	3.22%
Letter of credit outstanding	$ 5,000		$ 10,390,000
Letter of credit term	1 year
Timmins mines | Reclamation Provision
Disclosure of other provisions [line items]
Undiscounted cash flows related to future reclamation obligations	$ 16,242,000	$ 10,000
Present value of future reclamation obligations, assumed discount rate	2.06%	4.85%
Present value of future reclamation obligations, assumed inflation rate	1.31%	1.29%
Expected timing of outflows	9 years
Financial assets pledged as collateral for liabilities or contingent liabilities	$ 9,495,000

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REVENUES - Revenue by Mineral (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenue [abstract]
Silver	$ 170,529	$ 316,793
Gold	542,702	437,464
Lead	7,274	9,738
Zinc	13,052	20,508
Revenues	$ 733,557	$ 784,503

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REVENUES - Major Customers (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Concentrate Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	100.00%	100.00%
Dore Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	100.00%	100.00%
Dore Total Gold Sales
Disclosure of major customers [line items]
Percentage of entity's revenue	99.00%	98.00%
Customer 1 | Concentrate Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	18.00%	34.00%
Customer 1 | Dore Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	43.00%	60.00%
Customer 2 | Concentrate Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	40.00%	24.00%
Customer 2 | Dore Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	26.00%	32.00%
Customer 3 | Concentrate Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	13.00%	23.00%
Customer 4 | Concentrate Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	27.00%	18.00%
Other customers | Concentrate Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	2.00%	1.00%
Other customers | Dore Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	31.00%	8.00%
Top Four Customers | Concentrate Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	98.00%	99.00%
Top Two Customers | Dore Revenues
Disclosure of major customers [line items]
Percentage of entity's revenue	69.00%	92.00%

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PRODUCTION COSTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Analysis of income and expense [abstract]
Raw materials and consumables	$ 130,185	$ 163,304
Salaries and benefits	90,583	85,349
Contractors and outside services	102,064	100,557
Other expenses	19,808	1,717
Changes in inventory	5,506	(18,206)
Production costs	$ 348,146	$ 332,721

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CARE AND MAINTENANCE COSTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Care And Maintenance Costs [Abstract]
Raw materials and consumables	$ 4,094	$ 0
Salaries and benefits	11,499	0
Contractors and outside services	8,115	0
Other expenses	1,147	0
Care and maintenance costs	$ 24,855	$ 0

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GENERAL AND ADMINISTRATIVE EXPENSES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Analysis of income and expense [abstract]
Salaries and benefits	$ 18,318	$ 12,934
Share-based payments	5,657	7,224
Consulting and professional fees	9,028	8,340
Transaction costs	0	11,134
Administrative and other	12,785	7,875
General and administrative	$ 45,788	$ 47,507

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SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION - Share Options (Details)	12 Months Ended
	Dec. 31, 2017 CAD shares	Dec. 31, 2016 CAD shares
Disclosure of terms and conditions of share-based payment arrangement [line items]
Weighted average exercise price outstanding beginning of period (CAD/share) | CAD	CAD 14.55	CAD 14.92
Weighted average exercise price granted (CAD/share) | CAD	9.91	9.29
Weighted average exercise price exercised (CAD/share) | CAD	10.82	9.13
Weighted average exercise price forfeited (CAD/share) | CAD	13.68	13.82
Weighted average exercise price expired (CAD/share) | CAD	17.37	16.57
Weighted average exercise price outstanding end of period (CAD/share) | CAD	CAD 12.79	CAD 14.55
Number of Share Options outstanding beginning of period | shares	3,211,745	4,068,457
Number of Share Options granted | shares	1,407,000	2,972,876
Number of Share Options exercised | shares	(112,136)	(2,819,838)
Number of Share Options forfeited | shares	(307,000)	(335,000)
Number of Share Options expired | shares	(332,584)	(674,750)
Number of Share Options outstanding end of period | shares	3,867,025	3,211,745
Share option
Disclosure of terms and conditions of share-based payment arrangement [line items]
Vesting period	3 years

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SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION - Exercise Price Range (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) shares year	Dec. 31, 2016 USD ($) shares	Dec. 31, 2017 CAD shares year	Dec. 31, 2016 CAD shares	Dec. 31, 2015 CAD shares
Disclosure of range of exercise prices of outstanding share options [line items]
Outstanding (in shares) | shares			3,867,025	3,211,745	4,068,457
Outstanding, weighted average exercise price (CAD/share)			CAD 12.79	CAD 14.55	CAD 14.92
Outstanding, weighted average remaining life (years) | year			2.86
Exercisable (in shares) | shares			1,602,358
Exercisable, weighted average exercise price (CAD/share)			CAD 14.48
Exercisable, weighted average remaining life (years) | year	1.71
Number of Share Options exercised | shares	112,136	2,819,838
Proceeds from issuance of common shares on exercise of share options | $	$ 914	$ 19,790
Share-based payments | $	5,657	7,224
Share option
Disclosure of range of exercise prices of outstanding share options [line items]
Share-based payments | $	$ 2,863	$ 3,120
$ 2.80-9.67
Disclosure of range of exercise prices of outstanding share options [line items]
Outstanding (in shares) | shares			235,970
Outstanding, weighted average exercise price (CAD/share)			CAD 7.68
Outstanding, weighted average remaining life (years) | year			2.15
Exercisable (in shares) | shares			163,970
Exercisable, weighted average exercise price (CAD/share)			CAD 7.99
Exercisable, weighted average remaining life (years) | year	1.06
$ 2.80-9.67 | Bottom of range
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price range (CAD/share)			2.80
$ 2.80-9.67 | Top of range
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price range (CAD/share)			CAD 9.67
$ 9.68-10.59
Disclosure of range of exercise prices of outstanding share options [line items]
Outstanding (in shares) | shares			1,143,000
Outstanding, weighted average exercise price (CAD/share)			CAD 10.00
Outstanding, weighted average remaining life (years) | year			4.20
Exercisable (in shares) | shares			0
Exercisable, weighted average exercise price (CAD/share)			CAD 0.00
Exercisable, weighted average remaining life (years) | year	0.00
$ 9.68-10.59 | Bottom of range
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price range (CAD/share)			9.68
$ 9.68-10.59 | Top of range
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price range (CAD/share)			CAD 10.59
$ 10.60-12.56
Disclosure of range of exercise prices of outstanding share options [line items]
Outstanding (in shares) | shares			1,001,000
Outstanding, weighted average exercise price (CAD/share)			CAD 12.35
Outstanding, weighted average remaining life (years) | year			3.22
Exercisable (in shares) | shares			326,333
Exercisable, weighted average exercise price (CAD/share)			CAD 12.38
Exercisable, weighted average remaining life (years) | year	3.19
$ 10.60-12.56 | Bottom of range
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price range (CAD/share)			10.60
$ 10.60-12.56 | Top of range
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price range (CAD/share)			CAD 12.56
$ 12.57-15.74
Disclosure of range of exercise prices of outstanding share options [line items]
Outstanding (in shares) | shares			896,055
Outstanding, weighted average exercise price (CAD/share)			CAD 15.17
Outstanding, weighted average remaining life (years) | year			2.32
Exercisable (in shares) | shares			592,055
Exercisable, weighted average exercise price (CAD/share)			CAD 15.13
Exercisable, weighted average remaining life (years) | year	2.22
$ 12.57-15.74 | Bottom of range
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price range (CAD/share)			12.57
$ 12.57-15.74 | Top of range
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price range (CAD/share)			CAD 15.74
$ 15.75-23.37
Disclosure of range of exercise prices of outstanding share options [line items]
Outstanding (in shares) | shares			591,000
Outstanding, weighted average exercise price (CAD/share)			CAD 17.37
Outstanding, weighted average remaining life (years) | year			0.78
Exercisable (in shares) | shares			520,000
Exercisable, weighted average exercise price (CAD/share)			CAD 17.10
Exercisable, weighted average remaining life (years) | year	0.41
$ 15.75-23.37 | Bottom of range
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price range (CAD/share)			15.75
$ 15.75-23.37 | Top of range
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price range (CAD/share)			CAD 23.37

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SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION - DSA and RSA (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($) shares
Disclosure of terms and conditions of share-based payment arrangement [line items]
Share-based payments | $	$ 5,657	$ 7,224
DSAs
Disclosure of terms and conditions of share-based payment arrangement [line items]
Vesting period	3 years
Outstanding, beginning of period (in shares)	463,000	350,000
Granted (in shares)	195,000	342,000
Shares issued (in shares)	(215,000)	(184,000)
Cancelled/forfeited (in shares)	(26,000)	(45,000)
Outstanding, end of period (in shares)	417,000	463,000
Share-based payments | $	$ 2,138	$ 2,909
RSAs
Disclosure of terms and conditions of share-based payment arrangement [line items]
Granted (in shares)	75,750	60,000
Share-based payments | $	$ 655	$ 787

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SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION - SARS (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($) shares	Dec. 31, 2017 CAD / shares	Dec. 31, 2016 CAD / shares
Disclosure of terms and conditions of share-based payment arrangement [line items]
Share-based payments | $	$ 5,657	$ 7,224
SARs
Disclosure of terms and conditions of share-based payment arrangement [line items]
Vesting period	5 years
Outstanding, beginning of period (in shares)	154,000	43,000
Issued (in shares)	0	135,000
Exercised (in shares)	(2,000)	(23,000)
Expired/forfeited (in shares)	(26,500)	(1,000)
Outstanding, end of period (in shares)	125,500	154,000
Exercisable (in shares)	0	12,000
Vested weighted average intrinsic value (CAD/share) | CAD / shares			CAD (9.88)	CAD (4.08)
Current liabilities for SARS | $	$ 32	$ 165
Non-current liabilities for SARs | $	44	101
Share-based payments | $	$ (174)	$ 408

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SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION - SARS Exercise Price Range (Details)	Dec. 31, 2017 CAD shares	Dec. 31, 2016 shares	Dec. 31, 2015 shares
Disclosure of terms and conditions of share-based payment arrangement [line items]
Issued (in shares)	574,500
Exercised/Cancelled (in shares)	(446,000)
$6.40-12.87
Disclosure of terms and conditions of share-based payment arrangement [line items]
Issued (in shares)	407,000
Exercised/Cancelled (in shares)	(301,500)
Outstanding (in shares)	105,500
Exercisable (in shares)	0
$13.35-16.57
Disclosure of terms and conditions of share-based payment arrangement [line items]
Issued (in shares)	60,000
Exercised/Cancelled (in shares)	(60,000)
Outstanding (in shares)	0
Exercisable (in shares)	0
$18.00-23.31
Disclosure of terms and conditions of share-based payment arrangement [line items]
Issued (in shares)	107,500
Exercised/Cancelled (in shares)	(84,500)
Outstanding (in shares)	20,000
Exercisable (in shares)	0
SARs
Disclosure of terms and conditions of share-based payment arrangement [line items]
Outstanding (in shares)	125,500	154,000	43,000
Exercisable (in shares)	0	12,000
SARs | $6.40-12.87 | Bottom of range
Disclosure of terms and conditions of share-based payment arrangement [line items]
Grant price range (CAD/share) | CAD	CAD 6.40
SARs | $6.40-12.87 | Top of range
Disclosure of terms and conditions of share-based payment arrangement [line items]
Grant price range (CAD/share) | CAD	12.87
SARs | $13.35-16.57 | Bottom of range
Disclosure of terms and conditions of share-based payment arrangement [line items]
Grant price range (CAD/share) | CAD	13.35
SARs | $13.35-16.57 | Top of range
Disclosure of terms and conditions of share-based payment arrangement [line items]
Grant price range (CAD/share) | CAD	16.57
SARs | $18.00-23.31 | Bottom of range
Disclosure of terms and conditions of share-based payment arrangement [line items]
Grant price range (CAD/share) | CAD	18.00
SARs | $18.00-23.31 | Top of range
Disclosure of terms and conditions of share-based payment arrangement [line items]
Grant price range (CAD/share) | CAD	CAD 23.31

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SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION - Inputs For Measurement of Fair Values Share Options (Details)		12 Months Ended
	Apr. 01, 2016 CAD	Dec. 31, 2017 CAD shares year	Dec. 31, 2016 CAD shares year	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of Share Options granted | shares		1,407,000	2,972,876
Share price (CAD/share)		CAD 9.64	CAD 13.21
Exercise price (CAD per share)		CAD 9.91	CAD 9.51
Expected volatility		51.00%	51.00%
Expected life (years) | year		3.50	3.00
Expected dividend yield		3.14%	2.42%
Risk-free interest rate		1.07%	0.57%
Pre-vest forfeiture rate		7.13%	4.12%
Fair Value (CAD per Share) | $				$ 2.89	$ 5.76
Lake Shore Gold Corp.
Disclosure of terms and conditions of share-based payment arrangement [line items]
Share price (CAD/share)	CAD 12.75
Expected dividend yield	2.46%
Rio Alto
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of Share Options granted | shares			1,621,877

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SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION - Inputs For Measurement of Fair Values SARS (Details) - SARs	12 Months Ended
	Dec. 31, 2017 CAD shares year	Dec. 31, 2016 CAD shares year
Disclosure of terms and conditions of share-based payment arrangement [line items]
Granted (in shares) | shares	0	135,000
Indirect Measurement Of Fair Value Of Goods Or Services Received, Other Equity Instruments Granted During Period [Abstract]
Share price (CAD/share)	CAD 0.00	CAD 12.64
Exercise price (CAD/share)	CAD 0.00	CAD 12.38
Expected volatility	0.00%	52.00%
Expected life (years) | year	0.00	5.00
Risk-free interest rate	0.00%	0.61%
Fair value (CAD/share)	CAD 0.00	CAD 5.74
Indirect Measurement Of Fair Value Of Goods Or Services Received, Other Equity Instruments Granted During Period, Modified [Abstract]
Share price (CAD/share)	6.03	12.65
Exercise price (CAD/share)	CAD 14.12	CAD 14.05
Expected volatility	55.00%	50.00%
Expected life (years) | year	2.92	3.80
Risk-free interest rate	1.81%	1.02%
Fair value (CAD/share)	CAD 0.99	CAD 4.60

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SHARE-BASED PAYMENTS AND OTHER RELATED INFORMATION - Authorized share capital (Details) - shares	Dec. 31, 2017	Dec. 31, 2016	Apr. 01, 2015
Share-based Payment Arrangements [Abstract]
Number of shares issued	311,362,031	227,401,681
Number of shares outstanding	312,775,761	311,362,031	223,726,156

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INCOME TAX EXPENSE - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Current income tax expense
Current period	$ 42,455	$ 69,832
Prior period	(55)	822
Current income tax expense	42,400	70,654
Deferred tax expense (benefit)
Origination and reversal of temporary differences	(4,366)	20,202
Income tax expense	$ 38,034	$ 90,856

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INCOME TAX EXPENSE - Income Tax Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Taxes [Abstract]
Earnings (loss) before income taxes	$ 119,828	$ 208,732
Statutory tax rate	26.00%	26.00%
Income tax expense (benefit)	$ 31,155	$ 54,270
Reconciling items:
Difference between statutory and foreign tax rates	2,978	9,127
Non-deductible share-based payments	1,843	2,741
Impact of foreign exchange on deferred income tax assets and liabilities	(4,589)	(3,080)
Non-deductible expenses	6,312	22,363
Change in unrecognized deferred tax assets	(219)	(2,758)
Other	554	8,193
Income tax expense	$ 38,034	$ 90,856

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INCOME TAX EXPENSE - Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	$ 369	$ 1,994
Deferred tax liability	(230,184)	(236,175)
Net deferred income tax liabilities	(229,815)	(234,181)
Before Offset Amount
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	59,864	77,365
Deferred tax liability	(289,679)	(311,546)
Unused non-capital losses | Before Offset Amount
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	38,140	39,704
Reclamation and closure cost obligations | Before Offset Amount
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	12,917	13,019
Other | Before Offset Amount
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	8,438	22,648
Mining interests | Before Offset Amount
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax liability	(286,214)	(310,028)
Inventories and receivables | Before Offset Amount
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	369	1,994
Deferred tax liability	$ (3,465)	$ (1,518)

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INCOME TAX EXPENSE - Tax Losses and Tax Credits (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unused tax losses	$ 271,928	$ 270,730
Unused tax losses with deferred tax asset recognized	142,175	147,891
Deductible temporary differences	172,383	169,977
Tax losses and tax credits
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deductible temporary differences	147,427	140,695
Cumulative eligible capital
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deductible temporary differences	568	611
Financing costs
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deductible temporary differences	803	1,937
Unrealized capital losses
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deductible temporary differences	0	325
Reclamation and closure cost obligations
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deductible temporary differences	$ 23,585	$ 26,409

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EARNINGS (LOSS) PER SHARE - Dilutive effect on basic EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Earnings per share [abstract]
Basic earnings (loss)	$ 81,793	$ 117,876
Dilutive earnings (loss)	$ 81,793	$ 117,876
Basic (in shares)	312,804,323	289,726,501
Dilutive effect of share options on number of ordinary shares (in shares)	29,177	261,545
Dilutive weighted average number of ordinary shares outstanding (in shares)	312,833,500	289,988,046
Basic earnings per share (in dollars per share)	$ 0.26	$ 0.41
Diluted earnings per share (in dollars per share)	$ 0.26	$ 0.41

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EARNINGS (LOSS) PER SHARE - Narrative (Details) $ / shares in Units, $ in Thousands		12 Months Ended
	Apr. 01, 2016 CAD	Dec. 31, 2017 USD ($) shares $ / shares	Dec. 31, 2017 CAD shares	Dec. 31, 2016 USD ($) shares	Dec. 31, 2016 CAD shares	Dec. 31, 2015 shares
Earnings per share [line items]
Number of share options outstanding in share-based payment arrangement		3,867,025	3,867,025	3,211,745	3,211,745	4,068,457
Weighted average share price (in CAD per share) | CAD	CAD 12.75		CAD 9.00		CAD 15.46
Dividends paid per common share (in dollars per share) | $ / shares		$ 0.02
Dividends paid to shareholders | $		$ 35,697		$ 67,044
Share-based dividends | $		$ 7,989		$ 2,358
Dividends paid to shareholders (in shares)		1,010,844	1,010,844
Stock options
Earnings per share [line items]
Antidilutive securities excluded from computation of earnings per share, amount		3,653,081	3,653,081	1,638,828	1,638,828
DSAs
Earnings per share [line items]
Antidilutive securities excluded from computation of earnings per share, amount		0	0	0	0
DSAs
Earnings per share [line items]
Dilutive effect of convertible instruments on number of ordinary shares		417,000	417,000	463,000	463,000
Number of other equity instruments outstanding in share-based payment arrangement		417,000	417,000	463,000	463,000	350,000
Deficit
Earnings per share [line items]
Dividends paid to shareholders | $		$ 43,686		$ 69,402

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SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Cash Flow Statement [Abstract]
Trade and other receivables	$ 33,302	$ (16,482)
Inventories	5,722	(38,024)
Other current assets	(535)	1,474
Other non-current assets	(11,541)	2,619
Accounts payable and accrued liabilities, and other non-current liabilities	(18,705)	(17,143)
Changes in working capital	$ 8,243	$ (67,556)

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SEGMENTED INFORMATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of operating segments [line items]
Mineral interests, plant and equipment	$ 2,616,789	$ 2,556,953
Goodwill	112,085	112,085
Total Assets	3,080,638	3,071,253
Total liabilities	455,750	499,099
Revenues	733,557	784,503
Production costs	348,146	332,721
Royalties	15,570	22,913
Care and maintenance	24,855	0
Depreciation and depletion	153,016	124,744
Mine operating earnings	191,970	304,125
Capital expenditures	$ 223,047	211,108
Royalties acquired, percent	2.00%
Payments to acquire royalties	$ 13,676
Escobal
Disclosure of operating segments [line items]
Mineral interests, plant and equipment	776,365	785,888
La Arena
Disclosure of operating segments [line items]
Mineral interests, plant and equipment	433,177	451,551
Shahuindo
Disclosure of operating segments [line items]
Mineral interests, plant and equipment	527,825	482,685
Timmins mines
Disclosure of operating segments [line items]
Mineral interests, plant and equipment	879,422	836,829
Operating segments | Escobal
Disclosure of operating segments [line items]
Mineral interests, plant and equipment	776,364	785,888
Goodwill	0	0
Total Assets	906,434	963,824
Total liabilities	(81,208)	(27,225)
Revenues	192,510	355,812
Production costs	61,934	128,552
Royalties	10,521	18,741
Care and maintenance	24,855
Depreciation and depletion	32,858	53,204
Mine operating earnings	62,342	155,315
Capital expenditures	22,901	30,077
Operating segments | La Arena
Disclosure of operating segments [line items]
Mineral interests, plant and equipment	433,178	451,551
Goodwill	57,468	57,468
Total Assets	573,566	611,344
Total liabilities	(160,979)	71,490
Revenues	233,782	244,397
Production costs	126,376	115,229
Royalties	0	0
Care and maintenance	0
Depreciation and depletion	48,092	27,779
Mine operating earnings	59,314	101,389
Capital expenditures	32,019	35,366
Operating segments | Shahuindo
Disclosure of operating segments [line items]
Mineral interests, plant and equipment	527,826	482,685
Goodwill	0	0
Total Assets	621,985	547,153
Total liabilities	539,512	319,432
Revenues	95,425	47,174
Production costs	53,861	25,118
Royalties	0	0
Care and maintenance	0
Depreciation and depletion	11,452	10,016
Mine operating earnings	30,112	12,040
Capital expenditures	69,352	63,893
Operating segments | Timmins mines
Disclosure of operating segments [line items]
Mineral interests, plant and equipment	879,421	836,829
Goodwill	54,617	54,617
Total Assets	978,653	948,932
Total liabilities	158,425	135,402
Revenues	211,840	137,120
Production costs	105,975	63,822
Royalties	5,049	4,172
Care and maintenance	0
Depreciation and depletion	60,614	33,745
Mine operating earnings	40,202	35,381
Capital expenditures	$ 98,775	$ 81,772

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items]
Assets	$ 3,080,638	$ 3,071,253
Liabilities	455,750	499,099
Level 1
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items]
Net assets	320	39
Level 2
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items]
Net assets	0	18,997
Level 3
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items]
Net assets	0	0
Investments | Level 1
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items]
Assets	320	39
Investments | Level 2
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items]
Assets	0	0
Investments | Level 3
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items]
Assets	0	0
Provisionally priced trade receivables | Level 1
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items]
Assets	0	0
Provisionally priced trade receivables | Level 2
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items]
Assets	$ 0	18,997
Provisionally priced trade receivables | Level 3
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items]
Assets

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FINANCIAL RISK MANAGEMENT - Liquidity Risk (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Apr. 01, 2016	Dec. 31, 2015
Derivative And Non-derivative Financial Liabilities [Abstract]
Cash flows from (used in) operating activities	$ 234,264	$ 249,454
Cash and cash equivalents	125,665	163,368		$ 108,667
Liquidity risk
Disclosure of maturity analysis for non-derivative financial liabilities [line items]
Undrawn borrowing facilities	300,000
Derivative And Non-derivative Financial Liabilities [Abstract]
Accounts payable and accrued liabilities	110,084	129,170
Debt	35,000	35,000
Income tax payable	2,277	10,733
Lease and contractual agreements	26,558	15,946
Commitments	70,931	123,481
Other non-current liabilities	5,559	24,917
Reclamation provision	93,338	99,273
Significant undiscounted commitments	343,747	438,520
Cash flows from (used in) operating activities	243,053	249,454
Cash and cash equivalents	125,665	163,368
Current assets (liabilities)	143	$ 209,006
Liquidity risk | 1 year
Derivative And Non-derivative Financial Liabilities [Abstract]
Accounts payable and accrued liabilities	110,084
Debt	35,000
Income tax payable	2,277
Lease and contractual agreements	23,087
Commitments	70,513
Other non-current liabilities	2,780
Reclamation provision	717
Significant undiscounted commitments	244,458
Liquidity risk | 2-5 years
Derivative And Non-derivative Financial Liabilities [Abstract]
Accounts payable and accrued liabilities	0
Debt	0
Income tax payable	0
Lease and contractual agreements	3,261
Commitments	418
Other non-current liabilities	2,779
Reclamation provision	19,261
Significant undiscounted commitments	25,719
Liquidity risk | 5 years
Derivative And Non-derivative Financial Liabilities [Abstract]
Accounts payable and accrued liabilities	0
Debt	0
Income tax payable	0
Lease and contractual agreements	210
Commitments	0
Other non-current liabilities	0
Reclamation provision	73,360
Significant undiscounted commitments	$ 73,570
Lake Shore Gold Corp.
Derivative And Non-derivative Financial Liabilities [Abstract]
Cash and cash equivalents recognized as of acquisition date			$ 70,187

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FINANCIAL RISK MANAGEMENT - Market Risk (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of nature and extent of risks arising from financial instruments [line items]
Deferred tax liability	$ 230,184,000	$ 236,175,000
Foreign exchange gain (loss)	(2,441,000)	$ (435,000)
Interest rate percentage		2.95%
Foreign exchange risk
Disclosure of nature and extent of risks arising from financial instruments [line items]
Deferred tax liability	$ 230,184,000
Sensitivity Analysis For Types Of Market Risk, Reasonably Possible Change In Risk Variable, Percent	10.00%
Foreign exchange gain (loss)	$ (2,441,000)	$ (435,000)
Interest rate risk
Disclosure of nature and extent of risks arising from financial instruments [line items]
Interest rate percentage	3.50%
Undrawn borrowing facilities	$ 0
Cash and cash equivalents | Foreign exchange risk
Disclosure of nature and extent of risks arising from financial instruments [line items]
Risk exposure associated with instruments sharing characteristic	7,214,000	24,611,000
Cash and cash equivalents | Foreign exchange risk | Guatemala, Quetzales
Disclosure of nature and extent of risks arising from financial instruments [line items]
Risk exposure associated with instruments sharing characteristic	1,011,000	564,000
Cash and cash equivalents | Foreign exchange risk | Peru, Nuevos Soles
Disclosure of nature and extent of risks arising from financial instruments [line items]
Risk exposure associated with instruments sharing characteristic	4,232,000	3,579,000
Cash and cash equivalents | Foreign exchange risk | Canada, Dollars
Disclosure of nature and extent of risks arising from financial instruments [line items]
Risk exposure associated with instruments sharing characteristic	1,971,000	20,386,000
Cash and cash equivalents | Foreign exchange risk | Other Currencies [Member]
Disclosure of nature and extent of risks arising from financial instruments [line items]
Risk exposure associated with instruments sharing characteristic	0	$ 82,000
Exposure On Deferred Tax Liabilities [Member] | Foreign exchange risk
Disclosure of nature and extent of risks arising from financial instruments [line items]
Sensitivity Analysis For Types Of Market Risk, Reasonably Possible Change In Risk Variable, Impact On Pre-Tax Earnings	16,395,000
Net Exposure | Foreign exchange risk
Disclosure of nature and extent of risks arising from financial instruments [line items]
Sensitivity Analysis For Types Of Market Risk, Reasonably Possible Change In Risk Variable, Impact On Pre-Tax Earnings	$ 6,728,000

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CAPITAL MANAGEMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Corporate Information And Statement Of IFRS Compliance [Abstract]
Shareholders’ equity	$ 2,624,888	$ 2,572,154	$ 1,664,031
Debt	35,000	35,000	35,000
Lease obligations	7,754	15,946	13,862
Equity and debt and finance leases	2,667,642	2,623,100
Cash and cash equivalents	(125,665)	(163,368)	$ (108,667)
Restricted cash	(5,124)	(4,672)
Equity and debt and finance leases, net of cash and cash equivalents and restricted cash	$ 2,536,853	$ 2,455,060

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CONTINGENCIES (Details)	Jul. 07, 2017 claim
Other Provisions, Contingent Liabilities And Contingent Assets [Abstract]
New claims filed, number of claims	3

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RELATED PARTIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Related Party [Abstract]
Short-term employee benefits	$ 8,804	$ 8,870
Share-based payments	5,163	5,948
Key management personnel compensation	$ 13,967	$ 14,818

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SUBSEQUENT EVENTS (Details) - USD ($)	Feb. 20, 2018	Dec. 31, 2017	Jul. 18, 2017	Aug. 10, 2016	Apr. 08, 2016
Revolving Credit Facility
Disclosure of non-adjusting events after reporting period [line items]
Maximum borrowing capacity, accordion feature			$ 50,000,000
Maximum borrowing capacity			$ 300,000,000	$ 150,000,000
Revolving Credit Facility | Subsequent Events
Disclosure of non-adjusting events after reporting period [line items]
Maximum borrowing capacity, before accordion feature	$ 175,000,000
Maximum borrowing capacity, accordion feature	25,000,000
Maximum borrowing capacity	200,000,000
Credit Facility | Subsequent Events
Disclosure of non-adjusting events after reporting period [line items]
Repayments of loan facility	$ 35,000,000
Top of range | Revolving Credit Facility
Disclosure of non-adjusting events after reporting period [line items]
Undrawn portion of the facility, fees percentage		0.81%
Top of range | Revolving Credit Facility | Subsequent Events
Disclosure of non-adjusting events after reporting period [line items]
Undrawn portion of the facility, fees percentage	0.7313%
Bottom of range | Revolving Credit Facility
Disclosure of non-adjusting events after reporting period [line items]
Undrawn portion of the facility, fees percentage		0.56%
Bottom of range | Revolving Credit Facility | Subsequent Events
Disclosure of non-adjusting events after reporting period [line items]
Undrawn portion of the facility, fees percentage	0.5063%
Base Rate | Top of range | Revolving Credit Facility
Disclosure of non-adjusting events after reporting period [line items]
Adjustment to interest rate				2.125%
Base Rate | Top of range | Revolving Credit Facility | Subsequent Events
Disclosure of non-adjusting events after reporting period [line items]
Adjustment to interest rate	2.25%
Base Rate | Bottom of range | Revolving Credit Facility
Disclosure of non-adjusting events after reporting period [line items]
Adjustment to interest rate				1.125%
Base Rate | Bottom of range | Revolving Credit Facility | Subsequent Events
Disclosure of non-adjusting events after reporting period [line items]
Adjustment to interest rate	1.25%
LIBOR | Credit Facility
Disclosure of non-adjusting events after reporting period [line items]
Adjustment to interest rate					2.25%
LIBOR | Top of range | Revolving Credit Facility
Disclosure of non-adjusting events after reporting period [line items]
Adjustment to interest rate				3.125%
LIBOR | Top of range | Revolving Credit Facility | Subsequent Events
Disclosure of non-adjusting events after reporting period [line items]
Adjustment to interest rate	3.25%
LIBOR | Bottom of range | Revolving Credit Facility
Disclosure of non-adjusting events after reporting period [line items]
Adjustment to interest rate				2.15%
LIBOR | Bottom of range | Revolving Credit Facility | Subsequent Events
Disclosure of non-adjusting events after reporting period [line items]
Adjustment to interest rate	2.25%