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GREAT PANTHER SILVER LIMITED
(TSX: GPR)(NYSE MKT: GPL) (“Great Panther”; the “Company”)
today reported financial results for the Company’s three months ended March
31, 2014
. The full version of the Company’s unaudited condensed interim
consolidated financial statements, and Management’s Discussion and Analysis
(“MD&A”) can be viewed on the Company’s website at www.greatpanther.com, or SEDAR at www.sedar.com. All financial information is
prepared in accordance with IFRS and all dollar amounts are expressed in
Canadian dollars unless otherwise indicated.

“Compared to the first
quarter of 2013, Great Panther achieved 10% production growth, significant
reductions in cash costs, and a modest increase in revenues despite
significantly lower metal prices,” stated Robert Archer ,
President and CEO. “That said, our results were impacted by incursions of
illegal miners throughout the quarter, the illegal occupation of our facilities
at Guanajuato in
March, and lower grades at Guanajuato.”

“While I am extremely
grateful for the support and resilience of our employees and contractors during
this difficult period, we recognize there is still more work to do to bring the
operations at Guanajuato
back to an optimal state. We continued to have challenges with grades at Guanajuato
in April, which will impact the financial results of the second quarter, but we
expect operational results to markedly improve for the remainder of the year as
we return to proper mine sequencing and better grades at Guanajuato.
San Ignacio is
on track to commence production in this quarter as planned, and we are
maintaining our guidance for overall growth in 2014.”

FIRST QUARTER 2014 FINANCIAL AND
OPERATIONAL SUMMARY

Highlights
(in 000s except
ounces, amounts per share and per ounce)

Q1
2014

Q1
2013

Change

Revenue

$

12,880

$

12,639

2%

Gross profit (loss) (Earnings from
mining operations)

$

(418)

$

313

(234%)

Net income (loss)

$

(602)

$

1,276

(147%)

Adjusted EBITDA(1)

$

(545)

$

521

(204%)

Operating cash-flow before changes
in non-cash working capital

$

613

$

229

168%

Earnings (loss) per share – basic

$

(0.00)

$

0.01

(100%)

Earnings (loss) per share –
diluted

$

(0.00)

$

0.01

(100%)

Silver ounces produced

370,668

369,624

0%

Silver equivalent ounces produced
(2)

667,349

607,501

10%

Silver payable ounces

352,287

339,874

4%

Average realized silver price
(USD) (3)

$

20.22

$

29.71

(32%)

Cash cost per silver payable ounce
(USD) 1

$

13.40

$

18.60

(28%)

All-in sustaining cost per silver
payable ounce (“AISC”) (USD)1

$

24.06

$

36.84

(35%)

All-in cost per silver payable
ounce (“AIC”) (USD) 1

$

27.66

$

37.59

(26%)

Ending cash position

$

21,660

$

20,484

6%

Net working capital

$

36,886

$

42,203

(13%)

First Quarter 2014
Financial and Operational Highlights (Compared to First Quarter 2013 unless
otherwise noted)

  • Throughput
    totalled 72,631 tonnes, a 4% increase;
  • Processing
    at Guanajuato
    included 8,037 tonnes of development ore from San
    Ignacio
    ;
  • Metal
    production of 667,349 silver equivalent ounces (“Ag eq oz”)
    increased 10% and included 52,477 Ag eq oz from San
    Ignacio
    ;
  • Gold
    production increased 17% to 3,665 ounces while silver remained steady at
    370,668 ounces;
  • Cash
    cost per silver payable ounce (“cash cost”) decreased 28% to US $13.40;
  • Cash
    cost per silver payable ounce decreased 30% to US $12.06 at
    Guanajuato and
    decreased 26% to US $15.19 at Topia;
  • All-in
    sustaining cost (“AISC”) and All-in cost (“AIC”) per
    silver payable ounce decreased 35% and 26%, to US $24.06
    and US $27.66, respectively;
  • Revenues
    totalled $12.9 million, an increase of 2% despite
    significantly lower average metal prices;
  • Net loss
    was $0.6 million compared to net income of $1.3
    million
    ;
  • Adjusted
    EBITDA was negative $0.5 million compared to $0.5 million;
  • Operating
    cash-flow before changes in non-cash working capital increased 168%;
  • Cash and
    cash equivalents were $21.7 million compared to $21.8
    million
    at December 31, 2013; and
  • Net
    working capital decreased to $36.9 million from $38.2
    million
    at December 31, 2013.

DISCUSSION OF FIRST
QUARTER 2014 FINANCIAL RESULTS

For the three months ended March
31, 2014
, the Company earned revenues of $12.9 million
compared to $12.6 million for the same period of 2013, an
increase of 2%. The increase was the result of an 11% increase in metal sales
on a silver equivalent ounce basis and the appreciation of the USD against the
CAD which had the effect of increasing revenue reported in CAD by 12%. These
factors offset a 32% decline in the average realized silver price in USD terms
and a similar decline in the gold price.

Cost of sales before
non-cash items of $9.6 million (75% of revenue) for the three
months ended March 31, 2014 was consistent with $9.5
million
(75% of revenue) for the same period in 2013. Cost of sales did
not increase despite an 11% increase in metal sales on a silver equivalent
ounce basis due to a reduction in unit production costs.

Gross profit before
non-cash items increased 5% to $3.3 million in the first quarter
of 2014 compared to the first quarter of 2013. The increase is the result of an
increase in metal sales on a silver equivalent ounce basis and lower unit
production costs which together offset the impact of lower realized metal
prices.

Amortization and depletion
of mineral properties, plant and equipment relating to cost of sales for the
three months ended March 31, 2014 was $3.6 million
compared to $2.7 million for the same period in 2013. The
increase in amortization and depletion expense is due to a reduction of the
Measured and Indicated (“M&I”) resource at Guanajuato,
based on the updated NI 43-101 Resource report issued in December 2013,
and the increase in sales on a silver equivalent ounce basis. The reduction of
the resource has the effect of shortening the amortization period and therefore
increasing the amortization expense per unit produced and sold.

Gross loss for the first
quarter of 2014 was $0.4 million compared to gross profit of $0.3
million
for the first quarter of 2013. The primary reason for the
change was an increase in non-cash amortization and depletion of $0.7
million
.

General and administrative
expenses were $1.6 million for the three months ended March
31, 2014
compared to $2.0 million for the same period in
2013. The decrease reflects the impact of cost reductions initiated late in the
second quarter of 2013.

Exploration and evaluation,
and development expenses were $1.6 million for the three months
ended March 31, 2014 compared to $0.6 million for
the same period in 2013. The increase is primarily due to San
Ignacio
development expenditures of $1.2 million
which are being expensed as these did not meet the criteria for capitalization
under IFRS. The Company made the decision to begin development based on
internal economic assessments and expects to begin production in the second
quarter of 2014.

Finance and other income
was $3.2 million for the quarter ended March 31, 2014,
compared to $4.4 million for the same period in 2013. The
decrease is primarily attributed to a $0.5 million decrease in
foreign exchange gains and $0.7 million in losses and
expenditures associated with the illegal occupation of the Guanajuato
mine, including the theft of concentrate worth $0.4 million.

A foreign currency gain of $3.8
million
was recognized in the first quarter of 2014, compared to a
foreign currency gain of $4.3 million for the first quarter of
2013. The gains are the result of the depreciation of the Canadian dollar
against the Mexican peso and US dollar against the Canadian dollar.

The Company recorded an
income tax expense of $26,000 for the three months ended March
31, 2014
despite a loss before income tax due to new tax duties which
take effect in 2014 under the Mexican reform taxes. These new taxes were
partially offset by recoveries related to pre-tax losses incurred by the
Company’s operations in Mexico.
This compares to a $0.8 million expense in the same period in
2013 when the Company reported income before tax. During the first quarter of
2014, $0.2 million and $0.1 million of Special
and Extraordinary duties respectively were recorded in the income statement and
accrued for payment in March 2015. The Company has net operating
tax losses in Canada
and has not recognized the benefit of any of these losses in the financial
statements of the Company.

The net loss for the
quarter ended March 31, 2014 was $0.6 million
compared to net income of $1.3 million in the comparative
quarter of 2013. Reasons for the increase in net loss include the development
expenditures related to San
Ignacio
, and the additional losses and expenditures related to the
illegal occupation of the Guanajuato
plant and office premises. These factors were partly offset by lower general
and administrative expenses, and a decrease in tax expense.

Adjusted EBITDA was negative
$0.5
million for the three months ended March 31, 2014,
compared to adjusted EBITDA of $0.5 million for the same period
in 2013. The decrease in EBITDA primarily reflects the development expenditures
made at San Ignacio,
and the additional expenditures associated with the illegal occupation of the Guanajuato
facilities.

CASH COST AND
ALL-IN COSTS

Cash cost per silver
payable ounce (“cash cost”) of US $13.40 for the first
quarter of 2014 decreased from US $18.60 in the first quarter of
2013, as declines in cash cost were realized at both Guanajuato
and Topia. The improvement in cash cost is attributable to the cost reduction
initiatives which reduced site costs per tonne, higher by-product credits from
increased gold production at Guanajuato,
improved silver grades at Topia, and a decrease in smelting and refining
charges.

All-in sustaining cost per
silver payable ounce (“AISC”) for the first quarter of 2014 decreased
to US $24.06 from US $36.84 in the first quarter
of 2013. The decrease is the result of the decrease in cash costs, sustaining
capital expenditures and general and administrative expenditures as a result of
cost reduction programs initiated in the second quarter of 2013.

All-in cost per silver
payable ounce (“AIC”) for the first quarter of 2014 decreased to US $27.66
from US $37.59 in the first quarter of 2013 as a result of the
same factors which reduced AISC.

Please refer to the
Company’s Management’s Discussion and Analysis for further discussion of cash
cost, AISC and AIC and for a reconciliation to the Company’s financial results
as reported under IFRS.

CASH AND WORKING
CAPITAL AT MARCH 31, 2014

At March 31, 2014,
the Company had cash and cash equivalents of $21.7 million
compared to $21.8 million (including short-term investments) at December
31, 2013
.

At March 31, 2014,
the Company had working capital of $36.9 million compared to net
working capital of $38.2 million at December 31, 2013.
Working capital decreased by $1.3 million due to a comprehensive
loss in the period of $1.0 million, an increase in non-current
assets of $0.8 million primarily reflecting investments in
capital equipment and mine development and capitalized exploration activities.

OUTLOOK

The Company is maintaining
its 2014 guidance despite the challenges faced in the first quarter of 2014. At
this time, the Company expects that the second quarter will reflect the impact
of resuming normal operations at Guanajuato
after the illegal occupation in March and continued grade challenges at the
mine in April, some of which is associated with preparation necessary to return
the higher grade Guanajuato
zones to normal operation. A return to operations more closely reflecting the
results in the fourth quarter of 2013 and the start of production at San
Ignacio
are expected to put the Company on track for meeting its
guidance.

2014 Production and cash cost
guidance

Year
to date

March 31, 2014

2013
Actual

2014
Guidance range

Total silver equivalent ounces

667,349

2,840,844

3,100,000
– 3,200,000

Cash cost per silver payable ounce
(USD)(4)

$

13.40

$

13.45

$

11.00
– $ 12.00

AIC (USD)1

$

27.66

$

27.44

$

20.00
– $ 21.00

AISC (USD)1

$

24.06

$

26.26

$

17.50
– $ 19.50

Overall metal production
for 2014 is expected to increase gradually through the year as the San
Ignacio
mine and mill feed comes on stream. The project is expected
to commence production in the second quarter of 2014 at a rate of about 100
tonnes per day, ramping up to approximately 250 tonnes per day by year-end, and
will complement the steady stream of production from the main Guanajuato
Mine Complex
and the Topia Mine.

The Company expects to
invest approximately $10 to $13 million in capital expenditures
in 2014. These investments include the development of the San Ignacio
Project
, continued mine development and diamond drilling at both Guanajuato
and Topia, rehabilitation of the Cata Shaft at Guanajuato,
and the acquisition of new mining and plant equipment to drive efficiencies and
reduce production costs in the future.

The Company also plans to
perform approximately 16,500 metres of exploration drilling in 2014 to further
define resources, look for vein extensions, and test new targets. Planned
drilling for the year consists of 11,000 metres at Guanajuato,
3,500 metres at San Ignacio
and 2,000 metres at Topia.

WEBCAST AND
CONFERENCE CALL TO DISCUSS FISCAL YEAR 2013 FINANCIAL RESULTS

The Company will hold a
live webcast and conference call to discuss the financial results on May
8, 2014
, at 7:00 AM Pacific Daylight Time, 10:00
AM Eastern Daylight Time
. Hosting the call will be Mr. Robert
Archer
, President and CEO, and Mr. Jim Zadra , CFO
and Corporate Secretary.

Shareholders, analysts,
investors and media are invited to join the live webcast and conference call by
logging in or dialing in just prior to the start time.

Live webcast

http://www.greatpanther.com/

U.S. & Canada Toll-Free

1 800 761 0069

International Toll-Free

+1 212 231 2911

No passcode necessary

Great Panther’s archived
webcast can be accessed by visiting the Investors section (http://www.greatpanther.com/Investors/Events/default.aspx)
of the Company’s website at www.greatpanther.com.

NON-IFRS MEASURES

The discussion of financial
results in this press release includes reference to Gross profit before
non-cash items, Adjusted EBITDA, Cash cost per silver payable ounce, All-in
sustaining cost per silver payable ounce, and All-in cost per silver payable
ounce which are non-IFRS measures. The Company provides these measures as
additional information regarding the Company’s financial results and
performance. Please refer to the Company’s MD&A for the quarter ended March
31, 2014
, for definitions and reconciliations of these measures to the
Company’s financial statements.

(1)
“Adjusted EBITDA”, “Cash cost per silver payable ounce”,
“AISC” and “AIC” are non-IFRS measures. Refer to the
“Non-IFRS measures” section of this Press Release and to the
Company’s MD&A for complete definitions, and reconciliations to the
Company’s financial statements.

(2)
Silver equivalent ounces in 2014 were established using prices of US$18.50
per oz, US$1,200 per oz, US$0.90 per lb, and US$0.85 per lb for silver, gold,
lead and zinc, respectively, and applied to the recovered metal content of
the concentrates that were produced by the two operations.

(3)
Average realized silver price is prior to treatment, refining and smelting
charges.

(4)
“Cash cost per silver payable ounce”, “AISC” and
“AIC” are non-IFRS measures. Refer to the “Non-IFRS
measures” section of this Press Release and to the Company’s MD&A
for complete definitions and reconciliations to the Company’s financial
statements.

ABOUT GREAT PANTHER

Great
Panther Silver Limited
is a primary silver mining and exploration company
listed on the Toronto Stock Exchange trading under the symbol GPR,
and on the NYSE MKT trading under the symbol GPL. The Company’s current
activities are focused on the mining of precious metals from its two
wholly-owned operating mines in Mexico,
Guanajuato and Topia.
Great Panther is also in the process of developing its San Ignacio Project
with a view to production in 2014, and has two exploration projects, El Horcon
and Santa Rosa.
The Company is also pursuing additional mining opportunities within the Americas,
with the goal of adding to its portfolio of mineral properties.

All shareholders have the
option to receive a hard copy of the Company’s financial statements free of
charge upon request. Should you wish to receive Great
Panther Silver’s
Financial Statements in hard copy, please contact us at
the Company toll free at 1-888-355-1766 or 604-608-1766, or e-mail [email protected].

CAUTIONARY
STATEMENT ON FORWARD-LOOKING STATEMENTS

This news release contains
forward-looking statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and forward-looking information within
the meaning of Canadian securities laws (together, “forward-looking
statements”). Such forward-looking statements may include but are not
limited to the Company’s plans for production at its Guanajuato
and Topia Mines in Mexico,
exploring its other properties in Mexico,
the overall economic potential of its properties, the availability of adequate
financing and involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements expressed or
implied by such forward-looking statements to be materially different. Such
factors include, among others, risks and uncertainties relating to potential
political risks involving the Company’s operations in a foreign jurisdiction, uncertainty
of production and cost estimates and the potential for unexpected costs and
expenses, physical risks inherent in mining operations, currency fluctuations,
fluctuations in the price of silver, gold and base metals, completion of
economic evaluations, changes in project parameters as plans continue to be
refined, the inability or failure to obtain adequate financing on a timely
basis, and other risks and uncertainties, including those described in the
Company’s Annual Information Form for the year ended December 31, 2013
and Material Change Reports filed with the Canadian Securities Administrators
available at www.sedar.com and reports on
Form 40-F and Form 6-K filed with the Securities and Exchange Commission
and available at www.sec.gov.

GREAT PANTHER SILVER LIMITED

CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION

(Expressed in thousands of
Canadian dollars)

As at March 31, 2014 and December
31, 2013 (Unaudited)

March
31,

December
31,

2014

2013

Assets

Current assets:

Cash and cash equivalents

$

21,660

$

21,760

Short term investments

31

18

Trade and other receivables

10,623

14,483

Income taxes recoverable

404

570

Inventories

6,931

7,212

Prepaid expenses, deposits and
advances

1,461

707

41,110

44,750

Non-current assets:

Mineral properties, plant and
equipment

52,027

51,276

Exploration and evaluation assets

3,317

3,181

Intangible assets

600

665

Deferred tax asset

258

247

$

97,312

$

100,119

Liabilities and Shareholders’
Equity

Current liabilities:

Trade and other payables

$

4,140

$

6,527

Current tax liability

84

4,224

6,527

Non-current liabilities:

Reclamation and remediation
provision

2,586

2,440

Deferred tax liability

2,285

2,332

9,095

11,299

Shareholders’ equity:

Share capital

123,453

123,022

Reserves

8,100

8,532

Deficit

(43,336)

(42,734)

88,217

88,820

$

97,312

$

100,119

 

GREAT PANTHER SILVER LIMITED

CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of
Canadian dollars, except per share data)

For the three months ended March
31, 2014 and 2013 (Unaudited)

For
the three months ended March 31,

2014

2013

Revenue

$

12,880

$

12,639

Cost of sales

Production costs

9,609

9,532

Amortization and depletion

3,634

2,715

Share-based payments

55

79

13,298

12,326

Gross profit

(418)

313

General and administrative
expenses

Administrative expenses

1,553

1,971

Amortization and depletion

83

37

Share-based payments

61

26

1,697

2,034

Exploration and evaluation
expenses

Exploration and evaluation, and
development expenses

1,601

641

Share-based payments

16

Income (loss) before the
undernoted

(3,732)

(2,362)

Finance and other income (expense)

Interest income

81

86

Finance costs

(38)

(9)

Foreign exchange gain

3,774

4,295

Other income (expense)

(661)

27

3,156

4,399

Income (loss) before income taxes

(576)

2,037

Income tax expense

Current

165

239

Deferred (recovery)

(139)

522

26

761

Net income (loss) for the period

$

(602)

$

1,276

Other comprehensive income (loss),
net of tax

Items that are or may be
reclassified subsequently to net income (loss):

Foreign currency translation

(432)

604

Change in fair value of
available-for-sale financial assets (net of tax)

4

(56)

(428)

548

Total comprehensive income (loss)
for the period

$

(1,030)

$

1,824

Earnings (loss) per share

Basic

$

(0.00)

$

0.01

Diluted

$

(0.00)

$

0.01

 

GREAT PANTHER SILVER LIMITED

CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS

(Expressed in thousands of
Canadian dollars)

For the three months ended March
31, 2014 and 2013 (Unaudited)

Three
months ended March 31,

2014

2013

Cash flows from operating
activities

Net income (loss) for the period

$

(602)

$

1,276

Items not involving cash:

Amortization and depletion

3,717

2,752

Unrealized foreign exchange gains

(3,075)

(4,216)

Income tax (recovery) expense

(139)

522

Accretion on reclamation and
remediation provision

38

9

Share-based payments

132

105

Other (income) expense

661

Other non-cash items

(97)

(78)

635

370

Interest received

62

55

Income taxes paid

(84)

(196)

Net cash from operating activities
before changes in non-cash working capital

613

229

Changes in non-cash working
capital:

Decrease (increase) in trade and
other receivables

3,880

5,001

Decrease (increase) in income
taxes recoverable

166

(7)

Decrease (increase) in inventories

(425)

(320)

Decrease (increase) in prepaid
expenses, deposits and advances

(754)

367

Increase (decrease) in trade and
other payables

(2,428)

(2,231)

Increase (decrease) in current tax
liability

168

394

Net cash from operating activities

1,220

3,433

Cash flows from investing
activities:

Additions to intangible assets

(143)

Additions to mineral properties,
plant and equipment

(2,165)

(3,826)

Proceeds from disposal of plant
and equipment

5

Net cash used in investing
activities

(2,165)

(3,964)

Cash flows from financing
activities:

Proceeds from exercise of options

280

10

Net cash from financing activities

280

10

Effect of foreign currency
translation on cash and cash equivalents

565

270

Increase (decrease) in cash and
cash equivalents

(100)

(251)

Cash and cash equivalents,
beginning of period

21,760

20,735

Cash and cash equivalents, end of
period

$

21,660

$

20,484

 

Contact Information:
Great Panther Silver Limited
Robert A. Archer President & CEO
1-888-355-1766

Great Panther Silver Limited
Rhonda Bennetto Vice President Corporate Communications
1-888-355-1766
[email protected]
www.greatpanther.com

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