As at April 22, 2014, the Company owned 11,000,000 common shares of Minco Silver (March 31, 2014 13,000,000 common shares) that were acquired in 2004 in exchange for the transfer of the Fuwan property and the silver interest in the Changkeng property. As at April 22, 2014, the Company owned a 18.45% (March 31, 2014 -- 21.81%) equity interest in Minco Silver.

The following discussion respecting the Fuwan Silver Project held by Minco Silver is based on Minco Silver's public disclosure available on SEDAR at www.sedar.com.

Current Developments on the Fuwan Silver Project

During 2013, Minco Silver made great efforts to regain the support of local communities for development of the Fuwan Silver Project before the submission of the revised Environmental Impact Assessment ("EIA") report. Minco Silver has had productive communication with the Zhaoqian District government and the Gaoyao County government. Due to the fact that the last public survey was carried out in 2008, Minco Silver conducted a new extensive public survey among local communities concerning the development of the Fuwan Silver Project in the first half year 2013, and obtained a strong support from the locals. On May 26, 2013, the Gaoyao County government issued an official approval of the development of the Fuwan Silver Project to the Company.

Minco Silver successfully renewed the Fuwan Exploration Permit and Mining Area Permit of the Fuwan project in 2013. The renewed permits have a two -year valid period ending on July 20, 2015 and April 10, 2016 respectively. The Preliminary Mine Design for the Fuwan Project was completed by China Nerin Engineering Co. Ltd in 2013.

Several large mining groups in China expressed an interest in the Fuwan Silver Project in late 2012. Minco Silver hosted site visits, data reviews, and preliminary discussions with those groups; however no definitive agreements have been concluded as at the date of this MD&A. Minco Silver's strategy is to secure a large Chinese mining group as a business partner.

Minco Silver has continued its focus on the EIA report and the permitting process in order to apply for a mining license for the Fuwan Silver Project.

Minco Silver engaged the Guangdong Nuclear Design Institute ("GNDI") to complete the Chinese Regulatory EIA report in 2010. The EIA report was reviewed by a technical panel appointed by the Department of Environmental Protection Administration of Guangdong Province in principle on March 7, 2010 with certain comments. Minco Silver submitted the revised report to the Department in December 2010 after addressing the comments received from the panel.

Minco Silver engaged General Station for Geo-Environmental Monitoring of Guangdong Province ("GSGEM") for a water monitoring study to comply with the new water regulations issued by the Ministry of Environmental Protection of China effective on June 1, 2011. GSGEM carried out the required monitoring study and prepared all reports required for compliance with the new National Water Guidelines. Minco Silver successfully completed the field work in January 2012 and received the comprehensive water monitoring report from GSGEM in April 2012. The report concluded that Minco Silver is in compliance with the requirements of the new National Water Guidelines.

The revision of the EIA report has been completed incorporating the results from the water monitoring survey report. The revised EIA will be submitted to the Department of Environment Protection of Guangdong ("EPA") as soon as they accept new application of EIA reports. The delay in approval of the EIA report on the Fuwan Silver Project has been due to the negative impact caused by the collapse of the tailing dam of an operating mine in the region of Guangdong Province three years ago. The preliminary mine design is near completion and will be released after the requirements from the approved EIA report are met.

Minco Silver has otherwise made significant progress in permitting on the Fuwan Silver Deposit. The progress is summarized as follows:

• The Chinese Preliminary Feasibility Study was completed by Changsha Non-Ferrous Mine Design Institute and approved by an expert panel
• The Mining Area Permit, covering approximately 0.79 km², defines the mining limits of the Fuwan Silver Deposit and restricts the use of this land to mining activities. The Permit was approved by MOLAR and renewed subsequent to the original approval in October 2009. The current permit expires on April 10, 2016. The Company is in the process of renewing this permit with the Ministry of Land and Resources.
• The Soil and Water Conservation Plan was completed and approved.
• The Land Usage Permit was approved by the Gaoming County, Foshan City and Guangdong provincial governments. It was renewed for a one year period until December 31, 2014.
• The Geological Hazard Assessment was completed and approved in September 2009.
• The Mine Geological Environment Treatment Plan was reviewed and approved by the Environment Committee of China Geology Association.
• The preliminary Safety Assessment draft report was completed in December 2011 and submitted to the Safety Bureau of Guangdong Province for approval.

For further information, please see our 43-101 Technical Reports page and then follow the link to our NI 43-101 Technical Report dated January 03, 2007. U.S. Shareholders may click here to for cautionary notes. The information is also available on SEDAR at www.SEDAR.com

All other disclosure of a scientific or technical nature on this website was reviewed and approved by Thomas Wayne Spilsbury, an independent director of Minco Silver Corporation, a Member of the Australian Institute of Geoscientists and a Fellow of the Australasian Institute of Mining and Metallurgy CP (Geo) and a "qualified person", as defined in NI 43-101