GOVERNANCE

Purpose

1. the integrity of the financial statements of Silver Standard,
2. the independent auditor's qualifications and independence,
3. the performance of Silver Standard's internal audit function and independent auditors, and
4. the compliance by Silver Standard with legal and regulatory requirements.

Committee Membership

The Audit Committee shall consist of three members, each of whom must be a member of the Board. A majority of the members of the Audit Committee shall meet the independence and experience requirements of Section 10A(m)(3) of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of the Securities and Exchange Commission. At least one member of the Audit Committee shall be a financial expert as defined by the Securities and Exchange Commission, unless otherwise determined by the Board.

Independence.

Until otherwise determined by the Board, a majority of the members of the Audit Committee must be independent of Silver Standard as defined in Section 10A(m)(3) of the Exchange Act.

In order to be considered to be independent for purposes of this Charter, a member of the Audit Committee of Silver Standard may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee:

1. accept directly or indirectly any consulting, advisory, or other compensatory fee from Silver Standard or any of its subsidiaries; or
2. be an affiliated person of Silver Standard or any of its subsidiaries.

In this Charter:

1. the term affiliate of, or a person affiliated with, a specified person, means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.
2. a person will be deemed not to be in control of a specified person for purposes of this section if the person:
   1. is not the beneficial owner, directly or indirectly, of more than 10% of any class of voting equity securities of the specified person; and
   2. not an executive officer of the specified person.
3. The following persons will be deemed to be affiliates:
   1. an executive officer of an affiliate;
   2. a director who also is an employee of an affiliate;
   3. a general partner of an affiliate; and
   4. a managing member of an affiliate.
4. The term control (including the terms controlling, controlled by and under common control with) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.
5. # The term indirect acceptance by a member of an audit committee of any consulting, advisory or other compensatory fee includes acceptance of such a fee by a spouse, a minor child or stepchild or a child or stepchild sharing a home with the member or by an entity in which such member is a partner, member, an officer such as a managing director occupying a comparable position or executive officer, or occupies a similar position (except limited partners, non-managing members and those occupying similar positions who, in each case, have no active role in providing services to the entity) and which provides accounting, consulting, legal, investment banking or financial advisory services to Silver Standard or any of its subsidiaries.

Appointment

The members of the Audit Committee shall be appointed by the Board. Audit Committee members may be replaced by the Board.

Meetings

The Audit Committee shall meet as often as it determines, but not less frequently than quarterly, unless otherwise determined by the Board.

Meetings may be with representatives of the independent auditors, and appropriate members of management, all either individually or collectively as may be required by the Audit Committee.

The independent auditors will have direct access to the Audit Committee at their own initiative.

The Audit Committee will report periodically the Audit Committee's findings and recommendations to the Board of Directors.

Audit Committee Authority and Responsibilities

Responsibilities and powers of the Audit Committee include:

• Annual review and revision of this Charter as necessary with the approval of the Board of Directors.
• Determining, as a committee of the Board of Directors, the selection, the appointment, evaluation, fees and, if necessary, the replacement of the independent auditors, subject to the approval of the shareholders of Silver Standard.
• Approving the appropriate audit engagement fees and the funding for payment of the independent auditors' compensation and any advisors retained by the Audit Committee.
• Ensuring that the auditors report directly to the Audit Committee and are made accountable to the Audit Committee and the Board, as representatives of the shareholders to whom the auditors are ultimately responsible.
• Confirming the independence of the auditors, which will require receipt from the auditors of a formal written statement delineating all relationships between the auditors and Silver Standard and any other factors that might affect the independence of the auditors and reviewing and discussing with the auditors any significant relationships and other factors identified in the statement. Reporting to the Board of Directors its conclusions on the independence of the auditors and the basis for these conclusions.
• Ensuring that the independent auditors are prohibited from providing the following non-audit services and determining which other non-audit services the independent auditors are prohibited from providing:
  • bookkeeping or other services related to the accounting records or financial statements of Silver Standard;
  • financial information systems design and implementation;
  • appraisal or valuation services, fairness opinions, or contribution-in-kind reports;
  • actuarial services;
  • internal audit outsourcing services;
  • management functions or human resources;
  • broker or dealer, investment adviser or investment banking services;
  • legal services and expert services unrelated to the audit; and
  • any other services which the Public Company Accounting Oversight Board and Canadian Public Accountability Board determine to be impermissible.
• Preapproving any permissible non-audit engagements of the independent auditors, subject to the de minimus exceptions for non-audit services described in Section 10A(i)(1)(B) (see attached Exhibit I) of the Exchange Act which are approved by the Audit Committee prior to the completion of the audit.
• Meeting with the auditors and financial management of Silver Standard to review the scope of the proposed audit for the current year, and the audit procedures to be used.
• Reviewing with management and the independent auditors:
  • Silver Standard's annual financial statements and related footnotes, management's discussion and analysis and the annual information form, for the purpose of recommending approval by the Board of Directors prior to its release, and ensuring that:
    • management has reviewed the audited financial statements with the Audit Committee, including significant judgments affecting the financial statements;
    • the members of the Audit Committee have discussed among themselves, without management or the independent auditors present, the information disclosed to the Audit Committee;
    • the Audit Committee has received the assurance of both financial management and the independent auditors that Silver Standard's financial statements are fairly presented in conformity with Canadian generally accepted accounting standards ("GAAP") in all material respects, including a reconciliation of significant measurement differences between Canadian and United States GAAP;
  • Any significant changes required in the independent auditors' audit plan and any serious issues with management regarding the audit; and
  • Other matters related to the conduct of the audit that are to be communicated to the Audit Committee under generally accepted auditing standards.
• Reviewing with the independent auditors and management the adequacy and effectiveness of the financial and accounting controls of Silver Standard.
• Establishing procedures: (i) for receiving, handling and retaining of complaints received by Silver Standard regarding accounting, internal controls, or auditing matters, and (ii) for employees to submit confidential anonymous concerns regarding questionable accounting or auditing matters.
• Reviewing with the independent auditors any audit problems or difficulties and management's response and resolving disagreements between management and the auditors.
• Making inquires of management and the independent auditors to identify significant business, political, financial and control risks and exposures and assess the steps management has taken to minimize such risk to Silver Standard.
• Assessing the overall process for identifying principal business, political, financial and control risks and providing its views on the effectiveness of this process to the Board.
• Ensuring that the disclosure of the process followed by the Board of Directors and its committees, in the oversight of Silver Standard's management of principal business risks, is complete and fairly presented.
• Reviewing of confirmation of compliance with Silver Standard's policies on internal controls, conflicts of interests, ethics, foreign corrupt practice, etc.
• Reviewing with financial management and, to the extent it deems necessary or appropriate, the independent auditors interim financial information for the purpose of recommending approval by the Board of Directors prior to its release.
• At least annually obtaining and reviewing a report prepared by the independent auditors describing (i) the auditors' internal quality-control procedures; and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the auditors, or by any inquiry of investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the auditors, and any steps taken to deal with any such issues.
• Setting clear hiring policies for employees or former employees of the independent auditors.
• Ensuring the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law. Consider whether, in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditing firm on a regular basis.
• Engaging independent counsel and other advisors if the Audit Committee determines such advisors are necessary to assist the Audit Committee in carrying out its duties.
• Reporting annually to the shareholders in Silver Standard's Management Information Circular prepared for the annual and general meeting of shareholders on the carrying out of its responsibilities under this charter and on other matters as required by applicable securities regulatory authorities.
• Discussing with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding Silver Standard's financial statements or accounting policies.

Securities Exchange Act of 1934

Sections 10A(i)

1. Preapproval Requirements
   1. In general
      1. Audit committee action
         
         All auditing services (which may entail providing comfort letters in connection with securities underwritings or statutory audits required for insurance companies for purposes of State law) and non-audit services, other than as provided in subparagraph (B), provided to an issuer by the auditor of the issuer shall be preapproved by the audit committee of the issuer.
      2. De minimus exception
         
         The preapproval requirement under subparagraph (A) is waived with respect to the provision of non-audit services for an issuer, if--
         1. the aggregate amount of all such non-audit services provided to the issuer constitutes not more than 5 percent of the total amount of revenues paid by the issuer to its auditor during the fiscal year in which the nonaudit services are provided;
         2. such services were not recognized by the issuer at the time of the engagement to be non-audit services; and
         3. such services are promptly brought to the attention of the audit committee of the issuer and approved prior to the completion of the audit by the audit committee or by 1 or more members of the audit committee who are members of the board of directors to whom authority to grant such approvals has been delegated by the audit committee.
   2. Disclosure to investors
      
      Approval by an audit committee of an issuer under this subsection of a non-audit service to be performed by the auditor of the issuer shall be disclosed to investors in periodic reports required by section 13(a).
   3. Delegation authority
      
      The audit committee of an issuer may delegate to 1 or more designated members of the audit committee who are independent directors of the board of directors, the authority to grant preapprovals required by this subsection. The decisions of any member to whom authority is delegated under this paragraph to preapprove an activity under this subsection shall be presented to the full audit committee at each of its scheduled meetings.
   4. Approval of audit services for other purposes
      
      In carrying out its duties under subsection (m)(2) (set out below), if the audit committee of an issuer approves an audit service within the scope of the engagement of the auditor, such audit service shall be deemed to have been preapproved for purposes of this subsection.
      
      "m. Standards Relating to Audit Committees
   5. Responsibilities relating to registered public accounting firms
      
      The audit committee of each issuer, in its capacity as a committee of the board of directors, shall be directly responsible for the appointment, compensation, and oversight of the work of any registered public accounting firm employed by that issuer (including resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work, and each such registered public accounting firm shall report directly to the audit committee."