Silver Mines
LSE : SVLP

October 30, 2009 06:54 ET

Notice of AGM



                                                         
                                                         
                                                         
                                                         
                                                         
                                                  ACN 107 452 042
                                                         
                                                         
                                                         
                                             Notice of General Meeting
                                             and Explanatory Statement
                                                         
                                                         
                                           General Meeting to be held at
                                         Martin Place Securities Pty Ltd,
                                    Level 3, 14 Martin Place, Sydney, NSW, 2000
                                       Monday, 30 November 2009 at 3.00 p.m.
                                                         
                                                         
                                                         

                                                         
                                                         
                                                         
                                                         
                                                         
                                                         
                                                         
                        This Notice of General Meeting and Explanatory Statement should be
                   read in its entirety. If Shareholder are in doubt as to how they should vote,
                         they should seek advice from their accountant, solicitor or other
                                        professional adviser without delay.
                                               SILVER MINES LIMITED
                                                  ACN 107 452 042
                                                         
                                                         
                                             NOTICE OF GENERAL MEETING

Notice is hereby given that an Annual General Meeting of the Shareholder of Silver Mines Limited (the Company)
will be convened held at Martin Place Securities Pty Ltd, Level 3, 14 Martin Place, Sydney, NSW, 2000, on Monday,
30 November 2009 at 3.00 pm. to consider, and if thought fit, to pass the following resolutions.

If you are unable to attend the meeting, we encourage you to complete and return the enclosed Proxy Form.  The
completed Proxy Form must be received by the Company at least 48 hours before the commencement of the meeting.

An Explanatory Statement is attached.  Shareholder should read this in full.

ORDINARY BUSINESS

Annual Accounts

          "To receive and consider the Annual Company Financial Statements and reports of the Directors and the
          Auditor for the period ended 30 June 2009."


RESOLUTION 1 - Remuneration Report.

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

          "To adopt the remuneration report for the year ended 30 June 2009"

Note: the vote on this resolution is advisory only and does not bind the directors.


RESOLUTION 2 - Re-election of Mr. David Sutton as a Director.

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

          "That Mr David Sutton, a Director of the Company retiring in accordance with the Company's Constitution,
          be re-elected as a Director."


RESOLUTION 3 - Re-election of Mr. Malcolm Bird as a Director.

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

          "That Mr Malcolm Bird, a Director of the Company retiring in accordance with the Company's Constitution,
          be re-elected as a Director."


RESOLUTION 4 - Approval of an Issue of Shares by Directors

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

          "That, pursuant to and in accordance with Listing Rule 7.1 of the Listing Rules of the Australian Stock
          Exchange Limited and for all other purposes, the Company be authorised to allot and issue up to 30% of
          the fully paid ordinary Shares (18,179,251 shares) of the capital of the Company at an issue price no
          less than 80% of the weighted average price for 5 trading days prior to the announcement of a placement
          on the terms and conditions set in the Explanatory Statement accompanying this notice."

           Voting Exclusion Statement
           
           The Company will disregard any votes cast on Resolution 4 by a person who may participate in the
           proposed issue and any  person who might obtain a benefit, except a benefit solely in the
           capacity of a holder of ordinary securities,  if the resolution is passed, and an associate of
           that person.  However, the Company need not disregard a vote if:
               (i)       the vote is cast by a person as proxy for a person who is entitled to vote, in
                        accordance with the directions on the proxy form; or
           (ii)      the vote is cast by the person chairing the meeting as proxy for a person who is
           entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

RESOLUTION  5 - Approval of an Issue of Shares by Directors

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as
an ordinary resolution:

          "That, in accordance with ASX Listing Rule 10.11 and for all other purposes, Shareholders approve and
          authorise the Company to issue 1,468,100 Shares to the Directors in lieu of Directors Fees in accordance
          with the terms in the Explanatory Statement."

Voting Exclusion Statement
The  Company will disregard any votes cast on Resolution 5 by the David Sutton, Malcolm Bird, Kim Slater and David
Straw and an associate of that person.  However, the Company need not disregard a vote if:
        (i)       the vote is cast by a person as proxy for a person who is entitled to vote, in accordance with the
                 directions on the proxy form; or
(ii)       the vote is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in
accordance with a direction on the proxy form to vote as the proxy decides


RESOLUTION  6 - Removal of Graham Abbott Associates as Auditors

To consider, and if thought fit, to pass the following as a special resolution:

          "That be removed as at the completion of the meeting as auditor of Silver Mines Limited".


RESOLUTION  7 - Appointment of Moyes Yong & Co as Auditors

To consider, and if thought fit, to pass the following as a special resolution:

          "That  Moyes Yong & Co  of Level 7, 6 Connell Street, Sydney, NSW, having been nominated by a member  of
          the  Company  pursuant to Section 328B(3) of the Corporations Act 2001 (Cth) ("Act")  and  consented  in
          writing  to act, be appointed as auditors of the Company pursuant to Section 327B of the Act,  effective
          from the close of this meeting."



Dated this 21October 2009

BY ORDER OF THE BOARD

Kevin Lynn
Company Secretary

 NOTES
1.        A shareholder of the Company entitled to attend and vote is entitled to appoint not more than two
      proxies. Where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion
      of the shareholder's voting rights. If the shareholder appoints two proxies and the appointment does not specify
      this proportion, each proxy may exercise half of the votes. A proxy need not be a shareholder of the Company.

2.         In accordance with Regulation 7.11.37 of the Corporations Regulations, the Directors have set a
      snapshot date to determine the identity of those entitled to attend and vote at the Meeting. The snapshot date is
      2.00 p.m. on Saturday 28 November 2009.

3.        A proxy form is attached. If required it should be completed, signed and returned to the Company's
      registered office in accordance with the proxy instructions on that form.

4.        Where a voting exclusion applies, the Company need not disregard a role if it is cast by a person as a
      proxy for a person who is entitled to vote in accordance with the directions on the proxy form or it is cast by
      the person chairing the Meeting as proxy for a person who is entitled
      
                                               SILVER MINES LIMITED
                                                  ACN 107 452 042
                                                         
                                                         
                                               EXPLANATORY STATEMENT

This Explanatory Statement accompanies and forms part of the Notice of Annual General Meeting dated 21 October
2009 (Notice) and has been prepared to provide Shareholder with material information to enable them to make an
informed decision on the business to be conducted at the Annual General Meeting of the Company. Amongst other
things, this Explanatory Statement provides Shareholder with the information required to be provided to
Shareholders by the Corporations Act 2001 and the Official Listing Rules of the Australian Stock Exchange Limited
(ASX Listing Rules).

The Explanatory Statement sets out an explanation of each of the resolutions to be put to Shareholder. Shareholder
should read this Explanatory Statement carefully before determining how to vote in respect of the resolutions.

ANNUAL FINANCIAL REPORTS AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2009

The first item of the Notice is to receive and consider the annual financial reports and accounts of the Company
for the year ended 30 June 2009, comprising the Financial Statements together with the Statement of the Directors,
the Directors' Report and the Auditor's Report. No resolution is required in respect of this agenda item. However,
it provides Shareholders with the opportunity to ask questions of the Company's management and auditors in
relation to the Company's results and operations for that financial year.

RESOLUTIONS 2 and 3 - RE-ELECTION OF DIRECTORS
    
The Re-election of directors, items 2 and 3 of the Notice of Meeting deal with the election of directors. Under
the Company's constitution and the listing rules, a director must not hold office without re-election past the
third Annual General Meeting following the director's appointment or three years, whichever is longer. The
director will be eligible for re-election. The directors required to retire under the above framework are the
Chairman Mr David Sutton and Mr Malcolm Bird. They have both indicated that they will offer themselves for re-
election. The Company selects Board members for their knowledge of and familiarity with financial markets, their
experience with relevant stakeholder groups and their individual contribution to the Board's ability to function
efficiently and with integrity.

The Board's focus is achieving progressive renewal whilst maintaining stability and retaining experience and
guidance which has been invaluable throughout the early stages of the Company's development. In the next years the
Board will focus further upon renewal of its membership and ensuring that the Company's Board possesses the
appropriate pool of skills and experience to take the Company into its next phase of growth as a listed company.

In  accordance  with  the  Clause 20.2 of the Company's Constitution, Messrs Sutton  and  Bird  retire  and  being
eligible,  have offered themselves for re-election. The remaining Director recommends to Shareholders that  Messrs
Sutton and Bird be re-elected as directors.


                                               SILVER MINES LIMITED
                                                  ACN 107 452 042
                                                         
                                                         
                                                         
                                          EXPLANATORY STATEMENT (Page 2)

RESOLUTION 4 - Approval of an Issue of Securities by Directors

Resolution 4 of the Notice of Meeting proposes the issue and allotment of up to 30% of the fully paid
ordinary Shares and Options in the capital of the Company per the ASX Listing Rules.

In compliance with the information requirements of ASX Listing Rule 7.3, members are advised of the
following particulars in relation to the proposed issue:

    1.        Maximum number of Shares to issued - up to 30% of the fully paid ordinary Shares (18,179,251 shares) in
        the capital of the Company.
    2.        Date by which the Company will issue and allot Shares - No later than 3 months after the date of the
        meeting.
    3.        Price at which Shares to be issued - Minimum being no less than 80% of the average market price
        calculated in accordance with ASX Listing Rule 7.3.3.
    4.        Basis upon which allottees will be determined - The allottees will be determined by the Board having
        regard to a number of issues, including:
            (i)       the level of demand for placement Shares;
            (ii)      the identification of Shareholder with a long term commitment to the Company;
            (iii)     the allottees will be clients of Brokers and Sophisticated Investors;
            (iv)      the allottees will not be related parties; and
            (v)       other issues which the board may consider appropriate from time to time.
    5.        Terms of issue - The Shares will rank equally in all respects with the existing ordinary Shares on
        issue.
    6.        Intended use of funds raised - Assuming a share price of 8 cents, the issue of Shares will provide
        additional funding required by the Company for the following purposes:
            (i)       exploration programmes on tenements, primarily within the New England  region (approximately
                $1,000,000);
            (ii)      assessment of capital acquisitions and joint venture opportunities (approximately $150,000); and
            (iii)     General working capital (approximately $250,000).
    7.        Dates of allotment - Allotment will occur progressively.

Pursuant to the placement proposed under resolution 4, no single Shareholder/placee will be permitted to
exceed 20% of the issued capital of the Company and therefore no change in control of the Company is
anticipated.  This prohibition will be included in the placement Information Statement.

It is proposed that the placement be made to selected allottees pursuant to a placement Information
Statement.


RESOLUTION 5 - RATIFY ALLOTMENT OF SHARES TO DIRECTORS IN LIEU OF DIRECTORS FEES

Background
In order to preserve cash, in September 2008, the Directors resolved to take their fees for the remaining nine
months of the financial year in the form of shares in the Company. The Shares were valued at the volume weighted
average share price of the Company shares during the quarter in which the fees became due and payable, which was
4.71 cents per share, December 2008 Quarter, 4.72 cents per share, March 2009 Quarter and 4.38 cents per share,
June 2009 Quarter.

ASX Listing Rule 10.11 prohibits the Company from issuing or agreeing to issue equity securities to a related
party without the approval of holders of ordinary securities, unless one of the exceptions in ASX Listing Rule
10.12 applies. The Directors are related parties of the Company for the purposes of Listing Rule 10.11 and
therefore his allotment of shares requires Shareholder approval in accordance with ASX Listing Rule 10.11.

The maximum participation by the Directors is 1,468,100 shares being $90,000.

Prescribed information
ASX Listing Rule 10.13 sets out a number of matters which must be included in a notice of meeting seeking an
approval under ASX Listing Rule 10.11. For the purposes of ASX Listing Rule 10.13, the following information
regarding the Shares to be issued to the directors under the issue is provided:

    (a)       The allottees of the Shares to be issued pursuant to Resolution 5 are:


       Directors                            Fees foregone              Share granted in lieu of fees
                                                                             (post share split)
                                                  $                                 No.
       David Sutton                            $22,500                            367,025
       Malcolm Bird                            $22,500                            367,025
       Kim Slater                              $22,500                            367,025
       David Straw                             $22,500                            367,025
       Total                                   $90,000                           1,468,100
    
    (b)       As noted above, the Directors are related parties of the Company for the purposes of ASX Listing Rule
        10.11.
    (c)       The maximum number of Shares the Company issued to directors is 1,468,100 shares.
    (d)       The Shares will be issued within one month of the Annual General Meeting.
    (e)       The Shares were issued by the Company at an issue price of volume weighted average of $0.0455 per Share.
    (f)       The funds raised were used for working capital.
    (g)       A voting exclusion statement is included in the Notice.
    (h)       The ordinary fully paid share will rank equally with existing Shares.

Chapter 2E of the Corporations Act
The Company has formed the view that shareholder approval pursuant to Chapter 2E of the Corporations Act is not
required in relation to the issue of shares to the directors. Chapter 2E prohibits the giving of a financial
benefit to a related party of a public company, unless the financial benefit has been approved by shareholders, or
the giving of that benefit falls within the exceptions set out in Chapter 2E.
Section 211 of the Corporations Act provides an exemption for transactions to a related party or officer if the
benefit is remuneration and to give the remuneration would be reasonable given: (i)  the circumstances of the
public company or entity giving the remuneration; and (ii)  the related party's circumstances (including the
responsibilities involved in the office or employment).
In order to preserve cash, in September 2008, the Directors resolved to take their fees for the remaining nine
months of the financial year in the form of shares in the Company. The Shares were valued at the weighted average
share price of the Company shares during the quarter in which the fees became due and payable, which was x cents
per share, December 2008 Quarter, x cents per share, March 2009 Quarter and x cents per share, June 2009 Quarter.

Accordingly, the exemption in section 211 of the Corporations Act applies to the participation of the Directors.

RESOLUTION 7 and 8 - APPOINTMENT OF MOYES YONG & CO AS AUDITOR

The Company's' current Auditors Graham Abbott Associates have served for a maximum period of 5 years. The Company
put its audit function to tender which was won by Moyes Yong & Co and thus it was resolved by the Board to seek
shareholder approval to change its auditors.

The Act requires the Company to appoint at the next Annual General Meeting following any vacancy in the office of
auditor for a public company. As the Company's current auditors, Graham Abbott Associates, will be removed as the
Company's auditors at this Annual General Meeting, the Company seeks shareholder approval to appoint Moyes Yong &
Co in place of Graham Abbott Associates as auditors of the Company, with effect from the close of this Annual
General Meeting

Section 328B of the Act enables the Company to appoint an auditor at its AGM if a member of the Company gives to
the Company a written notice (within the time periods described in the Act)  nominating the proposed auditing firm
to be auditor of the Company. A copy of that shareholder nomination accompanies this Notice of Meeting.

Pursuant to the Act, Moyes Yong & Co have consented to act as Auditors for the Company and have not withdrawn that
consent prior to the date of this meeting.


The Directors recommend that shareholders vote in favour of Resolutions 6 and 7.



OTHER INFORMATION

There is no other information known to the Company that is material to a Shareholder's decision on how to vote on
the resolutions set out in the Notice. However, should any Shareholder be in doubt as to how they should vote on
any resolution and/or as to how a resolution may affect them, they should seek advice from their accountant,
solicitor or other professional adviser as soon as possible.

Queries as to the lodgement of proxies and other formalities in relation to the Meeting should be directed to the
General Manager (Telephone: (02) 9455 0280).

ACTION TO BE TAKEN BY SHAREHOLDERS

Attached to the Notice of Meeting accompanying this Explanatory Statement is a proxy form for use by Shareholders.
All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person and
are eligible to vote, to complete, sign and return the proxy form to the Company in accordance with the
instructions contained on the proxy form and the Notice of Meeting. Lodgement of a proxy form will not preclude a
Shareholder from attending and voting at the Meeting in person.



                                               SILVER MINES LIMITED
                                                  ACN 107 452 942
PROXY FORM
The Secretary
Silver Mines Limited
PO Box 1282,
North Sydney,
NSW, 2060

SHAREHOLDER DETAILS

Name of Shareholder:    ..........................................................................................
                            ...

Address of Shareholder: .............................

I/We being a member(s) of Silver Mines Limited, hereby appoint the following person or failing him/her the
Chairman of the Meeting as my/our Proxy to vote for me/us and on my/our behalf at the Annual General Meeting of
the Company to be held at Martin Place Securities Pty Ltd, Level 3, 14 Martin Place, Sydney, NSW, 2000, on Monday,
30 November 2009 at 3.00 p.m. (and at any adjournment thereof) in the manner indicated below or as he/she thinks
fit.

PROXY'S DETAILS:

Name of Proxy:
          ........................................................................................................
          ...................................
                       (Surname)                                      (Given Names)

Address of Proxy: ................................

                        INSTRUCTIONS AS TO VOTING - Refer attached Notes to the Proxy Form

If  you wish to direct your proxy how to vote with respect to the proposed resolutions, please indicate the manner
in  which your proxy is to vote by placing a "X" in the appropriate box below, otherwise your proxy will  vote  or
abstain from voting as he/she thinks fit.


If the Chairman of the meeting is appointed as your proxy, or may be appointed by default and you do
not  wish to direct your proxy, how to vote as your proxy in respect of a resolution, please place a mark  in  the
box.

By  marking this box, you acknowledge that the Chairman of the meeting may exercise your proxy even if he  has  an
interest  in  the  outcome of the resolution and votes cast by the Chairman of the meeting for  those  resolutions
other than as proxy holder will be disregarded because of that interest.

If  you  do  not mark this box, and you have not directed your proxy how to vote, The Chairman will not cast  your
votes  on  the  resolution and your votes will not be counted in calculating the required majority if  a  poll  is
called on the resolution.

      PROXY'S      VOTING     INSTRUCTIONS     (OPTIONAL)                                                
                                                        FOR                   AGAINST              ABSTAIN
Ordinary Resolutions                                                                                  
    1)        Remuneration Report                                                                  
                                                        

    2)        Re- election of David Sutton                                                         
                                                                                                      
    3)        Re- election of Malcolm Bird                                                         
    
                                                                                                      
    4)        Approval of an Issue of Shares by                                                    
        Directors
                                                                                                   
    5)        Ratify Allotment of Shares to Directors                                              
                                                                                                   
    6)        Removal of Graham Abbott Associates as                                               
        Auditor
                                                                                                   
    7)        Appointment of Moyes Yong & Co  as                                                   
        Auditor                                         

                                                         
It is the Chairman's intention to vote in favour of all resolutions in relation to undirected proxies.

FOR INDIVIDUALS OR JOINT HOLDERS


..........................................................
        .............................................................
        ............................................
Signature of Shareholder                                                         Name (Please Print)         Date


..........................................................
        .............................................................
        ............................................
Signature of Shareholder                                                         Name (Please Print)         Date
(Joint Shareholder)


IF  THE  MEMBER  IS  A  COMPANY.   The COMMON SEAL of the company was herewith  affixed  in  accordance  with  the
Constitution in the presence of:


..................................      ........................................ ................
Director                                Director/Secretary                       Date

IF  THE MEMBER IS A COMPANY HAVING ONE PERSON AS ITS SOLE DIRECTOR AND SOLE COMPANY SECRETARY.  The COMMON SEAL of
the company was herewith affixed in accordance with the Constitution in the presence of:


..........................................................
        ......................................................
Sole Director/Company Secretary                                    Date


NOTES TO THE PROXY FORM

Pursuant  to  the Company's Constitution and the Corporations Act 2001, any person registered in the  Register  of
Shareholder  as  a  holder  of one or more Shares 48 hours prior to the time of commencement  of  the  Meeting  is
entitled to attend and vote at the Meeting.

Shareholders  are entitled to appoint up to two individuals to act as proxies to attend and vote on their  behalf.
Where  more than one proxy is appointed, each proxy must be appointed to represent a specified proportion  of  the
Shareholder's voting rights.

The Proxy Form and the Power of Attorney (if any) or the instrument appointing the proxy and power of attorney (if
any)  under which it is signed (or an office copy or notarially certified copy thereof) must be deposited  at  the
Registered Office of the Company (11 Rodborough Avenue, Crows Nest, NSW, 2065) at least 48 hours prior to the time
of  holding  of  the  Meeting (and at any adjournment thereof), at which the individual named in  the  Proxy  Form
proposes to vote.

A proxy must be signed by the Shareholder or his/her attorney duly authorised in writing or, if the Shareholder is
a corporation, under its common seal or under the hand of an authorised officer or attorney.

A  person  authorised  (pursuant to the provisions of the Corporations Act 2001)  by  a  corporation  which  is  a
Shareholder of the Company to act as its representative at the Meeting is entitled to exercise the same powers  on
behalf of the corporation as the corporation could exercise if it were an individual Shareholder of the Company.

A  legible  facsimile  transmission  copy  of the instrument and the power  of  attorney  or  other  authority  is
acceptable.   The facsimile number to which a Proxy Form may be sent is +61 2 9455 0879. The proxy may,  but  need
not be, a Shareholder of the Company.

Corporate Representation

A  company  may  only  vote  by  proxy, power of attorney or by appointment of  a  corporate  representative.  The
instrument  appointing  a proxy is not valid unless the original instrument and the power  of  attorney  or  other
authority  (if  any) under which the instrument is signed (duly stamped where necessary) or a  copy  or  facsimile
which  appears  on  its  face  to be an authentic copy of that proxy, or power of attorney  is  submitted  to  the
Registered  Office  within the time set out herein.  A company must sign a proxy under common seal  in  accordance
with its Constitution or under power of attorney, which must be produced, with the Proxy Form.

If the Shares are registered in the name of more than one person, all such holders must sign the Proxy Form.

To  be  valid  a  Proxy Form and the Power of Attorney under which it is signed or proof thereof must  be  to  the
satisfaction of the Directors.

Contact Information

  • Silver Mines