Silver Mines
LSE : SVLP

May 03, 2011 02:00 ET

Activities Report for the quarter ended 31 March 2011

                                                                                                               
29th April, 2011
To: Company Announcement officer
ACTIVITIES REPORT - FOR THE QUARTER ENDED 31st March 2011.
HIGHLIGHTS DURING THE QUARTER
Exploration Target
    -   Silver Mines announced it has defined an exploration target of between 4.0 million and 7.0 million
        tonnes at 200-260g/t silver for the Webbs Silver project(1).
        
    -   This target has the potential to contain between 26 - 57Moz of silver.
        
    -   The exploration target includes the existing JORC compliant Inferred and Indicated Resources of 1.23Mt
        at 256g/t silver containing 10.15Moz(2).
Drilling
    -   DDH011 intersected 3.95m @ 916g/t Ag, 0.9% Cu, 0.16% Pb and 3.42% Zn from 94.6m
    -   DDH006 intersected 3.0m @ 408g/t Ag, 0.59% Cu, 2.54% Pb and 1.93% Zn from 81.7m and;
        6.0m @ 275g/t Ag, 0.39% Cu, 0.39% Pb and 2.19% Zn form 96.15m
        
    -   DDH009 intersected 3.0m @ 261g/t Ag, 0.31% Cu, 1.30% Pb and 1.20% Zn from 23.8m
    -   DDH008 intersected 2.0m @ 196g/t Ag, 0.26% Cu,  1.25% Pb and 1.23% Zn from 21.6m and;
        2.0m @ 180g/t Ag, 0.1% Cu, 0.68% Pb and 0.85% Zn from 37.2m
        
    -   DDH007 intersected 6.0m @ 167g/t Ag, 0.18% Cu, 0.83% Pb and 1.53% Zn from 137.9m
    -   Results from previous deep drilling at Main Shaft workings confirms existence of lode structure at
        depth >250m
        
    -   Results for the remaining 5 holes will be released when available and are expected in the near term.
EXPLORATION DURING THE QUARTER
WEBBS SILVER PROJECT - EL5674
Exploration Target
During the quarter Silver Mines defined an exploration target at Webbs of between 4.0 million and 7.0 million
tonnes at 200-260g/t silver for the Webbs Silver project(1). This target has the potential to contain between 26
and 57Moz of silver. Details of the exploration target were released in ASX Announcement dated February 17,
2011.
In accordance with Clause 18 the JORC Code, readers are advised that the defining of an exploration target
provides the following;
'the potential quantity and grade is conceptual in nature, that there has been insufficient exploration to
define Mineral Resources (aside from the resources included and previously reported) and that it is uncertain
if further exploration will result in the determination of a Mineral Resource'.
Drilling
During the quarter Silver Mines completed a 1236m diamond drilling program in 11 holes at the Webbs project.
These holes were designed to improve the geological understanding of the deposit and provide samples for
metallurgical testwork. Results to date from this program have confirmed and possibly enhanced the resource
model. Some results also serve to demonstrate local grade variability in some areas where diamond holes twinned
previous RC holes. Results so far from this drilling program were released in an ASX Announcement on March 15,
2011.
Results for an additional 5 holes from this program will be released in the near term.
Scoping Study
During the quarter Silver Mines continued a Scoping Study on the Webbs project seeking to evaluate the
potential of open pit mining and on site processing to produce silver rich concentrates for export. Subsequent
to the end of the quarter the results of the Scoping Study were released in an ASX Announcement on April 16,
2011. Results of the Scoping Study are considered quite positive with significant upside. However, additional
resources are required to extend the potential mine life. Silver Mines remains optimistic that this outcome can
be achieved in the short term.
OTHER PROJECTS
Silver Mines has been preparing and will soon commence exploration programs on several exploration licences
located near EL5674. This includes IP geophysics, geological mapping and geochemistry. Many of these prospects
contain old workings that have been subject to very little previous exploration and certainly no prior
drilling. Silver Mines consider these areas to have potential for Webbs style silver rich polymetallic
mineralisation.
PLANNED ACTIVITIES for JUNE QUARTER 2011
Silver Mines expects to commence a 15,000m RC drilling program in May. The program has several aims.
    1.  Upgrade and expand the current resource at the Webbs Silver project specifically to increase the
        current Indicated resource.
    2.  Drill specific target areas within the Exploration Target at Webbs sufficient to estimate Inferred
        Resources if warranted.
    3.  Reconnaissance drill testing of geophysical and geochemical targets around Webbs and at other regional
        project areas.
Metallurgical testwork will commence on diamond drill core recently acquired at Webbs in order to investigate
floatation performance of the mineralisation.
Further diamond drilling is planned to assist with ongoing evaluation of the Webbs project.
Additional IP surveys, geological mapping and sampling are planned or have commenced on EL's 6771 and 6772,
located north and south of Webbs respectively.
Please direct any queries regarding the content of this report to Charles Straw (CEO) on +61 2 9253 0900 or
cstraw@silverminesltd.com.au.
(1)The  information in this Document that relates to Exploration Results, Mineral Resources or Ore Reserves  is
based  on  information  compiled  by Mr David Hobby, consulting geologist to  SVL,  who  is  a  Member  of  The
Australasian  Institute of Mining and Metallurgy. Mr Hobby has sufficient experience which is relevant  to  the
style of mineralisation and type of deposit under consideration and to the activity which he is undertaking  to
qualify  as  a  Competent  Person as defined in the 2004 Edition of the 'Australasian  Code  for  Reporting  of
Exploration'  for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Hobby  consents  to
the  inclusion  in  the  report of the matters based on his information in the form and  context  in  which  it
appears.
(2)The information in this Document that relates to Exploration Results, Mineral Resources or Ore Reserves
is based on information compiled by Mr Robin Rankin, who is a Member of the Australasian Institute of
Mining and Metallurgy (MAusIMM) and registered as a Chartered Professional Geologist (CPGeo). Robin Rankin
is Principal Consulting Geologist and operator of the independent geological consultancy GeoRes. He has
sufficient experience which is relevant to the style of mineralisation and type of deposit under
consideration, and to the activity which he is undertaking, to qualify as a Competent Person as defined in
the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves' (the  JORC Code). He consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
---------------------------------------------------------------------------------
JORC Category        Tonnes         Ag g/t        Cu %         Pb %         Zn %
---------------------------------------------------------------------------------
Inferred             1,066,000         240        0.27         0.83         1.83
---------------------------------------------------------------------------------
Indicated            167,000           360        0.32         0.55         1.91
---------------------------------------------------------------------------------
TOTAL                1,233,000         256        0.28         0.79         1.84
---------------------------------------------------------------------------------
 2 Resource estimate for Webb's Silver Project at 70g/t Ag lower cut-off.

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