Silver Mines
LSE : SVLP

November 12, 2008 08:31 ET

Final Results

Silver Mines Ltd

Annual Report, Quarterly Activities Report, and Closure of Share Purchase Plan.

The Directors of Silver Mines Limited announce the following, full details of which are available on the Companies
Website www.silverminesltd.com.au.

ANNUAL REPORT

Chairman's Letter

Dear Fellow Shareholders,

2008 has turned out to be a year of both dynamic progress and challenges for Silver Mines Limited as we move
towards our goal of becoming a miner through developing one or more high-grade silver rich deposits in our
portfolio.

Since successfully listing on the ASX in January 2007 your company has attained major milestones as it has pursued
a highly successful exploration and targeting strategy which is already showing all the signs that we have
potential for a small-scale silver mine.

This Dynamic progress is exciting and has brought the Company a long way in a short time.

However, this success has been tempered by the deterioration of the world financial markets during the second half
of the financial year and the general erosion of confidence until certainty and stability is re-established. These
factors have impacted on share prices, both for Your Company and across the whole investment sector, and also led
to a tightening in the availability of project finance.

Nevertheless, Your Directors are confident that Silver Mines Ltd. has already established the sound foundations
which will enable us to successfully weather this period and achieve our goals.

Highlights of this foundation include:

- A first resource statement showing a Global Inferred Resource estimate of 4.5 million ounces of silver at the
Webbs Silver Project in north-eastern NSW, which independent consultants, Hellman and Schofield Pty Ltd conclude
supports the Company's view that there is a real potential for a mining operation to be developed on this Company
owned tenement (EL5674);

- Moved well down the track for completion of a full Scoping Study;

- Begun a comprehensive exploration program on our new highly prospective tenement in Tasmania (EL 20/2008) with a
similar scope and potential as the Webbs Silver Project;

- Dual listed on the London PLUS market- the first Australian resource company to tread this path - to broaden our
investor base and heighten awareness in Europe.

Your Board and Executive team intend to maintain the current momentum and our demonstrated successful exploration
philosophy by continuing to primarily focus on development of the Webbs Project and retain our commitment to
solely focus on Silver.

We have a clear focus and philosophy - to concentrate on bringing a smale scale mining operation into fruition and
establish early cash flow.

Our achievements so far are highly encouraging that we are on the right track in this regard and we look forward
to your continued support in the year ahead to share in this Future

Your Chairman

David Sutton.

27th October 2008


Directors' Report



                               Director's Report



Principal Activities

The principal activities of the Company during the financial year were the continued exploration in the New
England Project areas, surface exploration on the Company's exploration licences surrounding our New England
projects, acquisition of and joint venturing into additional significant silver exploration areas.

The Company attained a major goal in its successful progress towards becoming a miner with the release of its
first resource statement showing a Global Inferred Resource estimate of 4.5 million ounces of silver at the Webbs
Silver Project in north-eastern NSW.

- This estimate is by the highly respected independent consultants Hellman and Schofield Pty Ltd.

- Their conclusion is that the resource estimate supports the Company's view that there is real potential for a
mining operation to be developed on the Company's 100% owned tenement (EL5674).

- Their modelling estimates inferred resources to a depth of only 200m , form the surface and suggests that the
Webbs Silver South resource may be amenable to open cut mining for the upper portion.

- The Final depth of any potential open cut mining is yet to be determined.

- High values of copper, zinc  and lead are closely associated with silver mineralization and extraction of silver
by proposed metallurgical methods should extract significant amounts of the associated metals.

The resource estimate provides valuable and encouraging support to the Company's interpretation of the Webbs
Project and its potential for both hosting silver-rich mineralization but more importantly for developing a mine.
This interpretation has been developed over the past two years and is based on sound technical work - drilling and
field work (ground geophysics, surface geochemistry, geological mapping) completed to date.

Results

The Company incurred a pre-tax operating loss of $546,480 (2007: loss $307,742).

Dividends

No dividend has been paid since the end of the previous financial year and no dividend is recommended for the
current year, (2007 - nil).

Review of Operations

The comprehensive review of operations is covered in the General Managers Report that accompanies the accounts.

Significant Changes in the State of Affairs

There were no significant changes in the state of affairs in the Company during the year other than the Admission
of the Company on the PLUS Market on 30 June 2008.

Subsequent Events

There were no significant events after balance date other than the initiation of a Share Purchase Plan in August
2008. The funds will be used to continue exploration and development on the Company's New England Tenements, and
the announcement of the Company first resource estimate.

Events subsequent to reporting date

There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to
affect significantly the operations of the Company, the results of those operations, or the state of affairs of
the Company in future financial years, other than Share Purchase Plan initiated in August 2008. The funds will
used to continue exploration and development on the Company's New England Tenements.

Likely developments

Information on likely developments is included in the Chairman's Report accompanying this financial report.
Further information about likely developments in the operations of the Company and the expected results of those
operations in future financial years has not been included in this report because disclosure of the information
would be likely to result in unreasonable prejudice to the Company.

Environmental Issues

The Company's Project Areas are located on exploration licences issued by the Department of Mineral Resources and
operate under an environmental licence issued by the Environmental Protection Authority. These licences require
the preparation of an annual Environmental Management Report and a Mining Operations Plan.

The Company had statutory obligations to protect the environment in which it was exploring. During the reporting
period the Company did not fail to meet its obligations pursuant to any environmental legislation.


Auditor's Independence Declaration under Section 307C of the Corporations Act 2001 to the directors of Silver
Mines Limited.

I declare that, to the best of my knowledge and belief, in relation to our review of Silver Mines Limited for the
year ended 30 June 2008 there have been:

(i)   no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the review; and

(ii)  no contraventions of any applicable code of professional conduct in relation to the review.

Graham Abbott - Principal

Chartered Accountants Dated 25 September 2008. Sydney, Australia.



INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2008

                                            2008 (A$)        2007 (A$)
                                       --------------------------------
Revenues from ordinary activities      2,219,341         122,256
Expenses from ordinary activities
 Accounting / Company Secretarial        (36,000)        (36,000)
 Wages                                  (195,873)        (73,491)
 Share Registry                          (26,656)         (3,615)
 Stock Exchange Fees                     (15,823)         (4,532)
 Bank Fees                                (2,003)         (1,420)
 Auditors                                (22,880)        (25,100)
 Directors Emoluments                   (127,984)        (75,000)
 Office Expenses                          (6,952)         (7,663)
 Occupational Health & Safety               (621)        (11,739)
 IT & Communications                     (19,297)        (11,308)
 Rent                                    (33,529)        (44,988)
 Depreciation                            (39,529)         (5,888)
 Insurance                               (31,763)        (32,240)
 Professional Advisors                   (85,753)              -
 Other Expenses from ordinary
  activities                            (120,918)        (49,659)
                                       --------------------------------
Loss from ordinary activities
 before income tax expense              (546,480)       (260,387)
 Income Tax Expense                            -               -
Loss from ordinary activities
 after income tax expense               (546,480)       (260,387)
                                       --------------------------------


                                           Cents           Cents
                                       --------------------------------
Basic earnings per share                   (0.01)          (0.01)
Diluted earnings per share                 (0.01)          (0.01)


BALANCE SHEET AS AT 30 JUNE 2008

                                            2008 (A$)        2007 (A$)
                                       --------------------------------
Current Assets
 Cash and Cash Equivalents             1,491,991       4,443,826
 Receivables                             150,783         159,516
Total Current Assets                   1,642,774       4,603,342
Non-Current Assets
 Other Financial Assets                  110,550          50,000
 Intangible Assets:
 Deferred Exploration & Development    3,193,474         898,317
 Property Plant & Equipment              188,031          15,203
Total Non-Current Assets               3,492,055         963,520
Total Assets                           5,134,829       5,566,862
Current Liabilities
 Payables                                284,061         255,959
 Provisions                                4,307           5,664
Total Current Liabilities                288,368         261,623
Non-Current Liabilities
 Payables                                129,283               -
Total Non Current Liabilities            129,283               -
Total Liabilities                        417,651         261,623
--------------------------------------------------------------------
Net Assets                             4,717,178       5,305,239


Equity

 Contributed Equity                    5,571,400       5,612,981
 Accumulated Losses                     (854,222)       (307,742)
TOTAL EQUITY                           4,717,178       5,305,239



Please note that information contained in this announcement has been extracted from the Company's annual report,
which can be found at www.silverminesltd.com.au


ACTIVITIES REPORT

For the Quarter ended 30th September 2008

Exploration

Webbs Silver Project - EL 5674

The programs completed included transient electromagnetic geophysics (TEM) which is used to identify conductive
bodies underground; which may be indicative of massive sulphide mineralization, as well as detailed mapping and
geochemical sampling. Results from these have been very encouraging with seven highly anomalous zones delineated
thus far within the Webbs mineralised corridor. So far four of the zones have been drilled with high grade
mineralization returned at all, the most important at the Webbs Silver South Prospect, which remains open along
the strike and down dip. This success to date demonstrates that the techniques are proving to be an excellent
targeting tool and as such will be used on our other projects where similar targets are being sought.

Mole River

During the September Quarter this year Silver Mines Limited  (SVL) has continued with its exploration programs on
its New England tenement Suite in north eastern NSW with geochemical and geophysical surveys completed on our 100%
owned Mole River  projects (EL's 6114,6512 and 6771).

Work has included an airborne geophysical survey, prospect evaluation and rock chip and soil sampling directed to
the silver and base metal potential of the ground. A number of significant anomalies have been identified at
several prospects and further evaluation of these is continuing with a view to defining drill targets.

A strong regional lineation or jointing strikes NNE, and high grade polymetallic vein mineralisation parallels the
regional structural trend in a number of areas  (e.g. the Avenue, Mosman, Spring Road) and thus cuts across the NW
trend of the lithologies. This dominant NNE- trending polymetallic vein mineralization is considered to be related
to the intrusion of the Mole Granite. A second style of mineralisation  features stockwork and or sheeted veins
developed within interpreted possible fault splays, developed subsidiary to regionally extensive ENE-WSW trending
shears; possible examples of this style are Bondonga and Spring Road.

Follow-up field work has been completed with a number of prospects returning encouraging geochemical and
geological indicators coincident with supporting aerial geophysical signatures. Silver results in both rock chip
and soil geochemistry at specific areas, in particular the Torny, Heffernan's Spring Road and Mosman prospects
provide impetus to these areas being followed up with more detailed work with ground based geophysics and drilling
warranted . The prospects have returned a number of samples exceeding 200ppm Ag (with samples at the Torny and
Heffernan's prospects return up to 1,300 ppm AG) with coincident highly anomalous values of zinc, lead, tin and
copper. These metal associations demonstrate that polymetallic mineralization is evident at a number of prospects
supporting the Company's targeting and exploration model for the area. Broader zones, up to 500m in diameter of
anomalous silver and base metal mineralization provide support for possible discovery of larger tonnage low grade
deposits.

Corporate affairs

SVL approved a Share Purchase Plan ("SPP") to raise additional funding to support the Scoping Study on the Webbs
Silver Project. Due to the rapid decline in the global equity markets and its impact on stock exchanges the
Company decided to withdraw the SPP and return funds to those shareholders who participated. Further fundraising
will be undertaken when market conditions improve.

As a result the Company has postponed the Scoping Study until the New Year and slowed exploration expenditure on
all projects to preserve funds. Whilst exploration work has been slowed SVL will continue to analyse the large and
detailed data set collected over the last 6-12 months with the view of developing existing high priority prospects
into a position to ramping up field activities with detailed geophysiscs and drilling in 2009.
Mining exploration entity quarterly report


Silver Mines Limited - Quarter ended September 2008-11-11
Consolidated statement of cash flows.

--------------------------------------------------------------------------
Cash Flows related to operating     Current quarter        Year to date
activities                                   $A'000  (3 mths to Sept 08)
                                                                 $A'000
--------------------------------------------------------------------------
1.1 Receipts form product sales
and related debtors                               -                   -
--------------------------------------------------------------------------
1.2 Payments for
                 a) exploration and            (423)               (423)
                     evaluation                   -                   -
                 b) development                   -                   -
                 c) production                 (149)               (149)
                 d) administration
--------------------------------------------------------------------------
1.3 Dividends received                            -                   -
--------------------------------------------------------------------------
1.4 Interest and other items of a                15                  15
 similar nature received
--------------------------------------------------------------------------
1.5 Interest and other costs of                   -                   -
 finance paid
--------------------------------------------------------------------------
1.6 Income taxes paid                             -                   -
--------------------------------------------------------------------------
1.7 Other (Exploration Bonds)                     -                   -
--------------------------------------------------------------------------
                                               (557)               (557)
--------------------------------------------------------------------------
Net operating Cash Flows
--------------------------------------------------------------------------
1.8 Payment for purchases of:                     -                   -
 a)                       prospects
 b)              equity investments
 c)              other fixed assets
--------------------------------------------------------------------------
1.9 Proceeds from sake of:                        -                   -
 a)                       prospects
 b)              equity investments
 c)              other fixed assets
--------------------------------------------------------------------------
1.10 Loans to other entities                      -                   -
--------------------------------------------------------------------------
1.11 Loans repaid by other entities               -                   -
--------------------------------------------------------------------------
1.12 Other (provide details if                    -                   -
 material)
--------------------------------------------------------------------------
Net investing cash flows                          -                   -
--------------------------------------------------------------------------
1.13 Total operating and investing             (557)               (557)
--------------------------------------------------------------------------
cash flows (carried forward)
--------------------------------------------------------------------------
Cash flows related to financing                   -                   -
 activities
--------------------------------------------------------------------------
1.14 Proceeds from issues of shares,              -                   -
 options, etc.
--------------------------------------------------------------------------
1.15 Proceeds form sale of forfeited              -                   -
 shares
--------------------------------------------------------------------------
1.16 Proceeds from borrowings                     -                   -
--------------------------------------------------------------------------
1.17 Repayment of borrowings                      -                   -
--------------------------------------------------------------------------
1.18 Dividends paid                               -                   -
--------------------------------------------------------------------------
1.19 Other (provide details if                 (122)               (122)
 material)
--------------------------------------------------------------------------
Net financing cash flows                       (122)               (122)
--------------------------------------------------------------------------
Net increase (decrease) in cash                (679)               (679)
 held
--------------------------------------------------------------------------
1.20 Cash at beginning of                     1,492               1,492
 quarter/year to date
--------------------------------------------------------------------------
1.21 Exchange rate adjustments to                 -                   -
 item 1.20
--------------------------------------------------------------------------
1.22 Cash at end of quarter                      813                813
--------------------------------------------------------------------------

--------------------------------------------------------------------------
Payments to directors of the entity
 and associates of the directors
Payments to related entities of the
 entity and associates of the related
 entities
--------------------------------------------------------------------------
1.23 Aggregate amount of                                    17
 payments to the parties included
 in item 1.2
--------------------------------------------------------------------------
1.24 Aggregate amount of the                                 -
 loans to the parties included in
 item 1.10
--------------------------------------------------------------------------
Explanation necessary for an understanding of the transactions
--------------------------------------------------------------------------
N/A
--------------------------------------------------------------------------
Non-cash financing and investing activities
--------------------------------------------------------------------------
2.1 Details of financing and investing transaction which have had a
    material effect on consolidated assets and liabilities but did not
    involve cash flows
--------------------------------------------------------------------------
N/A
--------------------------------------------------------------------------
2.2 Details of outlays made by other entities to establish or increase
    their share in projects in which the reporting entity has an interest
--------------------------------------------------------------------------
N/A
----------------------------------------------------------------------------
Financing facilities available         Amount available         Amount used
                                                 $A'000              $A'000
----------------------------------------------------------------------------
3.1 Loan Facilities
----------------------------------------------------------------------------
3.2 Credit standby arrangements
----------------------------------------------------------------------------
Estimated cash outflows for the                          A$'000
 next quarter
----------------------------------------------------------------------------
4.1 Exploration and evaluation                              100
----------------------------------------------------------------------------
4.2 Development
----------------------------------------------------------------------------
Total                                                       100
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Reconciliation of Cash
----------------------------------------------------------------------------
Reconciliation of cash at the end  Current quarter $A'000   Previous quarter
 of the quarter (as shown in the                                      $A'000
 consolidated statement of cash
 flows) to the related items in the
 accounts is as follows.
----------------------------------------------------------------------------
5.1 Cash on hand and at bank                          107                116
----------------------------------------------------------------------------
5.2 Deposits at call                                  706              1,376
----------------------------------------------------------------------------
5.3 Bank overdraft
----------------------------------------------------------------------------
5.4 Other
----------------------------------------------------------------------------
Total: cash at end of quarter                         813              1,492
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Changes in interests in mining
 tenements
----------------------------------------------------------------------------
6.1 Interests in mining tenements      N/A
 relinquished , reduced or lapsed
----------------------------------------------------------------------------
6.2 Interests in mining tenements      N/A
 acquired or increased
----------------------------------------------------------------------------
Issued and quoted securities at end of current quarter
----------------------------------------------------------------------------
                                   Total       Number      Issue    Amount
                                  Number       quoted  price per   paid up
                                                        security       per
                                                          (cents) security
----------------------------------------------------------------------------
                                                                    (cents)
----------------------------------------------------------------------------
7.1 Preference securities              -            -          -         -
----------------------------------------------------------------------------
7.2 Changes during quarter             -            -          -         -
 a)    Increases through issues
 b)   Decreases through returns
         of capital, buy backs,
                    redemptions
----------------------------------------------------------------------------
7.3 Ordinary securities       43,447,500   40,160,000          -         -
                                     OFP          OFP
----------------------------------------------------------------------------
7.4 Changes during quarter             -            -          -         -
 a)    Increases through issues
       IPO Tenements Placements
 b)   Decreases through returns
          of capital, buy backs
----------------------------------------------------------------------------
7.5 Convertible debt securities        -            -          -         -
----------------------------------------------------------------------------
7.6 Changes during quarter             -            -          -         -
 a)    Increases through Issues
 b)           Decreases through
            securities matured,
                      converted
----------------------------------------------------------------------------
7.7 Options                               Escrowed      Exercise    Expiry
                                                           Price      date

                              11,635,000                20 Cents   Nov2009
                                            19 Jan
                               5,685,000      2009      20 Cents   Nov2009

                                            19 Jan
                               2,000,000      2009      25 Cents   Nov2009

                                 300,000                20 cents   Nov2009
                                              
7.8 Issued during quarter              -          -            -         -
----------------------------------------------------------------------------
7.9 exercised during quarter           -          -            -         -
----------------------------------------------------------------------------
7.10 Expired during quarter            -          -            -         -
----------------------------------------------------------------------------
7.11 Debentures                        -          -            -         -
----------------------------------------------------------------------------
7.12 Unsecured notes                   -          -            -         -
----------------------------------------------------------------------------
Compliance statement


Compliance statement

1 This statement has been prepared under accounting policies, which comply with accounting standards as defined in
the Corporations Act or other standards acceptable to ASX (see note 4).

2 This statement does) give a true and fair view of the matters disclosed.

Sign here: ........................Date: ..SEPTEMBER 2008

(Director/Company Secretary)

Print name: .KEVIN LYNN

Notes

1 The quarterly report provides a basis for informing the market how the entity's activities have been financed
for the past quarter and the effect on its cash position.

An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this
report.

2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements
acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement
and there are conditions precedent which will change its percentage interest in a mining tenement, it should
disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities. The issue price and amount paid up is not required in items 7.1 and 7.3 for fully
paid securities.

4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement
of Cash Flows apply to this report.

5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign
entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be
complied with.

== ==

The Directors of Silver Mines accept responsibility for the content of this announcement, full details can be
found on the Company's website www.silverminesltd.com.au
For further information please contact:

Silver Mines Limited
Charles Straw
CEO
+61 2 9436 0533
cstraw@silverminesltd.com.au

PLUS Corporate Adviser
Loeb Aron & Co Ltd.
Peter Freeman
+44 207 620 1128
peter@loebaron.co.uk

Contact Information

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