Silver Mines

April 07, 2011 03:31 ET

Issue of Equity

                                                                                              7 April 2011

Dear Option Holder


As at the date of this notice you are the registered holder of 1 May 2011 Options (SVLO) in Silver Mines
Limited which are due to expire on Sunday 1 May 2011. Your options will expire unless exercised on or before
that date. Please read the following information carefully.


Your options expire at 5.00 pm (Sydney time) on Sunday 1 May 2011. Quotation of these options will cease on the
ASX 5 business days before the conversion or expiry date at the close of trading on Tuesday 19 April 2011.


The exercise price of the Option is twelve cents ($0.12) per Option. Each Option exercised will result in one
fully paid ordinary share in the Company being issued. Should you wish to exercise your Options, cheques in
Australian currency equivalent to the amount due on exercise, should be made payable to Silver Mines Limited
and crossed "Not Negotiable".

Your cheque together with a completed and signed Notice of Exercise of Options Form (attached) should be lodged
with the Company's share registry:

Registries Limited,
Level 7, 207 Kent Street
Sydney, NSW 2000
Tel: +61 2 9290 9600
Fax: +61 2 9279 0664

Registries Limited
GPO Box 3993
Sydney, NSW 2001

by no later than close of business on Sunday 1 May 2011.


Options not exercised by 1 May 2011 will lapse with no value. No further entitlement will exist.


No underwriting agreement currently exists in respect of these options.


The latest available market sale price on the Australian Securities Exchange Limited (ASX) on the date of this
notice for those securities to which the Options may be converted was $0.325 at close of trade on 4th April

The highest and lowest sale price on the ASX for the three months preceding the date of this notice and the
respective dates of those sales for those securities to which the Options may be converted were:

Highest  -   $0.40 on 7 and 8 March 2011

Lowest   -   $0.22 on 28 January 2011


On the 25th October 2010 Silver Mines Limited announced an upgrade to the JORC resource at their Webb's Silver
Project to 10.14 M Oz of silver at an impressive grade of 256 g/t Ag, making Webbs the highest grade
undeveloped silver project in Australia. The company used a cut off grade of 70 g/t Ag which is very close to
the resource grade of silver projects owned by other ASX listed companies.

Table 1: Resource estimate for Webb's Silver Project at 70ppm Ag lower cut-off.

         JORC Category   Tonnes     Ag g/t  Cu %   Pb %   Zn %    Contained Ag (M Oz)

         Indicated       167,000    360     0.32   0.55   1.96    1.93

         Inferred        1,066,000  240     0.27   0.83   1.83    8.21

         TOTAL           1,233,000  256     0.28   0.79   1.84    10.14

On 16 February 2011 the Company announced that an Exploration Target between 4.0 and 7.0 million tonnes at 200-
260 g/t silver has been identified at the Webbs silver project. This target has the potential to contain
between 26 - 57 Moz of silver.  The exploration target includes the existing JORC compliant Inferred and
Indicated Resources shown above. An exploration target has not been determined for copper, lead and zinc grades
known to occur in the resource.

Silver Mines is carrying out a resource evaluation drilling program at its Webb's Silver Project and has
planned a 12,000m RC drilling program to commence in early April 2011. This program is designed to increase and
upgrade the existing resource. Drilling will also take place at exploration targets around Webbs and at other
prospects in the region.

On behalf of the Board I encourage you to consider exercising your options. The Company is very pleased with
our exploration success to date.  Our silver projects in NSW, especially Webbs projects to offer continued
success for the Company in the future.

Yours faithfully

Kevin Lynn
Company Secretary

                                                                                       Silver Mines Limited
                                                                                       Incorporated in New South Wales 
                                                                                       ABN 45 107 452 942 

Application for Shares on Exercise of Options

I/We being the registered holders of Silver Mines Limited Options (expiring 1 May 2011) each to acquire one
Fully Paid Ordinary Share in Silver Mines Limited hereby give notice of the exercise of Options and attach
hereto my/our cheque payable to SILVER MINES LIMITED at $0.12 per Option in payment of such exercise.

I/We agree to my/our name/s being placed on the Register of Members in respect to the number of Shares allotted
and to be bound by the Constitution of the Company.

      Number of Options Held:             Multiplied                           Total Payment Due:
                                          by the exercise
                                          price of $0.12

Accordingly, I/We enclose a cheque for the sum of A$__________________ being the correct amount for the
exercise of __________________ Options.

Please Sign Here:

      Shareholder 1 (Individual)          Joint Shareholder 2 (Individual)     Joint Shareholder 3 (Individual)

  Sole Director & Sole Company                       Director                   Director / Company Secretary


      Business Telephone No. (___)___________________________       Date______________________________________

Please return to Silver Mines Limited C/- Registries Limited GPO Box 3993 SYDNEY NSW 2001

ASX Limited                                                                                   7 April 2011
Exchange Centre
20 Bridge Street
Sydney NSW 2000

Yours faithfully

Dear Option Holder

                                       AMENDED NOTIFICATION OF EXPIRY OF OPTIONS

                                    Options expiring 5.00 pm (Sydney time) on 1 May 2011.

For clarification, Silver Mines Limited advise that due to the public holidays over the Easter break, quotation
of these options will cease on the ASX 5 business days before the conversion or expiry date at the close of
trading on Tuesday 19 April 2011, and not 21 April 2011 as previously advised.

Kevin Lynn

Company Secretary

Silver Mines Limited (ACN 107 452 942)
FKP House, 5th Floor 17-19 Bridge St, Sydney, NSW Australia 2001 
P: +61 2 9253 0900 F: +61 2 9253 0901

Contact Information

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