Silver Mines

LSE : SVLP


March 05, 2013 05:47 ET

Issue of Equity - Prospectus Document

Prospectus

Silver Mines Limited

ACN 107 452 942

This Prospectus has been issued to facilitate the secondary trading of 22,704,200 Shares and 18,295,072
Options.

This Prospectus has also been issued to provide information on the Offer of 5,000,000 New Shares at an issue
price of 4.7 cents ($0.047) per New Share and 2,500,000 New Options subject to Shareholder Approval.

5 March 2013

IMPORTANT INFORMATION

This Prospectus is a transaction-specific prospectus issued in accordance with section 713 of the
Corporations Act 2001 (Cth). This Prospectus does not contain all the information that is generally required
to be set out in a document of this type, but refers to other documents, the information of which is deemed
to be incorporated into this Prospectus.

This Prospectus and any such incorporated documents should be read in their entirety before making a decision
to apply for New Shares and New Options.

If you have any questions as to the contents of this Prospectus or the course of action you should follow,
please consult your stockbroker, accountant, solicitor or other professional financial adviser immediately.

Important Notice

Offer

The Offer contained in this Prospectus is an invitation to acquire fully paid ordinary shares and options in
Silver Mines Limited ACN 107 452 942 ("SVL" or "Company").

Lodgement and listing

This Prospectus is dated 5 March 2013 and was lodged with ASIC and the ASX on that date.

This Prospectus expires 13 months after the date of this Prospectus ("Expiry Date"). No Shares will be issued
on the basis of this Prospectus after the Expiry Date.

SVL will apply to the ASX within seven days of the date of this Prospectus for Official Quotation of the New
Shares and New Options issued under the Offer.

Neither ASIC nor ASX take any responsibility for the contents of this Prospectus, or the merits of the
investment to which this Prospectus relates.

Section 713 prospectus

This Prospectus is issued pursuant to section 713 of the Corporations Act. Section 713 permits the issue of a
more concise disclosure document in relation to an offer of continuously quoted securities. In preparing this
Prospectus, regard has been had to the fact that the Company is a disclosing entity for the purposes of the
Corporations Act and that certain matters may reasonably be expected to be known to investors and their
professional advisers. This Prospectus is intended to be read in conjunction with the publicly available
information in relation to the Company which has been notified to the ASX and does not include all
information that is generally required to be included in a document of this type. Refer to Section 5.5 for
details of the information deemed to be incorporated by reference into this Prospectus.

Note to Applicants

This Prospectus does not provide investment advice. You should seek your own investment and/or financial
advice in relation to the Offer. The Offer contained in this Prospectus does not take into account your
investment objectives, financial situation and particular needs. It is important that you read this
Prospectus carefully and in full before deciding to invest in SVL. In particular, in considering the
prospects of SVL, you should consider the risk factors that could affect the financial performance of SVL in
light of your personal circumstances (including financial and taxation issues) and seek professional advice
from your stockbroker, accountant or other professional financial adviser before deciding to invest.

Disclaimer

No person named in this Prospectus, nor any other person, guarantees the performance of SVL, the repayment of
capital or the payment of a return on the Shares.

No person is authorised to give any information or make any representation in connection with the Offer which
is not contained in this Prospectus or incorporated by reference. Any information or representation not
contained in the Prospectus or incorporated by reference may not be relied on as having been authorised by
SVL or the Directors.

Forward looking statements

This Prospectus may contain forward looking statements.

These statements are based on an assessment of present economic and operating conditions, and on a number of
assumptions regarding future events and actions that, at the date of this Prospectus, are expected to take
place. Such forward looking statements are not guarantees of future performance and involve known and unknown
risks, uncertainties, assumptions and other important factors, many of which are beyond the control of SVL.

SVL cannot and does not give any assurance that the results, performance or achievements expressed or implied
by the forward looking statements contained in this Prospectus will actually occur and investors are
cautioned not to place undue reliance on these forward looking statements.

Forward looking statements should be read in conjunction with the risk factors set out in Section 4 and other
information in this Prospectus.

No overseas registration

This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom,
it would not be lawful to make such an offer or invitation. No action has been taken to register or qualify
the New Shares, New Options or the Offer, or to otherwise permit a public offering of Shares, in any
jurisdiction outside Australia. The distribution of this Prospectus (including in electronic form) outside
Australia may be restricted by law and persons who come into possession of this Prospectus outside Australia
should seek advice and observe any such restrictions. Any failure to comply with such restrictions may
constitute a violation of applicable securities laws.

This Prospectus may not be released or distributed in the United States. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, securities in the United States. In particular, the
Shares have not been, and will not be, registered under the US Securities Act of 1933, and may not be offered
or sold in the United States or to, or for the account or benefit of, US Persons (as defined in Regulation S
under the US Securities Act) unless the Shares are registered under the US Securities Act, or an exemption
from the registration requirements of the US Securities Act is available.

Electronic Prospectus

This Prospectus (without an application form) may be viewed online at www.silverminesltd.com.au. However, it
cannot be used to apply for Shares. Persons who access the electronic version of this Prospectus should
ensure that they download and read the entire Prospectus. The Offer constituted by this Prospectus is
available only to persons receiving this Prospectus in electronic form within Australia.

Persons having received a copy of this Prospectus in its electronic form may, during the Offer Period, obtain
a paper copy of this Prospectus (free of charge within Australia) by contacting SVL on (02) 9253 0900 (from
within Australia) or +61 2 9253 0900 (from outside Australia). Applications for Shares may only be made on
the Application Form attached to or accompanying this Prospectus. The Corporations Act prohibits any person
from passing on to another person the Application Form unless it is attached to or accompanies a hard copy of
the Prospectus or a complete and unaltered electronic copy of this Prospectus.

Financial amounts

Money as expressed in this Prospectus is in Australian dollars unless otherwise indicated.

Glossary

Certain terms and abbreviations used in this Prospectus have defined meanings which are explained in the
Glossary in Section 7 of this Prospectus.

Privacy

By filling out an Application Form to apply for Shares, you are providing personal information to SVL through
SVL's service provider, the Share Registry, which is contracted by SVL to manage Applications. SVL, and the
Share Registry on its behalf, collect, hold and use that personal information in order to process your
Application, service your needs as a Shareholder, provide facilities and services that you request and carry
out appropriate administration.

If you do not provide the information requested in the Application Form, SVL and the Share Registry may not
be able to process or accept your Application.

Your personal information may also be provided to SVL's agents and service providers on the basis that they
deal with such information in accordance with SVL's privacy policy.

You may request access to your personal information held by (or on behalf of) SVL. You may be required to pay
a reasonable charge to the Share Registry in order to access your personal information. You can request
access to your personal information by writing to, or telephoning, the Share Registry as follows:

 

Boardroom Limited
Level 7, 207 Kent Street
Sydney NSW 2000

Telephone: +61 2 9290 9600
Fax: +61 2 9279 0664
Email: enquiries@boardroomlimited.com.au

If any of your information is not correct or has changed, you may require it
to be corrected.

 

Key Offer Information

 


----------------------------------------------------------------------------
Important dates(i)
----------------------------------------------------------------------------
Prospectus lodgement date                         5 March 2013
----------------------------------------------------------------------------
Offer opens                                       5 March 2013
----------------------------------------------------------------------------
Offer closes                                      12 March 2013
----------------------------------------------------------------------------
Shareholder Approval for issue of New Shares and
 New Options                                      on or about 12 April 2013
----------------------------------------------------------------------------
Issue and Allotment of New Shares and New Options 12 April 2013
----------------------------------------------------------------------------
Application to ASX for Official Quotation of the
 New Shares                                       12 April 2013
----------------------------------------------------------------------------
Expected despatch of holding statements           12 April 2013
----------------------------------------------------------------------------
Expected commencement of trading of New Shares
 and New Options on the ASX                       14 April 2013
----------------------------------------------------------------------------

Notes:
(i) This timetable is indicative only and is subject to change. SVL reserves
the right to vary the timetable without prior notice, including by closing
the Offer before the scheduled Closing Date or by extending the Closing
Date. Applicants are encouraged to submit their Application Forms as soon as
possible after the Offer opens.

 

Key Offer Statistics

 


----------------------------------------------------------------------------
Number of Shares on issue at the date of this Prospectus        186,701,291
----------------------------------------------------------------------------
Total Shares on issue following completion of the Offer
 (assuming the Offer is fully subscribed)                       191,701,291
----------------------------------------------------------------------------
Offer Price                                                     $0.047
----------------------------------------------------------------------------
Gross proceeds of Offer (assuming the Offer is fully
 subscribed)                                                    $235,000
----------------------------------------------------------------------------
Number of Options on issue at the date of this Prospectus       24,547,443
----------------------------------------------------------------------------
Total Options on issue following completion of the Offer
 (assuming the Offer is fully subscribed)                       27,047,443
----------------------------------------------------------------------------

 

How to invest

Applications to subscribe for New Shares can only be made by completing and lodging an Application Form
attached to, or accompanying this Prospectus.

Instructions on how to apply are set out in Section 2.7 and on the back of the Application Form.

Contents

 

1     Investment overview                                                 6
2     Details of the Offer                                                9
3     Purpose and effect of the Offer on the Company                      14
4     Risk factors                                                        17
5     Additional information                                              23
6     Authorisation                                                       31
7     Glossary                                                            32

 

1. Investment overview

 

----------------------------------------------------------------------------
Question            Answer                                   More
                                                             information
----------------------------------------------------------------------------
Who is the Issuer   Silver Mines Limited ACN 107 452 942.    Section 2.1
 of this
 Prospectus?
----------------------------------------------------------------------------
What does the       SVL is an Australian silver exploration  Section 2.1
 Company do?         company which is listed on the ASX. The
                     Company is primarily focused on
                     exploring and developing its silver-
                     rich polymetallic assets in the New
                     England region of northern New South
                     Wales (NSW), Australia. The Company's
                     strategy is to develop its fully-owned
                     flagship Webbs Silver Project and, in
                     doing so, earn a near-term cash flow to
                     support further exploration of the
                     Company's tenements where demonstrated
                     potential exists for the discovery of
                     silver rich polymetallic
                     mineralisation.
----------------------------------------------------------------------------
What is the Offer?  Offer of 5,000,000 New Shares at an      Section 2.2
                     issue price of $0.047 per New Share to
                     raise $235,000 and 2,500,000 free
                     attaching New Options subject to
                     Shareholder Approval being obtained by
                     the Company
----------------------------------------------------------------------------
What is the purpose The Offer is being undertaken to raise   Section 2.3
 of the Offer?       funds to assist the Company with
                     achieving its exploration objectives,
                     increase the liquidity of the Shares
                     and Listed Options and to aid the
                     Company's growth.

                    The Prospectus has been issued in
                     respect of the Offer but also to
                     facilitate the secondary trading of a
                     total of 22,704,200 Shares and
                     18,295,072 Options issued by the
                     Company without a disclosure document.
----------------------------------------------------------------------------
What are the key    An investment in the Company should be   Section 4
 risks associated    regarded as speculative. In addition to
 with the Company    the general risks applicable to all
 and the Offer?      investments in listed securities, there
                     are specific risks associated with an
                     investment in the Company which are
                     summarized below and provided in
                     further detail in Section 4.

                    The Offer is subject to Shareholder
                     Approval. If Shareholder Approval is
                     not obtained by the Company, the
                     Company will not be able to issue the
                     New Shares and New Options.

                    Key risk factors affecting an investment
                     in the Company include:

                    - Changes to government regulations and
                     policy may have adverse impacts on the
                     development options available to the
                     Company and its projects.

                    - Economic conditions, both domestic and
                     global may affect the performance of
                     the Company.

                    - Exploration programs impact on the
                     environment. These impacts are
                     minimized by the Company's application
                     of best practice principles.
----------------------------------------------------------------------------
What is the key     Key financial information about the      Section 3.3
 financial           financial position, performance and
 information about   prospects of the Company is contained
 the financial       in the Annual Financial Report. A
 position,           summary of the Company's balance sheet
 performance and     is contained in Section 3.3.
 prospects of the
 Company?
----------------------------------------------------------------------------
Who are the         Mr David Sutton (Executive Chairman)     Section 5.8
 directors?         Mr Charles Straw (Managing Director)
                    Mr Malcolm Bird (Non-Executive Director)
----------------------------------------------------------------------------
What are the                                                 Section 5.11
 Directors' current
 shareholdings in
 the Company?
                    -----------------------------------------
                                Direct        Indirect
                    Director    Shares     %    Shares     %
                    -----------------------------------------
                    Sutton     522,000  0.3% 2,246,114  1.2%
                    -----------------------------------------
                    Straw      665,000  0.4%   563,532  0.3%
                    -----------------------------------------
                    Bird       593,000  0.3%   622,184  0.3%
                    -----------------------------------------

                    -----------------------------------------

----------------------------------------------------------------------------
What will be the                                             Section 3.2
 capital structure
 of the Company on
 completion of the
 Offer?
                    -----------------------------------------
                    Shares                            Number
                    -----------------------------------------
                    At the date of this
                     Prospectus                  186,701,291
                    -----------------------------------------
                    Issued under this Prospectus   5,000,000
                    -----------------------------------------
                    At completion of the Offer   191,701,291
                    -----------------------------------------

                    -----------------------------------------
                    Options                           Number
                    -----------------------------------------
                    At the date of this
                     Prospectus                   24,547,443
                    -----------------------------------------
                    Issued under this Prospectus   2,500,000
                    -----------------------------------------
                    At completion of the Offer    27,047,443
                    -----------------------------------------

----------------------------------------------------------------------------
Who can participate The Offer is open to Australian          Section 2.12
 in the Offer?      residents and institutions only.
----------------------------------------------------------------------------
How do I apply for  By submitting the valid Application Form Section 2.7
 New Shares and New attached to, or accompanying, this
 Options?           Prospectus in accordance with the
                    instructions set out on the Application
                    Form.
----------------------------------------------------------------------------
What is the         All decisions regarding the allocation   Section 2.8
 allocation policy? of Shares under the Offer will be made
                    by SVL.SVL reserves the right, in its
                    absolute discretion, to allot the New
                    Shares and New Options applied for under
                    any Application under the Offer in full
                    or to scale back any Application to
                    allot any lesser number or to decline
                    any Application. SVL may in its absolute
                    discretion give preference to certain
                    investors in accepting Applications
                    under the Offer.
----------------------------------------------------------------------------
Is there any        No brokerage, commission or stamp duty   Section 2.7
 brokerage,         is payable by Applicants on New Shares
 commission or      and New Options allotted under the
 stamp duty payable Offer.
 by the Applicants?
----------------------------------------------------------------------------
What is the         The Directors are not able to say when   Section 2.16
 Company's dividend and if dividends will be paid in the
 policy?            future, as the payment of any dividends
                    will depend on the future profitability,
                    financial position and cash requirements
                    of the Company.
----------------------------------------------------------------------------
What are the rights New Shares under the Offer will rank     Sections 5.1
 attaching to the   equally with existing Shares on issue.   and 5.2

New Shares and New  New Options under the Offer will rank
 Options?           equally with existing Options on issue.
----------------------------------------------------------------------------
Is the Offer        No                                       Section 2.5
 underwritten?
----------------------------------------------------------------------------
What are the costs                                           Section 5.13
 of the Offer?
                    -----------------------------------------
                                                           $
                    -----------------------------------------
                    ASIC lodgment fee               2,171.00
                    -----------------------------------------
                    ASX quotation fee               3,931.40
                    -----------------------------------------
                    Legal expenses                 35,000.00
                    -----------------------------------------
                    Printing, mailing and other
                     expenses                       7,000.00
                    -----------------------------------------
                    Total                          48,102.40
                    -----------------------------------------

----------------------------------------------------------------------------
How will the                                                 Section 3.1
 proceeds of the
 Offer be applied?

                     Description of Cash
                      Outflows Offer                      A$
                     1. Project Exploration       186,897.60
                     2. Working Capital                    0
                     3. Costs of Offer             48,102.40
                                               --------------
                     Total funds raised under
                      the Offer                   235,000.00
                                               --------------
                                               --------------

----------------------------------------------------------------------------
How can further     If you require assistance or additional  Section 2.15
 information be      copies of this Prospectus, please
 obtained?           contact the Company or the Share
                     Registry. For advice on the Offer, you
                     should speak to your stockbroker,
                     accountant or other professional
                     financial adviser.
----------------------------------------------------------------------------
Contact details     Refer to the Corporate Directory.        After the
                                                             Glossary
----------------------------------------------------------------------------

 

2. Details of the Offer

2.1 Background and nature of our business

The Issuer is Silver Mines Limited ACN 107 452 942.

SVL is an Australian silver exploration company which is admitted to the Official List of the ASX.

SVL is primarily focused on exploring and developing its silver-rich polymetallic assets in the New England
region of northern New South Wales (NSW), Australia.

The Company's strategy is to develop its fully-owned flagship Webbs Silver Project and, in doing so, earn a
near-term cash flow to support further exploration of the Company's tenements where demonstrated potential
exists for the discovery of silver rich polymetallic mineralisation.

The Company recently announced a 400% upgrade of its Indicated and Measured JORC resource to 969,000 tonnes
averaging 269g/t Ag for a contained resource of 8.4 million ounces of silver at its Webbs Silver Project.

SVL commenced a drilling program at the Webbs Silver Project in mid February 2013. This program is designed
to expand the existing resource base and follows the recent approval of Silver Mines Review of Environmental
Factors (REF) by the NSW Department of Trade and Investment - Resources and Energy Division (DRE).

2.2 The Offer

Pursuant to this Prospectus, the Company is offering 5,000,000 New Shares at an issue price of $0.047 (4.7
cents) per New Share to raise $235,000 along with 2,500,000 free attaching New Options on the basis of one
New Option for every two New Shares issued under the Offer.

The Offer is subject to Shareholder Approval. The Company is in the process of finalising a notice of meeting
pursuant to which it will seek Shareholder Approval for the issue of the New Shares and New Options under the
Offer. If Shareholder Approval is not obtained, the Company will not be able to issue the New Shares and New
Options.

Refer to Sections 5.1 and 5.2 for a summary of the rights attaching to the New Shares and New Options.

2.3 Purpose of the Offer

This Prospectus has been issued to:

- provide information on the Offer being made under this Prospectus in accordance with the requirements of
Part 6D.2 of the Corporations Act; and

- remove any secondary sale restrictions and facilitate future secondary trading of the Relevant Securities
(as defined below) in accordance with section 708A(11)(b) of the Corporations Act.

Secondary sale issues

By issuing this Prospectus, the Company is seeking to remove any secondary sale restrictions and facilitate
future secondary trading of the Relevant Securities (as defined below) post the date of this Prospectus in
accordance with section 708A(11)(b) of the Corporations Act.

A prospectus is required under the Corporations Act to enable persons who were issued the Relevant Securities
to on-sell those securities within 12 months of their issue without giving disclosure to investors.

On:

- 2 October 2012, the Company issued 6,942,972 Options pursuant to its share purchase plan, as announced to
the market on 31 August 2012. Following closure of the offer under the share purchase plan, there was a
shortfall of approximately 15.8 million Shares and 7.9 million Options;

- 1 November 2012, the Company issued 1,240,000 Shares and 620,000 Options, constituting part of the
shortfall of the offer under the share purchase plan;

- 5 November 2012, the Company issued 650,000 Shares and 325,000 Options, constituting part of the shortfall
of the offer under the share purchase plan; and

- 28 February 2013, the Company issued 20,814,200 Shares and 10,407,100 Options pursuant to the Company's
aggregate 25% capacity comprising its 15% entitlement under Listing Rule 7.1 and the approval granted by
Shareholders under Listing Rule 7.1A for an additional 10% capacity at its annual general meeting last year.

In aggregate, 22,704,200 Shares ("Relevant Shares") and 18,295,072 Options ("Relevant Options") (the Relevant
Shares and the Relevant Options together comprise the "Relevant Securities") have been issued since 2 October
2012. The Relevant Securities were issued without disclosure to investors under Part 6D.2 of the Corporations
Act and no cleansing notices under section 708A(5) of the Corporations Act were lodged with the ASX.

The Company is in the process of making an application to the Federal Court of Australia pursuant to section
1322 of the Corporations Act seeking permission for the late issue of a cleansing notice(s) in respect of the
Relevant Shares so as to mitigate any liability arising out of any secondary trading in the Relevant Shares
in the period prior to the issue of this Prospectus.

The Company is not able to remedy any secondary trading in the Relevant Options prior to the date of this
Prospectus. At the time of issue, the Relevant Options were not in a class of continuously quoted securities.
Therefore, the Company was not entitled to issue a cleansing notice in respect of the Relevant Options.

As at the date of this Prospectus, the Company has not received notice of any claims, actions or proceedings
initiated or brought by any person in respect of any loss or liability arising out of any secondary trades in
the Relevant Securities prior to the date of this Prospectus.

2.4 Opening and Closing Dates

The Company will accept Application Forms from 5 March 2013 ("Opening Date") until 5.00 pm (Sydney Time) on
12 March 2013 ("Closing Date") or such other date as the Directors in their absolute discretion shall
determine, subject to the requirements of the Listing Rules.

2.5 No Minimum Subscription and no underwriting

There is no minimum subscription for the Offer. The Offer is not underwritten.

2.6 Oversubscriptions

Oversubscriptions will not be accepted.

2.7 Application Form

An application for New Shares and New Options can only be made on the Application Form which accompanies this
Prospectus.

Cheques should be made in Australian currency and made payable to "Silver Mines Limited" and crossed "Not
Negotiable".

A completed Application Form must be accompanied by the Application Money and lodged in person or by post
with the Company at the following address.

 

Silver Mines Limited
Level 5
17-19 Bridge Street
Sydney NSW 2000

 

Applications must be received by 5:00pm (Sydney) time on 12 March 2013 (subject to the right of the Directors
to close the Offer earlier or extend the Closing Date without notice).

Full instructions on how to apply for New Shares and New Options and the completion of the Application Form
are set out on the reverse side of the Application Form. If you have any doubts on how to apply for New
Shares and New Options or complete the Application Form, please consult your stockbroker, accountant or other
professional adviser.

No brokerage or stamp duty is payable by Applicants under the Offer.

In the calculation of an Application and the number of the New Options to be issued, fractions will be
rounded up to the nearest whole number.

Acceptance of a completed Application Form by the Company creates a legally binding contract between the
Applicant and the Company for accepted securities.

If the Application Form is not completed correctly or is not signed, it may still be treated as valid. The
Directors' decision as to whether to treat the acceptance of an Application Form as valid and how to
construe, amend or complete the Application Form, is final.

2.8 Allotment of New Shares and New Options

The Company will proceed to allocate New Shares and New Options as soon as possible after Shareholder
Approval is obtained by the Company for the issue of the New Shares and New Options.

The Company reserves the right to allocate to any Applicant a lesser number of New Shares and New Options
than that applied for, or to decline any Application. Where no allocation is made to a particular Applicant
or the number of New Shares and New Options allocated is less than the number applied for by an Applicant,
surplus Application Monies will be returned to that Applicant within 30 days of the Closing Date. If
Shareholder Approval is not obtained by the Company for the issue of the New Shares and New Options,
Application Monies will be returned to Applicants. No interest will be paid on refunded Application Monies.

Successful Applicants will be notified in writing of the number of New Shares and New Options allocated to
them as soon as possible following the allocation being made after the Closing Date. It is the responsibility
of Applicants to confirm the number of New Shares and New Options allocated to them prior to trading in the
New Shares and New Options. Applicants who sell their Shares or Options before they receive notice of the
number of New Shares and New Options allocated to them do so at their own risk.

No New Shares or New Options will be allotted or issued on the basis of this Prospectus later than 13 months
after the date of issue of this Prospectus.

The Company reserves the right to accept or reject any Application and to allocate to any Applicant fewer New
Shares and New Options than applied for by that Applicant.

2.9 Application Monies held on Trust

All Application Monies received for the New Shares will be held in trust in a bank account maintained solely
for the purpose of depositing Application Monies received pursuant to this Prospectus until the New Shares
and New Options are issued. All Application Monies will be returned (without interest) if the New Shares and
New Options are not issued.

2.10 ASX Quotation

The Company will make an application to the ASX for Official Quotation of the New Shares and New Options.

If approval is not granted by the ASX for the Official Quotation of the New Shares and New Options within
three months after the date of this Prospectus (or such other period as the ASX may allow), the Company will
repay, within the time prescribed by the Corporations Act, all Application Monies received pursuant to this
Prospectus, without interest.

2.11 CHESS and Issuer Sponsorship

The Company operates an electronic CHESS sub-register and an electronic Issuer Sponsored sub-register. These
two sub-registers make up the Company's register of securities.

Under CHESS, Applicants will not receive a certificate but will receive a statement of their holding of
securities as soon as practicable after allotment.

If you are broker sponsored, you will receive a CHESS statement. The CHESS statement will set out the number
of New Shares and New Options issued under this Prospectus, provide details of your holder identification
number, the participant identification number of the sponsor and the terms and conditions applicable to the
New Shares and New Options.

If you are registered on the Issuer Sponsored subregister, you will receive an Issuer Sponsored statement.
Your Issuer Sponsored statement will contain the number of New Shares and New Options issued to you under
this Prospectus and your security holder reference number.

A CHESS statement or Issuer Sponsored statement will routinely be sent to Shareholders at the end of any
calendar month during which the balance of their shareholding changes. Shareholders may request a statement
at any other time; however, a charge may be made for additional statements.

2.12 Overseas Shareholders

The Prospectus contains an offer to Australian residents only and does not constitute an offer in any place
in which, or to any person to whom, it would not be lawful to make such an offer.

2.13 Risk Factors

An investment in New Shares and New Options should be regarded as speculative. In addition to the general
risks applicable to all investments in listed securities, there are specific risks associated with an
investment in the Company which are summarized below and provided in further detail in Section 4.

The Offer is subject to Shareholder Approval. If Shareholder Approval is not obtained by the Company, the
Company will not be able to issue the New Shares and New Options.

Key risk factors affecting an investment in the Company include:

- Changes to government regulations and policy may have adverse impacts on the development options available
to the Company and its projects.

- Economic conditions, both domestic and global may affect the performance of the Company.

- Exploration programs impact on the environment. These impacts are minimized by the Company's application of
best practice principles.

2.14 Taxation Implications

The Directors do not consider it appropriate to give investors advice regarding the taxation consequences of
subscribing for New Shares and New Options under this Prospectus.

The Company, its advisers and its officers do not accept any responsibility or liability for any such
taxation consequences to investors. Investors should consult their professional tax adviser in connection
with subscribing for New Shares and New Options under this Prospectus.

2.15 Enquiries Concerning Prospectus

Enquiries concerning the Application Form can be obtained by contacting Boardroom Pty Limited by telephone on
+61 2 9290 9600 or 1300 737 760.

Enquiries relating to this Prospectus should be directed to the Company Secretary by telephone on +61 2 9253
0900.

2.16 Dividend policy

The Directors are not able to say when and if dividends will be paid in the future, as the payment of any
dividends will depend on the future profitability, financial position and cash requirements of the Company.

3. Purpose and effect of the Offer on the Company

3.1 Use of Proceeds

The New Shares offered by this Prospectus, will result in an increase in the cash on hand of approximately
$186,897.60 after costs.

The funds raised under the Offer are proposed to be expended as follows:

 

Description of Cash Outflows Offer                                        A$
1. Project Exploration                                            186,897.60
2. Working Capital                                                         0
3. Costs of Offer                                                  48,102.40
                                                        --------------------
Total funds raised under the Offer                                235,000.00
                                                        --------------------
                                                        --------------------

 

Actual expenditure may differ significantly from the above estimates due to a number of factors including
market conditions, the development of new opportunities, the results obtained from the staged approach to
exploration, appraisal and development activities and other factors (including the risk factors outlined in
Section 4.

Unallocated working capital may be utilised by the Company to pay for cost overruns in budgeted expenditures
(if any), additional exploration and development expenditure, the acquisition of new resource opportunities
and in the administration of the Company.

Existing funds of the Company and proceeds from the Offer are currently the only sources of funds to finance
the exploration programs of the Company. The Company may require further capital from external sources for
further exploration and to cover administrative and corporate overheads. There can be no assurance that
additional financing will be available on terms acceptable to the Company to develop any newly discovered
mineral deposits or to finance further exploration.

Funds raised on exercise of the New Options will be used for further exploration and general working capital.

3.2 Effect on capital structure after Completion of the Offer

Shares

----------------------------------------------------------------------------
Shares                                            Number                   %
----------------------------------------------------------------------------
Shares on issue as at the date of
this Prospectus                              186,701,291               97.39
----------------------------------------------------------------------------
New Shares to be issued under this
Prospectus                                     5,000,000                2.61
----------------------------------------------------------------------------
Total Issued Shares on completion of
the Offer                                    191,701,291                 100
----------------------------------------------------------------------------


Options

----------------------------------------------------------------------------
Options                                           Number                   %
----------------------------------------------------------------------------
Options on issue as at the date of
 this Prospectus                              24,547,443               90.76
----------------------------------------------------------------------------
New Options to be issued under this
 Prospectus                                    2,500,000                9.24
----------------------------------------------------------------------------
Total Options on issue on completion
 of the Offer                                 27,047,443                 100
----------------------------------------------------------------------------

Note: As at the date of this Prospectus there are 10,500,000 Unlisted Options on issue.


3.3 Effect on the Company's balance sheet

Basis of Preparation

The pro-forma statement of financial position is based on the reviewed management prepared statement of
financial position at 31 December 2012.

To view the table associated with this section of the release, please open the link in a new window:

http://media3.marketwire.com/docs/SILVER03052013.jpg

The Pro-Forma Statement of Financial Position includes the following adjustments:

(a) Issue of 20,814,200 New Shares at 4.7 cents each to raise $978,267;

(b) Offer issue of 5,000,000 New Shares at 4.7 cents each to raise $235,000;

(c) Costs of issue of $150,000; and

(d) Operating costs to 28 February of $100,000.

The significant accounting policies upon which this Pro-Forma Statement of Financial Position are based are
stipulated in the audited financial report for year ended June 2012, accessible on the ASX Company
Announcements Platform using ASX Ticker Code SVL.

3.4 Effect on control

Assuming the exercise of the New Options, the effect on control of the Company as a result of the issue of
the New Shares and the underlying Shares the subject of the New Options will be minimal.

4. Risk factors

The New Shares and the underlying Shares the subject of the New Options offered under this Prospectus should
be considered speculative because of the nature of the Company's business.

Activities in the Company, as in any business, are subject to risks, which may impact on the Company's future
performance. The Company has implemented appropriate strategies, actions, systems and safeguards for known
risks however some are outside its control.

The Directors consider that the following summary, which is not exhaustive, represents some of the major risk
factors which investors need to be aware of in evaluating the Company's business and risks of increasing your
investment in the Company.

Investors should carefully consider the following factors in addition to the other information presented in
this Prospectus and consult their professional advisers before deciding whether to apply for the New Shares
and New Options pursuant to this Prospectus.

The principal risks include, but are not limited to, the following:

4.1 Risk of Shareholder Approval not being obtained

The Offer is subject to Shareholder Approval. If Shareholder Approval is not obtained by the Company, the
Company will not be able to issue the New Shares and New Options. If Shareholder Approval is not obtained,
the Company will refund Application Monies to Applicants in accordance with the Corporations Act.

4.2 Specific risks associated with the Company

(a) Operating Risks of the Company

The prospects of the Company must be considered in light of the considerable risks, expenses and difficulties
frequently encountered by companies in a similar stage of resource exploration and development activities as
the Company.

The amounts and timing of expenditures will depend on the progress of ongoing exploration and development,
the results of consultants' analyses and recommendations, the rate at which operating losses are incurred,
the execution of any joint venture agreements with strategic partners, and other factors, many of which are
beyond the Company's control.

The Company expects to incur losses unless and until such time as any new or current projects enter into
commercial production and generate sufficient revenues to fund their continuing operations. The development
of the new and current projects will require the commitment of substantial resources.

There can be no assurance that the Company will generate any revenues or achieve profitability.

(b) Reliance on Key Personnel

The resources business in which the Company is involved is reliance upon a number of directors and key
management personnel. The loss of any of these personnel could have a material adverse impact on the
resources business of the Company.

(c) Additional Requirements for Funding

The Company's funding requirements depend on numerous factors including the Company's ability to generate
income from its projects, the results of joint venture operations, future exploration and work programs and
the acquisition of new projects. It may require further funding in addition to current cash reserves to fund
exploration activities.

Additional equity financing, if available, may be dilutive to Shareholders and at lower prices than the
current market price. Debt financing, if available, may involve restrictions on financing and operating
activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce
the scope of its operations or anticipated expansion.

(d) Markets

The marketability of the Company's production depends in part upon the availability, proximity and capacity
of infrastructure such as ports, railways, pipelines and processing facilities.

Federal and state regulation of resources production and transportation, tax and energy policies, changes in
supply and demand and general economic conditions all could adversely affect the ability to produce and
market mineral commodities.

(e) Service Capacity

Exploration and development activities may be undertaken in locations that have limited or no spare service
capacity. There may be delays in securing equipment and personnel required to carry out the Company's planned
activities.

Due to the demand for equipment and personnel there may also be upward pressure on costs and mechanical
failure may result in delays.

Any of these factors may result in cost and time overruns which may have a material impact on the Company's
profitability and cash flows.

(f) Title to Tenements

The Company cannot guarantee that those Tenements in which it has an interest and which are still in the
application stage or require transfer will ultimately be granted or transferred in whole or in part pursuant
to the applicable legislation. There is also no guarantee that the Tenements will be granted or transferred
without undue delay or that the Company can economically comply with any conditions imposed on any granted
exploration permits.

The Company has an interest in applications for Tenements that have been applied for but not granted. In
order for these tenements to be granted the Company must satisfy the mining legislation.

There is no guarantee that the Tenements will be granted to the relevant parties, that they will be granted
without undue delay, that the Tenements will be transferred to the Company (when applicable) and the holder
can comply with any conditions imposed on or granted exploration permits.

The Company's mining exploration activities are dependent upon the maintenance (including renewal) of its
Tenements. Although the Company has no reason to think that these Tenements will not be renewed, there is no
assurance that such renewals will be given as a matter of course and there is no assurance that new
conditions will be imposed.

4.3 Mineral Industry Risks

(a) Exploration and development risks

The exploration for, and development of, mineral deposits involves a high degree of risk. Few properties
which are explored are ultimately developed into producing mines. Resource exploration and development is a
speculative business, characterised by a number of significant risks, including, among other things,
unprofitable efforts resulting not only from the failure to discover mineral deposits, but also from finding
mineral deposits that, although present, are insufficient in quantity and quality to return a profit from
production.

The marketability of minerals acquired or discovered by the Company may be affected by numerous factors that
are beyond the control of the Company and that cannot be accurately predicted, such as market fluctuations,
the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other
factors as government regulations, including regulations relating to royalties, allowable production,
importing and exporting of minerals, and environmental protection, the combination of which factors may
result in the Company not receiving an adequate return on investment capital.

Whether a mineral deposit will be commercially viable depends on a number of factors, which include, without
limitation, the particular attributes of the deposit, such as size, grade and proximity to infrastructure,
metal prices, which fluctuate widely, and government regulations, including, without limitation, regulations
relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and
environmental protection. The combination of these factors may result in the Company expending significant
resources (financial and otherwise) on a property without receiving a return. There is no certainty that
expenditures made by the Company towards the search and evaluation of mineral deposits will result in
discoveries of an economically viable mineral deposit.

The Company has relied on and may continue to rely on consultants and others for mineral exploration and
exploitation expertise. The Company believes that those consultants and others are competent and that they
have carried out their work in accordance with internationally recognized industry standards. However, if the
work conducted by those consultants or others is ultimately found to be incorrect or inadequate in any
material respect, the Company may experience delays or increased costs in developing its properties.

(b) Resource estimates

Ore Reserve and Mineral Resource estimates are expressions of judgment based on drilling results, past
experience with mining properties, knowledge, experience, industry practice and many other factors. Estimates
which are valid when made may change substantially when new information becomes available. Ore estimation is
an interpretive process based on available data and interpretations and thus estimations may prove to be
inaccurate.

The actual quality and characteristics of ore deposits cannot be known until mining takes place, and will
almost always differ from the assumptions used to develop resources. Further, Ore Reserves are valued based
on future costs and future prices and consequently, the actual Ore Reserves and Mineral Resources may differ
from those estimated, which may result in either a positive or negative effect on operations.

(c) Payment obligations

Under the exploration permits and licences and certain other contractual agreements to which the Company is
or may in the future become party, the Company is or may become subject to payment and other obligations. In
particular, the permit holders are required to expend the funds necessary to meet the minimum work
commitments attaching to the permits and licences. Failure to meet these work commitments will render the
permit liable to be cancelled.

Further, if any contractual obligations are not complied with when due, in addition to any other remedies
which may be available to other parties, this could result in dilution or forfeiture of interests held by the
Company.

(d) Operating risks

The operations of the Company may be affected by various factors including failure to locate or identify
mineral deposits, failure to achieve predicted grades in exploration or mining, operational and technical
difficulties encountered in mining, difficulties in commissioning and operating plant and equipment,
mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction
costs, adverse weather conditions, industrial and environmental accidents, industrial disputes and unexpected
shortages or increases in the costs of consumables, spare parts, plant and equipment, fire, explosions and
other incidents beyond the control of the Company.

These risks and hazards could also result in damage to, or destruction of, production facilities, personal
injury, environmental damage, business interruption, monetary losses and possible legal liability. While the
Company currently intends to maintain insurance within ranges of coverage consistent with industry practice,
no assurance can be given that the Company will be able to obtain such insurance coverage at reasonable rates
(or at all), or that any coverage it obtains will be adequate and available to cover any such claims.

(e) Commodity price volatility

Metal prices fluctuate and are affected by numerous factors beyond the control of the Company.

These factors include world demand for minerals and metals, forward selling by producers, and production cost
levels in major mineral-producing regions.

Moreover, commodity prices are also affected by macroeconomic factors such as expectations regarding
inflation, interest rates and global and regional demand for, and supply of, the metal as well as general
global economic conditions. These factors may have an adverse effect on the Company's exploration,
development and production activities, as well as on its ability to fund those activities.

(f) Insurances

Insurance of all risks associated with exploration and production is not always available and, where it is
available, the cost may be high. The business of the Company is subject to a number of risks and hazards
generally, including adverse environmental conditions, industrial accidents, labour disputes, unusual or
unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment
and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could
result in damage to mineral properties or production facilities, personal injury or death, environmental
damage to properties of the Company or others, delays in mining, monetary losses and possible legal
liability.

Although the Company maintains insurance to protect against certain risks in such amounts as it considers to
be reasonable, its insurance will not cover all the potential risks associated with its operations and
insurance coverage may not continue to be available or may not be adequate to cover any resulting liability,
particularly as the Company is seeking to acquire new projects which are located in other jurisdictions or
involve a new commodity.

It is not always possible to obtain insurance against all such risks and the Company may decide not to insure
against certain risks because of high premiums or other reasons. Moreover, insurance against risks such as
environmental pollution or other hazards as a result of exploration and production is not generally available
to the Company or to other companies in the mining industry on acceptable terms.

Losses from these events may cause the Company to incur significant costs that could have a material adverse
effect upon its financial performance and results of operations.

4.4 Environmental risks

The operations and activities of the Company are subject to regulations concerning the environment.

The Government and other authorities that administer and enforce environmental laws determine these
requirements. As with all exploration projects and mining operations, the Company's activities are expected
to have an impact on the environment, particularly if mine development proceeds. The Company intends to
conduct its activities in an environmentally responsible manner and in accordance with applicable laws.

The cost and complexity of complying with the applicable environmental laws and regulations may prevent the
Company from being able to develop potentially economically viable mineral deposits.

Although the Company believes that it is in compliance in all material respects with all applicable
environmental laws and regulations, there are certain risks inherent to its activities, such as accidents or
other unforeseen circumstances, which could subject the Company to extensive liability.

4.5 General Risks

(a) Securities investments

There are risks associated with any securities investment and the prices at which the Shares trade may
fluctuate in response to a number of factors.

Furthermore, the stock market, and in particular the market for mining and exploration companies, has
experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the
operating performance of such companies. There can be no guarantee that these trading prices will be
sustained. These factors may materially affect the market price of the Shares regardless of the Company's
operational performance.

(b) Share market conditions

Share market conditions may affect the value of Shares regardless of the Company's operating performance.
Share market conditions are affected by many factors such as:

- general economic outlook;

- interest rates and inflation rates;

- changes in investor sentiment toward particular market sectors;

- global media reports;

- the demand for, and supply of, capital; and

- other external factors whether real or perceived by the market.

The market price of the Shares may fall as well as rise and may be subject to varied and unpredictable
influences on the market for equities in general and resource stocks in particular.

Neither the Company nor the Directors warrant the future performance of the Company, or any return on an
investment in the Company.

(c) Economic Risk

Changes in the general economic climate in which the Company operates may adversely affect the financial
performance of the Company. Factors that may contribute to that general economic climate include the level of
direct and indirect competition against the Company, industrial disruption, the rate of growth of gross
domestic product in Australia, or any other country in which the Company may operate interest rates and the
rate of inflation.

(d) Changes in Government Policies and Legislation

Any material adverse changes in government policies or legislation of Australia or any other country where
the Company may acquire economic interests may affect the viability and profitability of the Company.

4.6 Investment Speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by
investors in the Company.

The above factors, and others not specifically referred to above, may in the future materially affect the
financial performance of the Company and the value of the New Shares and New Options offered under this
Prospectus.

Therefore, the New Shares and New Options to be issued pursuant to this Prospectus carry no guarantee with
respect to the payment of dividends, returns of capital or the market value of those securities. Potential
investors should consider that the investment in the Company is speculative and should consult their
professional adviser before deciding whether to apply for New Shares and New Options pursuant to this
Prospectus.

5. Additional information

5.1 Rights attaching to the Shares

The New Shares to be issued pursuant to this Prospectus and the Relevant Shares are ordinary shares and will,
as from their allotment, rank equally in all respects with all ordinary shares in the Company.

The rights attaching to the New Shares and the Relevant Shares arise from a combination of the Company's
Constitution, statute and general law. Copies of the Company's Constitution are available for inspection
during business hours at its registered office. The Constitution has been lodged with ASIC.

A summary of the more significant rights is set out below.

(a) Reports and Notices

Shareholders are entitled to receive all notices, reports, accounts and other documents required to be
furnished to shareholders under the Company's Constitution, the Corporations Act and the Listing Rules.

(b) General Meetings

Directors may call a meeting of members whenever they think fit. Members may call a meeting as provided by
the Corporations Act. All members are entitled to a notice of meeting. A quorum for a meeting of members is
three eligible voters.

The Company will hold annual general meetings in accordance with the Corporations Act and the Listing Rules.

Shareholders are entitled to be present in person, or by proxy, attorney or representative (in the case of a
company) to speak and to vote at general meetings of the Company.

(c) Voting

Subject to any rights or restrictions at the time being attached to any class or classes of shares, at a
general meeting of the Company on a show of hands, every ordinary Shareholder present in person, or by proxy,
attorney or representative (in the case of a company) has one vote and upon a poll, every Shareholder present
in person, or by proxy, attorney or representative (in the case of a company) has one vote for any Share held
by the Shareholder. In the case of an equality of votes, the chairperson has a casting vote.

A poll may be demanded by the chairperson of the meeting, any two Shareholders entitled to vote in person or
by any one or more Shareholders holding not less than 5% of the total voting rights of all Shareholders
having the right to vote.

(d) Dividends

Subject to the Corporations Act, the Listing Rules and any rights or restrictions attached to a class of
shares, the Company may pay dividends as the Directors resolve.

The Directors may determine the method and time for payment of the dividend.

(e) Winding Up

Subject to any rights or restrictions attached to a class of shares, on a winding up of the Company, any
surplus must be divided among the Shareholders in the proportion to the shares held by them. Subject to any
rights or restrictions attached to a class of Shares, on a winding up of the Company, the liquidator may,
with the sanction of a special resolution of the Shareholders:

(i) distribute among Shareholders the whole or any part of the property of the Company; and

(ii) vest any part of the assets of the Company in a trustee upon such trust for the benefit of the members.

(f) Transfer of Shares

Generally, Shares in the Company are freely transferable, subject to formal requirements, and to the
registration of the transfer not resulting in a contravention of, or failure to observe, the provisions of a
law of Australia.

(g) Issue of Further Shares

The Directors may, subject to any restrictions imposed by the Constitution, the Corporations Act and the
Listing Rules, allot, issue and grant Options over further Shares, on such terms and conditions as they see
fit.

(h) Directors

The existing Directors may appoint a new Director to fill a casual vacancy or as an addition to the Board.

Any such Director must retire at the next following annual general meeting of the Company (at which meeting
he or she may be eligible for election as a Director).

The Constitution contains provisions relating to the rotation and election of directors. No Director other
than the Managing Director may hold office later than the third annual general meeting after his or her
appointment or election without submitting himself or herself for re-election.

(i) Variation of Shares and Rights Attaching to Shares

Shares may be converted or cancelled with member approval and the Company's share capital may be reduced in
accordance with the requirements of the Corporations Act.

(j) Changes to the Constitution

The Company's Constitution can only be amended by a special resolution passed by at least three quarters of
the members present and voting at a general meeting of the Company. At least 28 days' written notice
specifying the intention to propose the resolution as a special resolution must be given.

(l) Listing Rules

Provided the Company remains admitted to the Official List of the ASX, then despite anything in the
Constitution, no act may be done that is prohibited by the Listing Rules, and authority is given for acts
required to be done by the Listing Rules. If as a result of an amendment to the Listing Rules, there is an
inconsistency between the Constitution and the Listing Rules, the Company shall, subject to the Corporations
Act, do all things necessary to change the Constitution to remove the inconsistency as soon as possible and
in any event, at the first general meeting of the Company held after the date on which the relevant amendment
the Listing Rules comes into operation.

5.2 Rights Attaching to New Options

The New Options under this Prospectus will have an exercise price of $0.10 and will lapse at 5.00 pm, (AEST)
on 13 November 2013;

The remaining terms of the New Options are as follows:

(a) Each New Option shall be issued for no consideration.

(b) Each New Option entitles the holder to subscribe for one Share in the Company upon the payment of the
exercise price per Share subscribed for.

(c) The New Options will vest immediately.

(d) Each New Option shall entitle the option holder to be issued one Share upon exercise of the Option;

(e) Each New Option may be exercised by delivering to the registered office of the Company a notice in
writing during the period referred to in condition (a) stating the intention of the option holder to exercise
a specified number of Options, accompanied by an option certificate, if applicable, and a cheque made payable
to the Company for the subscription monies due, subject to the funds being duly cleared funds. The exercise
of only a portion of the Options held does not affect the holder's right to exercise the balance of any
Options remaining;

(f) All Shares issued on exercise of the Options will rank pari passu in all respects with the Company's then
issued Shares. Subject to meeting the requirements of the Listing Rules, the Company will seek Official
Quotation of the New Options;

(g) The New Options are transferable;

(h) Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise
of that Option as at the date of the receipt;

(i) There are no participating rights or entitlements inherent in the Options and holders will not be
entitled to participate in new issues of securities offered to Shareholders of the Company during the
currency of the Options. However, the Company will ensure that for the purpose of determining entitlements to
any such issue, the record date will be at least 10 Business Days after the issue is announced so as to give
holders the opportunity to exercise their Options before the date for determining entitlement to participate
in any issue;

(j) Shares allotted pursuant to the exercise of the New Options will be allotted following receipt of all the
relevant documents and payment and will rank equally with existing issued Shares; and

(k) In the event of a reconstruction (including consolidations, subdivision, reduction or return) of the
issued capital of the Company, all rights of the option holder shall be reconstructed in accordance with the
Listing Rules.

5.3 Nature of this Prospectus

This Prospectus is issued under the special content rules for continuously quoted securities in Section 713
of the Corporations Act. This enables listed disclosing entities, such as the Company to issue a prospectus
for continuously quoted securities with modified disclosure requirements if they satisfy certain
requirements.

The information in this Prospectus principally concerns the terms and conditions of the Offer and the
information reasonably necessary to make an informed assessment of:

(a) the effect of the Offer on the Company;

(b) the rights and liabilities attaching to the New Shares offered pursuant to this Prospectus; and

(c) the rights and liabilities attaching to the free attaching New Options and the underlying Shares the
subject of the New Options.

This Prospectus is intended to be read in conjunction with publicly available information in relation to the
Company which has been notified to ASX and does not include all of the information included in a prospectus
for an initial public offering of securities in an entity that is not already listed on a stock exchange.
Investors should therefore also have regard to the other publicly available information in relation to the
Company before making a decision on whether or not to invest in the Company.

5.4 Continuous Reporting and Disclosure Obligations

The Company is listed on the ASX - its Shares are quoted on the ASX under the code "SVL" and its Options are
quoted on the ASX under the code "SVLO". The New Shares and New Options to be issued under this Prospectus
are each in a class of securities that were quoted on the ASX at all time in the three months before the
issue of this Prospectus.

The Company is a "disclosing entity" for the purposes of the Corporations Act. As such, it is subject to
regular reporting and disclosure obligations, which require it to disclose to the ASX any information of
which it is or becomes aware concerning the Company and which a reasonable person would expect to have a
material effect on the price or value of securities of the Company.

5.5 Copies of Documents

Copies of documents lodged with ASIC in relation to the Company may be obtained from, or inspected at, an
office of ASIC.

The Company will provide a copy of the Annual Report for the financial year ended 30 June 2012 to any person
on request, prior to the Closing Date.

The Company will also provide a copy of all documents used to notify ASX of information relating to the
Company under the provisions of the Listing Rules since the Company lodged its most recent Annual Report on
19 October 2012 free of charge to any person on request, prior to the Closing Date.

A list of those documents for the period from 19 October 2012 to the date of lodgment of this Prospectus is
set out below

 

Date Lodged          Subject of Announcement
19 October 2012      Annual Financial Report FY12
19 October 2012      Notice of Annual General Meeting
31 October 2012      Quarterly Cash Flow
31 October 2012      Quarterly Activities Report
1 November 2012      Placement Lapse of Options
1 November 2012      Sulphide Intersections on Regional Silver Targets
5 November 2012      Appendix 3B
6 November 2013      Quotation of Options
19 November 2012     Shareholder presentation AGM November 2012
19 November 2012     Results of Meeting
14 December 2012     Webbs Silver Project Update
31 January 2013      Quarterly Cash Flow
31 January 2013      Quarterly Activities Report
1 February 2013      Drill Intersections on Silver Mines' Regional Targets
12 February 2013     Trading Halt
14 February 2013     Placement Announcement and S708(A) Notice
14 February 2013     Appendix 3B
15 February 2013     Amended Appendix 3B
25 February 2013     Drilling Program Commenced at Webbs Silver Project
25 February 2013     Silver Mines to Withdraw from ISDX
25 February 2013     Trading Halt
25 February 2013     Request for Trading Halt
27 February 2013     Suspension from Official Quotation
4 March 2013         Appendix 3B

 

Please note that all of the above documents are available from the ASX webpage at www.asx.com.au using ASX
code "SVL".

The following documents are available for inspection throughout the application period of this Prospectus
during normal business hours at the principal office of the Company (details are provided in the Corporate
Directory):

(a) this Prospectus; and

(b) the Company's Constitution.

5.6 Information Excluded from Continuous Disclosure Notices

There is no information which has been excluded from a continuous disclosure notice in accordance with the
Listing Rules, and which is required to be set out in this Prospectus.

5.7 Determination by ASIC

ASIC has not made a determination which would prevent the Company from relying on section 713 of the
Corporations Act in issuing the New Shares and New Options under this Prospectus.

5.8 Board and management

The Board of the Company comprises the following Directors:

- Mr David Sutton (Executive Chairman);

- Mr Charles Straw (Managing Director); and

- Mr Malcolm Bird (Non-Executive Director).

Senior management includes:

- Mr David Hobby (Exploration Manager); and

- Mr Kevin Lynn (Company Secretary).

Information about the qualifications and experience of the Directors and senior management is available on
the Company's website www.silverminesltd.com.au.

5.9 Corporate Governance

The Company has adopted systems of control and accountability as the basis for the administration of
corporate governance. The Board is committed to administering the Company's corporate governance policies and
procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with
the Company's needs.

To the extent that they are applicable to the Company, the Board has adopted the ASX's Corporate Governance
Principles and Recommendations. As the Company's activities develop in size, nature and scope, the size of
the Board and the implementation of additional corporate governance structures will be given further
consideration.

A summary of the Company's corporate governance policies is available on the Company's website
www.silverminesltd.com.au.

5.10 Market Price of Shares

The lowest and highest recorded closing market sale prices of the Shares quoted on the ASX during the three
month period immediately prior to the date of this Prospectus were 4.5 cents on 25 February 2013 and 5.7
cents on 12 December 2012 respectively.

The closing market sale price of the Shares quoted on the ASX on the last day that trading took place in the
Shares prior to the date of this Prospectus was 4.7 cents on 4 March 2013.

5.11 Directors' interests

(a) Directors'holdings

Except as disclosed in this Prospectus, no Director (whether individually or in consequence of a Director's
association with any company or firm or in any material contract entered into by the Company) has now, or has
had, in the two year period ending on the date of this Prospectus, any interest in:

- the formation or promotion of the Company; or

- property acquired or proposed to be acquired by the Company in connection with its formation or promotion
or the Offer; or

- the Offer.

Set out in the table below are details of Directors' relevant interests in the securities of the Company.

 

----------------------------------------------------------------------------
                                                                 Performance
                              Shares             Options              Rights
----------------------------------------------------------------------------
David Sutton               2,768,114           2,000,000           1,000,000
----------------------------------------------------------------------------
Malcolm Bird               1,215,184           2,041,667           1,000,000
----------------------------------------------------------------------------
Charles Straw              1,228,532           2,000,000           1,000,000
----------------------------------------------------------------------------

 

Set out in the table below are details of Directors' direct and indirect interests in the Shares.

 

                  Direct        %    Indirect         %       Total        %
David Sutton     522,000     0.3%   2,246,114      1.2%   2,768,114     1.5%
Malcolm Bird     593,000     0.3%     622,184      0.3%   1,215,184     0.6%
Charles Straw    665,000     0.4%     563,532      0.3%   1,228,532     0.7%

 

(b) Remuneration of Directors

Except as set out below and otherwise disclosed in this Prospectus, no amounts of any kind (whether in cash,
Shares, Options or otherwise) have been paid or agreed to be paid to any Director or to any company or firm
with which a Director is associated to induce him to become, or to qualify as, a Director or otherwise for
services rendered by him or his company or firm with which the Director is associated in connection with the
formation or promotion of the Company or the Offer.

 

----------------------------------------------------------------------------
                              Remuneration per annum in $
----------------------------------------------------------------------------
David Sutton                  48,000.00 (excl GST)
----------------------------------------------------------------------------
Malcolm Bird                  30,000.00 (excl GST)
----------------------------------------------------------------------------
Charles Straw                 220,000.00 (incl GST)
----------------------------------------------------------------------------

 

Information regarding the remuneration received by Directors for the preceding two financial years can be
found in the Annual Financial Report.

Mr Straw has entered into a services agreement with the Company with respect to his engagement as Managing
Director.

(c) Other interests

The Company has entered into Deeds of Indemnity, Access and Insurance on standard terms with each of its
current Directors. Pursuant to the deeds, the Company indemnifies the Directors against certain liabilities
and legal expenses incurred by them whilst acting as Directors, and agrees to procure insurance in relation
to certain risks they are exposed to as Directors.

5.12 Interests of Named Persons

Except as disclosed in this Prospectus, no expert, promoter or other person named in this Prospectus as
performing a function in a professional, advisory or other capacity in connection with the preparation or
distribution of the Prospectus, nor any firm in which any of those persons is or was a partner nor any
company in which any of those persons is or was associated with, has now, or has had, in the two year period
ending on the date of this Prospectus, any interest in:

(a) the formation or promotion of the Company;

(b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion
or the Offer; or

(c) the Offer.

Except as disclosed in this Prospectus, no amounts of any kind (whether in cash, Shares, Options or
otherwise) have been paid or agreed to be paid to any expert, promoter or any other person named in this
Prospectus as performing a function in a professional advisory or other capacity in connection with the
preparation or distribution of the Prospectus, or to any firm in which any of those persons is or was a
partner or to any company in which any of those persons is or was associated with, for services rendered by
that person in connection with the formation or promotion of the Company or the Offer.

HWL Ebsworth Lawyers have acted as solicitors to the Company in relation to the preparation of this
Prospectus and will be paid fees of approximately $35,000 (excl GST).

Boardroom Limited has been appointed to conduct the Company's share registry functions and to provide
administrative services in respect to the processing of Applications received pursuant to this Prospectus,
and will be paid for these services on standard industry terms and conditions.

5.13 Expenses of the Offer

The estimated expenses of the Offer are as follows:

 

----------------------------------------------------------------------------
                                                                           $
----------------------------------------------------------------------------
ASIC lodgment fee                                                   2,171.00
----------------------------------------------------------------------------
ASX quotation fee                                                    3931.40
----------------------------------------------------------------------------
Legal expenses                                                     35,000.00
----------------------------------------------------------------------------
Printing, mailing and other expenses                                7,000.00
----------------------------------------------------------------------------
Total                                                              48,102.40
----------------------------------------------------------------------------

 

5.14 Litigation

The Directors are not aware of any litigation of a material nature pending or threatened involving the
Company.

5.15 Consents

Both HWL Ebsworth Lawyers and Boardroom Limited:

- do not make, or purport to make, any statement in this Prospectus or on which a statement made in this
Prospectus is based, other than as specified in this Section 5.15; and

- to the maximum extent permitted by law, expressly disclaim and take no responsibility for any part of this
Prospectus other than a reference to their names and a statement included in this Prospectus with their
consent as specified in this Section 5.15.

HWL Ebsworth has consented to be named in this Prospectus as the solicitors to the Offer and has not
withdrawn such consent prior to the lodgment of this Prospectus.

Boardroom Limited has consented to be named in this Prospectus as the Company's Share Registry and has not
withdrawn such consent prior to the lodgment of this Prospectus.

5.16 Governing Law

This Prospectus and the contracts that arise from the acceptance of the Applications are governed by the laws
applicable in New South Wales and each Applicant submits to the exclusive jurisdiction of the courts of New
South Wales.

5.17 Electronic Prospectus

Under Class Order 00/44 ASIC has exempted compliance with certain provisions of the Corporations Act to allow
distribution of an electronic Prospectus on the basis of a paper prospectus lodged with ASIC and the
publication of notices referring to an electronic Prospectus, subject to compliance with certain provisions.

6. Authorisation

The Directors have made all reasonable enquiries and on that basis have reasonable grounds to believe that
any statements made by the Directors in this Prospectus are not misleading or deceptive and that in respect
of any other statements made in the Prospectus by persons other than the Directors, the Directors have made
reasonable enquiries and on that basis have reasonable grounds to believe that persons making the statement
or statements were competent to make such statements, those persons have given their consent to the
statements being included in this Prospectus in the form and context in which they are included and have not
withdrawn that consent before lodgment of this Prospectus with ASIC or, to the Directors' knowledge, before
the issue of the New Shares and New Options pursuant to this Prospectus.

This Prospectus has been prepared on the basis that certain matters may be reasonably expected to be known to
likely investors or their professional advisers.

Each of the Directors has consented to the lodgment of this Prospectus in accordance with Section 720 of the
Corporations Act and has not withdrawn that consent.

 

Charles Straw
Managing Director
Date: 5 March 2013

 

7. Glossary

These definitions are provided to assist persons in understanding some of the expressions used in this
Prospectus.

 


----------------------------------------------------------------------------
Term                           Definition
----------------------------------------------------------------------------
$                              Australian dollars.
----------------------------------------------------------------------------
Annual Financial Report        the financial report lodged by the Company in
                               respect of the financial year ended 30 June
                               2012.
----------------------------------------------------------------------------
Applicant                      a person applying for New Shares and New
                               Options under this Prospectus.
----------------------------------------------------------------------------
Application                    the lodgement of an Application Form.
----------------------------------------------------------------------------
Application Form               the form of application for New Shares and
                               New Options attached to this Prospectus.
----------------------------------------------------------------------------
Application Monies             the Offer Price multiplied by the number of
                               New Shares applied for.
----------------------------------------------------------------------------
ASIC                           Australian Securities and Investment
                               Commission.
----------------------------------------------------------------------------
Associate                      has the meaning ascribed to that term in the
                               Corporations Act.
----------------------------------------------------------------------------
ASX                            ASX Limited ACN 008 624 691 or the securities
                               market operated by the ASX as the case may
                               be.
----------------------------------------------------------------------------
Board                          the board of Directors of the Company.
----------------------------------------------------------------------------
CHESS                          Clearing House Electronics Sub-register
                               System.
----------------------------------------------------------------------------
Closing Date                   in relation to the Offer, the last day on
                               which valid Application Forms may be
                               accepted, as set out in Section 2.4 of this
                               Prospectus.
----------------------------------------------------------------------------
Company                        Silver Mines Limited ACN 107 452 942.
----------------------------------------------------------------------------
Constitution                   the constitution of the Company.
----------------------------------------------------------------------------
Corporations Act               the Corporations Act 2001 (Cth).
----------------------------------------------------------------------------
Directors                      the directors of the Company.
----------------------------------------------------------------------------
Expiry Date                    the date on which this Prospectus expires.
----------------------------------------------------------------------------
Financial Information          Forecast and Historical Financial Statements.
----------------------------------------------------------------------------
Issuer Sponsored               securities issued by an issuer that are held
                               in uncertificated form without the holder
                               entering into a sponsorship agreement with a
                               broker or without the holder being admitted
                               as an institutional participant in CHESS.
----------------------------------------------------------------------------
Listed Option                  an Option that is Officially Quoted on the
                               ASX.
----------------------------------------------------------------------------
Listing Rules                  the official listing rules of ASX.
----------------------------------------------------------------------------
New Option                     an Option the subject of the Offer.
----------------------------------------------------------------------------
New Share                      a share the subject of the Offer.
----------------------------------------------------------------------------
Offer                          the invitation to participate in the issuance
                               of New Shares and New Options by the Company.
----------------------------------------------------------------------------
Offer Period                   the Period commencing on the Opening Date and
                               ending on the Closing Date.
----------------------------------------------------------------------------
Offer Price                    $0.047 per New Share.
----------------------------------------------------------------------------
Official List                  the official list of entities that ASX has
                               admitted and not removed.
----------------------------------------------------------------------------
Official Quotation             admission to quotation on the ASX and
                               Officially Quoted has a corresponding
                               meaning.
----------------------------------------------------------------------------
Opening Date                   the date the Offer opens, being 5 March 2013
                               or such other date determined by the Board.
----------------------------------------------------------------------------
Options                        an option to subscribe for one unissued Share
                               in the Company.
----------------------------------------------------------------------------
Prospectus                     this document.
----------------------------------------------------------------------------
Relevant Options               has the meaning ascribed to that term in
                               Section 2.3.
----------------------------------------------------------------------------
Relevant Securities            has the meaning ascribed to that term in
                               Section 2.3.
----------------------------------------------------------------------------
Relevant Shares                has the meaning ascribed to that term in
                               Section 2.3.
----------------------------------------------------------------------------
Share                          a fully paid ordinary share in SVL.
----------------------------------------------------------------------------
Share Registry                 Boardroom Limited.
----------------------------------------------------------------------------
Shareholder                    a shareholder of SVL.
----------------------------------------------------------------------------
Shareholder Approval           the approval of Shareholders for the issue of
                               the New Shares and New Options under the
                               Offer pursuant to Listing Rule 7.1.
----------------------------------------------------------------------------
SVL                            Silver Mines Limited ACN 107 452 942.
----------------------------------------------------------------------------

Silver Mines Limited
Corporate Directory

Directors                              Bank
David Sutton (Non -Executive Chairman) National Australia Bank Limited
Malcolm Bird (Non-Executive Director)  255 George St
Charles Straw (Managing Director)      Sydney NSW 2000

Company Secretary                      Share Registry
Kevin Martin Lynn                      Boardroom Limited
                                       Level 7,
Australian Company Number              207 Kent Street
107 452 942                            Sydney, NSW, 2000

Registered Office                      Company's Solicitor
Level 5                                HWL Ebsworth Lawyers
17-19 Bridge Street                    Level 14, Australia Square
Sydney, NSW, 2000                      264-278 George Street
Phone: +61 2 9253 0900                 Sydney, NSW 2000
Fax: +61 2 9253 0901
E-mail: info@silverminesltd.com.au
Website: www.silverminesltd.com.au

 

To view the application form, please open the link in a new window:

http://media3.marketwire.com/docs/SilverProspectusAPP.pdf

Silver Mines Limited

ACN 107 452 942





                                                                                             Appendix 3B
                                                                                  New issue announcement
--------------------------------------------------------------------------------------------------------
                                                                                                       
                                                                       Rule 2.7, 3.10.3, 3.10.4, 3.10.5
                                              Appendix 3B
                                                   
                                        New issue announcement,
                          application for quotation of additional securities
                                             and agreement

Information or documents not available now must be given to ASX as soon as available.  Information and
documents given to ASX become ASX's property and may be made public.

Introduced  01/07/96   Origin:  Appendix 5  Amended 01/07/98, 01/09/99, 01/07/00,  30/09/01,  11/03/02,
            01/01/03, 24/10/05, 01/08/12


Name of entity
--------------------------------------------------------------------------------------------------------
Silver Mines Limited
--------------------------------------------------------------------------------------------------------

ABN
----------------------------------
107 452 942
----------------------------------

We (the entity) give ASX the following information.


Part 1 - All issues
You must complete the relevant sections (attach sheets if there is not enough space).

                                          --------------------------------------------------------------
1     +Class  of  +securities issued  or  Ordinary and Options
      to be issued
                                          --------------------------------------------------------------
                                          
                                          --------------------------------------------------------------
2     Number   of +securities issued  or  5,000,000 Fully Paid Ordinary Shares
      to   be   issued  (if  known)   or  2,500,000 Options
      maximum   number  which   may   be
      issued
                                          --------------------------------------------------------------
                                          
                                          --------------------------------------------------------------
3     Principal     terms     of     the  Fully Paid Ordinary Shares: and
      +securities   (eg,   if   options,  
      exercise  price and  expiry  date;  Listed  Options, exercise price 10 cents and expiry
      if  partly  paid +securities,  the  13 November 2013.
      amount  outstanding and due  dates  
      for   payment;   if   +convertible  
      securities,  the conversion  price  
      and dates for conversion)           
                                          --------------------------------------------------------------
                                          
                                            
                                          --------------------------------------------------------------
4     Do  the  +securities rank  equally   Yes
      in  all respects from the date  of
      allotment with an existing  +class
      of quoted +securities?
      
      If  the  additional securities  do
      not rank equally, please state:
      *   the  date  from  which
          they do
      *   the  extent  to  which
          they  participate for the next
          dividend,  (in the case  of  a
          trust, distribution) or interest
          payment
      *   the  extent  to  which
          they do not rank equally, other
          than  in relation to the  next
          dividend,   distribution    or
          interest payment
                                           
                                          --------------------------------------------------------------
5     Issue price or consideration         $0.047
                                          --------------------------------------------------------------
                                           
                                          --------------------------------------------------------------
6     Purpose of the issue                 Release of Prospectus to the market.
      (If  issued  as consideration  for
      the    acquisition   of    assets,
      clearly identify those assets)
      
      
      
      
                                          --------------------------------------------------------------
      
                                          --------------------------------------------------------------
6a    Is  the entity an +eligible entity   N/A
      that  has obtained security holder
      approval under rule 7.1A?
      
      If  Yes, complete sections 6b - 6h
      in  relation  to  the  +securities
      the  subject of this Appendix  3B,
      and comply with section 6i
                                          --------------------------------------------------------------
                                          
                                          --------------------------------------------------------------
6b    The   date  the  security   holder   N/A
      resolution  under  rule  7.1A  was
      passed
                                          --------------------------------------------------------------
                                           
                                          --------------------------------------------------------------
6c    Number   of   +securities   issued   N/A
      without  security holder  approval
      under rule 7.1
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
6d    Number of +securities issued  with   N/A
      security  holder  approval   under
      rule 7.1A
                                          --------------------------------------------------------------
                                           
                                          --------------------------------------------------------------
6e    Number of +securities issued  with   N/A
      security  holder  approval   under
      rule   7.3,  or  another  specific
      security  holder approval (specify
      date of meeting)
                                          --------------------------------------------------------------
                                           
                                          --------------------------------------------------------------
6f    Number of securities issued  under   N/A
      an exception in rule 7.2
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
6g    If  securities issued  under  rule   N/A
      7.1A,  was  issue price  at  least
      75%  of  15 day VWAP as calculated
      under  rule  7.1A.3?  Include  the
      issue   date   and  both   values.
      Include  the  source of  the  VWAP
      calculation.
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
6h    If  securities were  issued  under   N/A
      rule     7.1A     for     non-cash
      consideration,   state   date   on
      which  valuation of  consideration
      was   released   to   ASX   Market
      Announcements
                                          --------------------------------------------------------------
                                           
                                          --------------------------------------------------------------
6i    Calculate  the entity's  remaining   Nil
      issue capacity under rule 7.1  and
      rule  7.1A  - complete Annexure  1
      and    release   to   ASX   Market
      Announcements
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
7     Dates   of   entering  +securities   N/A
      into  uncertificated  holdings  or
      despatch of certificates
                                          --------------------------------------------------------------
      
                                          --------------------------------------------------------------
                                           Number                    +Class
                                          --------------------------------------------------------------
8     Number    and   +class   of    all   191,701,291               Fully    Paid   Ordinary
      +securities    quoted    on    ASX                             Shares
      (including   the   securities   in                             
      section 2 if applicable)                                       
                                           27,047,443                Listed  Options exercise
                                                                     price  10 cents,  expiry
                                                                     13 November 2013
                                          --------------------------------------------------------------
                                           

                                          --------------------------------------------------------------
                                          Number                     +Class
                                          --------------------------------------------------------------
9     Number    and   +class   of    all  2,000,000                  Unlisted         Options
      +securities  not  quoted  on   ASX                             exercise price 40 cents,
      (including   the   securities   in                             expiry  27 August  2013.
      section 2 if applicable)                                       Vest - 27 August 2011.
                                                                     
                                                                     Unlisted         Options
                                          8,500,000                  exercise price 50 cents,
                                                                     expiry 23 December 2015.
                                          --------------------------------------------------------------
                                          
                                          --------------------------------------------------------------
10    Dividend policy (in the case of  a  Unchanged
      trust,  distribution  policy)   on
      the increased capital (interests)
                                          --------------------------------------------------------------

Part 2 - Bonus issue or pro rata issue

                                          --------------------------------------------------------------
11    Is    security   holder    approval  N/A
      required?
                                          --------------------------------------------------------------
                                           
                                          --------------------------------------------------------------
12    Is  the issue renounceable or  non-  N/A
      renounceable?
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
13    Ratio   in  which  the  +securities  N/A
      will be offered
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
14    +Class of +securities to which  the  N/A
      offer relates
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
15    +Record     date    to    determine  N/A
      entitlements
                                          --------------------------------------------------------------
                                          
                                          --------------------------------------------------------------
16    Will    holdings    on    different  N/A
      registers   (or  subregisters)   be
      aggregated      for     calculating
      entitlements?
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
17    Policy  for  deciding  entitlements  N/A
      in relation to fractions
                                          --------------------------------------------------------------
                                           
                                          --------------------------------------------------------------
18    Names  of  countries in  which  the  N/A
      entity  has  +security holders  who
      will   not   be  sent   new   issue
      documents
      Note:  Security  holders  must   be
      told how their entitlements are  to
      be dealt with.
      Cross reference: rule 7.7.
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
19    Closing   date   for   receipt   of  N/A
      acceptances or renunciations
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
20    Names of any underwriters            N/A
      
      
                                          --------------------------------------------------------------
                                           
                                          --------------------------------------------------------------
21    Amount  of any underwriting fee  or  N/A
      commission
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
22    Names of any brokers to the issue    N/A
      

                                          --------------------------------------------------------------
                                           
                                          --------------------------------------------------------------
23    Fee  or  commission payable to  the  N/A
      broker to the issue
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
24    Amount  of any handling fee payable  N/A
      to  brokers  who lodge  acceptances
      or   renunciations  on  behalf   of
      +security holders
                                          --------------------------------------------------------------
                                          
                                          --------------------------------------------------------------
25    If   the  issue  is  contingent  on  N/A
      +security  holders'  approval,  the
      date of the meeting
                                          --------------------------------------------------------------
                                           
                                          --------------------------------------------------------------
26    Date   entitlement  and  acceptance  N/A
      form   and  prospectus  or  Product
      Disclosure Statement will  be  sent
      to persons entitled
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
27    If  the  entity has issued options,  N/A
      and   the   terms  entitle   option
      holders    to    participate     on
      exercise,   the   date   on   which
      notices  will  be  sent  to  option
      holders
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
28    Date rights trading will begin  (if  N/A
      applicable)
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
29    Date  rights trading will  end  (if  N/A
      applicable)
      
                                          --------------------------------------------------------------
                                           
                                          --------------------------------------------------------------
30    How   do  +security  holders   sell  N/A
      their  entitlements in full through
      a broker?
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
31    How  do +security holders sell part  N/A
      of  their  entitlements  through  a
      broker and accept for the balance?
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
32    How  do  +security holders  dispose  N/A
      of  their  entitlements (except  by
      sale through a broker)?
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
33    +Despatch date                       N/A
      
      
                                          --------------------------------------------------------------

Part 3 - Quotation of securities
You need only complete this section if you are applying for quotation of securities

34    Type of securities
      (tick one)
      
            
(a)     X    Securities described in Part 1
               

(b)   ----   All other securities
             Example:  restricted  securities  at the end of the  escrowed  period,  partly  paid
      ----   securities  that  become  fully  paid,  employee  incentive  share  securities  when
             restriction   ends,  securities  issued  on  expiry  or  conversion  of  convertible
             securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities


Tick   to   indicate   you  are   providing   the              
information or documents

35   ----    If  the  +securities are +equity securities, the names of the 20 largest holders  of
             the  additional +securities, and the number and percentage of additional +securities
     ----    held by those holders
                       
     
36   ----    If   the  +securities  are  +equity  securities,  a  distribution  schedule  of  the
             additional +securities setting out the number of holders in the categories
     ----    1 - 1,000
             1,001 - 5,000
             5,001 - 10,000
             10,001 - 100,000
             100,001 and over
                       
     ----
37           A copy of any trust deed for the additional +securities
     ----

Entities that have ticked box 34(b)

                                          --------------------------------------------------------------
38    Number   of  securities  for   which  N/A
      +quotation is sought
      
                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
39    Class   of  +securities  for   which  N/A
      quotation is sought
                                          --------------------------------------------------------------
                                            
                                          --------------------------------------------------------------
40    Do  the +securities rank equally  in  N/A
      all   respects  from  the  date   of
      allotment  with  an existing  +class
      of quoted +securities?
      
      If  the additional securities do not
      rank equally, please state:
      *   the  date from which they
          do
      *   the  extent to which they
          participate for the next dividend,
          (in   the   case  of  a   trust,
          distribution) or interest payment
      *   the  extent to which they
          do not rank equally, other than in
          relation  to the next  dividend,
          distribution or interest payment
                                            
                                          --------------------------------------------------------------
41    Reason  for  request  for  quotation  N/A
      now
      Example:  In the case of  restricted
      securities,   end   of   restriction
      period
      
      (if   issued   upon  conversion   of
      another  security, clearly  identify
      that other security)

                                          --------------------------------------------------------------

                                          --------------------------------------------------------------
                                            Number                     +Class
                                          --------------------------------------------------------------
42    Number    and    +class    of    all  N/A                        
      +securities    quoted     on     ASX
      (including the securities in  clause
      38)
      
                                          --------------------------------------------------------------

Quotation agreement

1       +Quotation  of our additional +securities is in ASX's absolute discretion.  ASX may  quote  the
        +securities on any conditions it decides.

2       We warrant the following to ASX.

            *    The  issue  of  the +securities to be quoted complies with the law and is  not  for  an
                 illegal purpose.

            *    There is no reason why those +securities should not be granted +quotation.

            *    An  offer  of  the  +securities for sale within 12 months after their  issue  will  not
                 require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.
                 
                 Note:  An  entity  may need to obtain appropriate warranties from subscribers  for  the
                 securities in order to be able to give this warranty

            *    Section  724  or  section  1016E  of  the  Corporations  Act  does  not  apply  to  any
                 applications received by us in relation to any +securities to be quoted and  that  no-
                 one  has any right to return any +securities to be quoted under sections 737,  738  or
                 1016F  of  the  Corporations Act at the time that we request that the  +securities  be
                 quoted.
        
            *    If  we  are  a trust, we warrant that no person has the right to return the +securities
                 to  be  quoted under section 1019B of the Corporations Act at the time that we request
                 that the +securities be quoted.

3       We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or
        expense arising from or connected with any breach of the warranties in this agreement.

4       We  give  ASX  the  information and documents required by this form.   If  any  information  or
        document  not  available now, will give it to ASX before +quotation of the +securities  begins.
        We  acknowledge that ASX is relying on the information and documents.  We warrant that they are
        (will be) true and complete.


Sign here:            Kevin Lynn                                    Date: 04/03/2013
                    (Company secretary)


Print name:           Kevin Lynn

                                            == == == == ==
                                            
                                            
                                       Appendix 3B - Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for +eligible entities

Introduced 01/08/12


Part 1

----------------------------------------------------------------------------------------------------
                          Rule 7.1 - Issues exceeding 15% of capital
----------------------------------------------------------------------------------------------------
Step 1: Calculate "A", the base figure from which the placement capacity is calculated
----------------------------------------------------------------------------------------------------
Insert number of fully paid ordinary            
securities on issue 12 months before date of
issue or agreement to issue
----------------------------------------------------------------------------------------------------
Add the following:                                        

*  Number of fully paid ordinary securities
   issued in that 12 month period under an
   exception in rule 7.2

*  Number of fully paid ordinary securities
   issued in that 12 month period with
   shareholder approval

*  Number of partly paid ordinary securities
   that became fully paid in that 12 month
   period

Note:
*  Include only ordinary securities here -
   other classes of equity securities cannot
   be added
*  Include here (if applicable) the
   securities the subject of the Appendix 3B
   to which this form is annexed
*  It may be useful to set out issues of
   securities on different dates as separate
   line items
----------------------------------------------------------------------------------------------------
Subtract the number of fully paid ordinary      
securities cancelled during that 12 month
period
----------------------------------------------------------------------------------------------------
"A"                                             
----------------------------------------------------------------------------------------------------
Step 2: Calculate 15% of "A"
----------------------------------------------------------------------------------------------------
"B"                                             
----------------------------------------------------------------------------------------------------
Multiply "A" by 0.15                            
----------------------------------------------------------------------------------------------------
Step 3: Calculate "C", the amount of placement capacity under rule 7.1 that has already been
used
----------------------------------------------------------------------------------------------------
Insert number of equity securities issued or    
agreed to be issued in that 12 month period
not counting those issued:

*  Under an exception in rule 7.2

*  Under rule 7.1A

*  With security holder approval under rule
   7.1 or rule 7.4

Note:
*  This applies to equity securities, unless
   specifically excluded - not just ordinary
   securities
*  Include here (if applicable ) the
   securities the subject of the Appendix 3B
   to which this form is annexed
*  It may be useful to set out issues of
   securities on different dates as separate
   line items
----------------------------------------------------------------------------------------------------
"C"                                             
----------------------------------------------------------------------------------------------------
Step 4: Subtract "C" from ["A" x "B"] to calculate remaining placement capacity under rule 7.1
----------------------------------------------------------------------------------------------------
"A" x 0.15                                                
Note: number must be same as shown in Step 2
----------------------------------------------------------------------------------------------------
Subtract "C"                                              
Note: number must be same as shown in Step 3
----------------------------------------------------------------------------------------------------
Total ["A" x 0.15] - "C"                        
----------------------------------------------------------------------------------------------------


Part 2

----------------------------------------------------------------------------------------------------
                Rule 7.1A - Additional placement capacity for eligible entities
----------------------------------------------------------------------------------------------------
Step 1: Calculate "A", the base figure from which the placement capacity is calculated
----------------------------------------------------------------------------------------------------
"A"                                                       
Note: number must be same as shown in Step 1
of Part 1
----------------------------------------------------------------------------------------------------
Step 2: Calculate 10% of "A"
----------------------------------------------------------------------------------------------------
"D"                                             
----------------------------------------------------------------------------------------------------
Multiply "A" by 0.10                            
----------------------------------------------------------------------------------------------------
Step 3: Calculate "E", the amount of placement capacity under rule 7.1A that has already been
used
----------------------------------------------------------------------------------------------------
Insert number of equity securities issued or    
agreed to be issued in that 12 month period
under rule 7.1A

Notes:
*  This applies to equity securities - not
   just ordinary securities
*  Include here - if applicable - the
   securities the subject of the Appendix 3B
   to which this form is annexed
*  Do not include equity securities issued
   under rule 7.1 (they must be dealt with in
   Part 1), or for which specific security
   holder approval has been obtained
*  It may be useful to set out issues of
   securities on different dates as separate
   line items
----------------------------------------------------------------------------------------------------
"E"                                             
----------------------------------------------------------------------------------------------------
Step 4: Subtract "E" from ["A" x "D"] to calculate remaining placement capacity under rule 7.1A
----------------------------------------------------------------------------------------------------
"A" x 0.10                                                
Note: number must be same as shown in Step 2
----------------------------------------------------------------------------------------------------
Subtract "E"                                              
Note: number must be same as shown in Step 3
----------------------------------------------------------------------------------------------------
Total ["A" x 0.10] - "E"                        
----------------------------------------------------------------------------------------------------


+ See chapter 19 for defined terms.

 







                                                                                             Appendix 3B
                                                                                  New issue announcement
--------------------------------------------------------------------------------------------------------

                                                                       Rule 2.7, 3.10.3, 3.10.4, 3.10.5
                                              Appendix 3B
                                                   
                                        New issue announcement,
                          application for quotation of additional securities
                                             and agreement

Information or documents not available now must be given to ASX as soon as available.  Information and
documents given to ASX become ASX's property and may be made public.

Introduced  01/07/96   Origin:  Appendix 5  Amended 01/07/98, 01/09/99, 01/07/00,  30/09/01,  11/03/02,
            01/01/03, 24/10/05, 01/08/12


Name of entity
--------------------------------------------------------------------------------------------------------
Silver Mines Limited
--------------------------------------------------------------------------------------------------------

ABN
---------------------------------
107 452 942
---------------------------------

We (the entity) give ASX the following information.


Part 1 - All issues
You must complete the relevant sections (attach sheets if there is not enough space).

                                         ---------------------------------------------------------------
1     +Class  of  +securities issued  or  Ordinary and Options
      to be issued
                                         ---------------------------------------------------------------      
                                          
                                         ---------------------------------------------------------------
2     Number   of +securities issued  or  20,814,200 Fully Paid Ordinary Shares
      to   be   issued  (if  known)   or  10,407,100 Listed Options
      maximum   number  which   may   be
      issued
                                         ---------------------------------------------------------------      
                                          
                                         ---------------------------------------------------------------
3     Principal     terms     of     the  Fully Paid Ordinary Shares: and
      +securities   (eg,   if   options,  
      exercise  price and  expiry  date;  Listed  Options, exercise price 10 cents and expiry
      if  partly  paid +securities,  the  13 November 2013
      amount  outstanding and due  dates  
      for   payment;   if   +convertible  
      securities,  the conversion  price  
      and dates for conversion)           
                                         ---------------------------------------------------------------
                                          
                                        
                                         ---------------------------------------------------------------
4     Do  the  +securities rank  equally   Yes
      in  all respects from the date  of
      allotment with an existing  +class
      of quoted +securities?
      
      If  the  additional securities  do
      not rank equally, please state:
      *   the  date  from  which
          they do
      *   the  extent  to  which
          they  participate for the next
          dividend,  (in the case  of  a
          trust, distribution) or interest
          payment
      *   the  extent  to  which
          they do not rank equally, other
          than  in relation to the  next
          dividend,   distribution    or
          interest payment
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
5     Issue price or consideration         $0.047

                                         ---------------------------------------------------------------
                                           
                                         ---------------------------------------------------------------
6     Purpose of the issue                 The  issue  was  as  a result of  a  placement  to
      (If  issued  as consideration  for   professional and sophisticated investors.
      the    acquisition   of    assets,
      clearly identify those assets)
                                         ---------------------------------------------------------------
      
      
      
      
      
                                         ---------------------------------------------------------------
6a    Is  the entity an +eligible entity   Yes
      that  has obtained security holder
      approval under rule 7.1A?
      
      If  Yes, complete sections 6b - 6h
      in  relation  to  the  +securities
      the  subject of this Appendix  3B,
      and comply with section 6i
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
6b    The   date  the  security   holder   19 November 2012
      resolution  under  rule  7.1A  was
      passed
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
6c    Number   of   +securities   issued   10,162,943 Fully Paid Ordinary; and
      without  security holder  approval   4,658,648 Listed Options
      under rule 7.1
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
6d    Number of +securities issued  with   10,651,257 Fully Paid Ordinary and
      security  holder  approval   under   5,748,452 Listed Options
      rule 7.1A
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
6e    Number of +securities issued  with   N/A
      security  holder  approval   under
      rule   7.3,  or  another  specific
      security  holder approval (specify
      date of meeting)
      
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
6f    Number of securities issued  under   N/A
      an exception in rule 7.2
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
6g    If  securities issued  under  rule   The securities were issued above 75% of the 15 day
      7.1A,  was  issue price  at  least   VWAP.
      75%  of  15 day VWAP as calculated
      under  rule  7.1A.3?  Include  the
      issue   date   and  both   values.
      Include  the  source of  the  VWAP
      calculation.
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
6h    If  securities were  issued  under   N/A
      rule     7.1A     for     non-cash
      consideration,   state   date   on
      which  valuation of  consideration
      was   released   to   ASX   Market
      Announcements
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
6i    Calculate  the entity's  remaining   Nil
      issue capacity under rule 7.1  and
      rule  7.1A  - complete Annexure  1
      and    release   to   ASX   Market
      Announcements
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
7     Dates   of   entering  +securities   28 February 2013
      into  uncertificated  holdings  or
      despatch of certificates
      
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
                                           Number                    +Class
                                         ---------------------------------------------------------------
8     Number    and   +class   of    all   186,701,291               Fully    Paid   Ordinary
      +securities    quoted    on    ASX                             Shares
      (including   the   securities   in                             
      section 2 if applicable)                                       
                                           24,547,443                Listed  Options exercise
                                                                     price  10 cents,  expiry
                                                                     13 November 2013
                                           
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
                                          Number                     +Class
                                         ---------------------------------------------------------------
9     Number    and   +class   of    all  2,000,000                  Unlisted         Options
      +securities  not  quoted  on   ASX                             exercise price 40 cents,
      (including   the   securities   in                             expiry  27 August  2013.
      section 2 if applicable)                                       Vest - 27 August 2011.
                                                                     
                                                                     Unlisted         Options
                                          8,500,000                  exercise price 50 cents,
                                                                     expiry 23 December 2015.
                                         ---------------------------------------------------------------
                                          
                                         ---------------------------------------------------------------
10    Dividend policy (in the case of  a  Unchanged
      trust,  distribution  policy)   on
      the increased capital (interests)
                                         ---------------------------------------------------------------

Part 2 - Bonus issue or pro rata issue

                                         ---------------------------------------------------------------
11    Is    security   holder    approval  N/A
      required?
      
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
12    Is  the issue renounceable or  non-  N/A
      renounceable?
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
13    Ratio   in  which  the  +securities  N/A
      will be offered
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
14    +Class of +securities to which  the  N/A
      offer relates
                                         ---------------------------------------------------------------
                                           
                                         ---------------------------------------------------------------
15    +Record     date    to    determine  N/A
      entitlements
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
16    Will    holdings    on    different  N/A
      registers   (or  subregisters)   be
      aggregated      for     calculating
      entitlements?
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
17    Policy  for  deciding  entitlements  N/A
      in relation to fractions
                                         ---------------------------------------------------------------
                                           
                                         ---------------------------------------------------------------
18    Names  of  countries in  which  the  N/A
      entity  has  +security holders  who
      will   not   be  sent   new   issue
      documents
      Note:  Security  holders  must   be
      told how their entitlements are  to
      be dealt with.
      Cross reference: rule 7.7.
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
19    Closing   date   for   receipt   of  N/A
      acceptances or renunciations
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
20    Names of any underwriters            N/A

      
                                         ---------------------------------------------------------------
                                           
                                         ---------------------------------------------------------------
21    Amount  of any underwriting fee  or  N/A
      commission
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
22    Names of any brokers to the issue    N/A
      
      
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
23    Fee  or  commission payable to  the  N/A
      broker to the issue
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
24    Amount  of any handling fee payable  N/A
      to  brokers  who lodge  acceptances
      or   renunciations  on  behalf   of
      +security holders
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
25    If   the  issue  is  contingent  on  N/A
      +security  holders'  approval,  the
      date of the meeting
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
26    Date   entitlement  and  acceptance  N/A
      form   and  prospectus  or  Product
      Disclosure Statement will  be  sent
      to persons entitled
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
27    If  the  entity has issued options,  N/A
      and   the   terms  entitle   option
      holders    to    participate     on
      exercise,   the   date   on   which
      notices  will  be  sent  to  option
      holders
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
28    Date rights trading will begin  (if  N/A
      applicable)
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
29    Date  rights trading will  end  (if  N/A
      applicable)
      
                                         ---------------------------------------------------------------
                                           
                                         ---------------------------------------------------------------
30    How   do  +security  holders   sell  N/A
      their  entitlements in full through
      a broker?
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
31    How  do +security holders sell part  N/A
      of  their  entitlements  through  a
      broker and accept for the balance?
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
32    How  do  +security holders  dispose  N/A
      of  their  entitlements (except  by
      sale through a broker)?
                                         ---------------------------------------------------------------

                                         ---------------------------------------------------------------
33    +Despatch date                       N/A
      
      
                                         ---------------------------------------------------------------

Part 3 - Quotation of securities
You need only complete this section if you are applying for quotation of securities

34    Type of securities
      (tick one)
      
           
(a)      X   Securities described in Part 1
               

         
(b)      --  All other securities
             Example:  restricted  securities  at the end of the  escrowed  period,  partly  paid
         --  securities  that  become  fully  paid,  employee  incentive  share  securities  when
             restriction   ends,  securities  issued  on  expiry  or  conversion  of  convertible
             securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities


Tick   to   indicate   you  are   providing   the              
information or documents

         
35       --  If  the  +securities are +equity securities, the names of the 20 largest holders  of
             the  additional +securities, and the number and percentage of additional +securities
         --  held by those holders

                       
36       --  If   the  +securities  are  +equity  securities,  a  distribution
             schedule  of  the additional +securities setting out 
         --  the number of holders in the categories
             1 - 1,000
             1,001 - 5,000
             5,001 - 10,000
             10,001 - 100,000
             100,001 and over
         --             
37           A copy of any trust deed for the additional +securities
         --

Entities that have ticked box 34(b)

                                           -------------------------------------------------------------
38    Number   of  securities  for   which  N/A
      +quotation is sought
                                            -------------------------------------------------------------
                                            
                                           -------------------------------------------------------------
39    Class   of  +securities  for   which  N/A
      quotation is sought
      
                                           -------------------------------------------------------------

                                           -------------------------------------------------------------
40    Do  the +securities rank equally  in  N/A
      all   respects  from  the  date   of
      allotment  with  an existing  +class
      of quoted +securities?
      
      If  the additional securities do not
      rank equally, please state:
      *   the  date from which they
          do
      *   the  extent to which they
          participate for the next dividend,
          (in   the   case  of  a   trust,
          distribution) or interest payment
      *   the  extent to which they
          do not rank equally, other than in
          relation  to the next  dividend,
          distribution or interest payment
                                            
                                           -------------------------------------------------------------
41    Reason  for  request  for  quotation  N/A
      now

      Example:  In the case of  restricted
      securities,   end   of   restriction
      period
      
      (if   issued   upon  conversion   of
      another  security, clearly  identify
      that other security)
                                           -------------------------------------------------------------

                                           -------------------------------------------------------------
                                            Number                     +Class
                                           -------------------------------------------------------------
42    Number    and    +class    of    all  N/A                        
      +securities    quoted     on     ASX
      (including the securities in  clause
      38)
      
                                           -------------------------------------------------------------
                                           
Quotation agreement

1       +Quotation  of our additional +securities is in ASX's absolute discretion.  ASX may  quote  the
        +securities on any conditions it decides.

2       We warrant the following to ASX.

            *    The  issue  of  the +securities to be quoted complies with the law and is  not  for  an
                 illegal purpose.

            *    There is no reason why those +securities should not be granted +quotation.

            *    An  offer  of  the  +securities for sale within 12 months after their  issue  will  not
                 require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.
                 
                 Note:  An  entity  may need to obtain appropriate warranties from subscribers  for  the
                 securities in order to be able to give this warranty

            *    Section  724  or  section  1016E  of  the  Corporations  Act  does  not  apply  to  any
                 applications received by us in relation to any +securities to be quoted and  that  no-
                 one  has any right to return any +securities to be quoted under sections 737,  738  or
                 1016F  of  the  Corporations Act at the time that we request that the  +securities  be
                 quoted.
        
            *    If  we  are  a trust, we warrant that no person has the right to return the +securities
                 to  be  quoted under section 1019B of the Corporations Act at the time that we request
                 that the +securities be quoted.

3       We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or
        expense arising from or connected with any breach of the warranties in this agreement.

4       We  give  ASX  the  information and documents required by this form.   If  any  information  or
        document  not  available now, will give it to ASX before +quotation of the +securities  begins.
        We  acknowledge that ASX is relying on the information and documents.  We warrant that they are
        (will be) true and complete.


Sign here:          Kevin Lynn                                     Date:  04/03/2013
                    (Company secretary)


Print name:         Kevin Lynn

                                            == == == == ==
                                            
                                            
---------------------------------------------------------------------------------------------------------
                                       Appendix 3B - Annexure 1


Calculation of placement capacity under rule 7.1 and rule 7.1A for +eligible entities

Introduced 01/08/12

Part 1

----------------------------------------------------------------------------------------------------------
                          Rule 7.1 - Issues exceeding 15% of capital
----------------------------------------------------------------------------------------------------------
Step 1: Calculate "A", the base figure from which the placement capacity is calculated
----------------------------------------------------------------------------------------------------------
Insert number of fully paid ordinary            136,106,468 Fully Paid Ordinary Shares
securities on issue 12 months before date of
issue or agreement to issue
----------------------------------------------------------------------------------------------------------
Add the following:                                        

*  Number of fully paid ordinary securities     
   issued in that 12 month period under an      27,890,623 Fully Paid Ordinary Shares
   exception in rule 7.2

*  Number of fully paid ordinary securities
   issued in that 12 month period with
   shareholder approval

*  Number of partly paid ordinary securities
   that became fully paid in that 12 month
   period

Note:
*  Include only ordinary securities here -
   other classes of equity securities cannot
   be added
*  Include here (if applicable) the
   securities the subject of the Appendix 3B
   to which this form is annexed
*  It may be useful to set out issues of
   securities on different dates as separate
   line items
----------------------------------------------------------------------------------------------------------
Subtract the number of fully paid ordinary      Nil
securities cancelled during that 12 month
period
----------------------------------------------------------------------------------------------------------
"A"                                             163,997,091 Fully Paid Ordinary Shares
----------------------------------------------------------------------------------------------------------
Step 2: Calculate 15% of "A"
----------------------------------------------------------------------------------------------------------
"B"                                             0.15
                                                [Note: this value cannot be changed]
----------------------------------------------------------------------------------------------------------
Multiply "A" by 0.15                            24,599,563 Securities
----------------------------------------------------------------------------------------------------------
Step 3: Calculate "C", the amount of placement capacity under rule 7.1 that has already been
used
----------------------------------------------------------------------------------------------------------
Insert number of equity securities issued or    Options Issued under Share Placement Plan on 2
agreed to be issued in that 12 month period     October 2012 - 6,942,972;
not counting those issued:                      
                                                Shortfall Fully Paid Ordinary Shares Issued in
*  Under an exception in rule 7.2               relation to Share Purchase Plan on 1 November
                                                2012 - 1,240,000;
*  Under rule 7.1A                              
                                                Shortfall Options Issued in relation to Share
*  With security holder approval under rule     Purchase Plan on 1 November 2012 - 620,000;
   7.1 or rule 7.4                              

Note:                                           Shortfall Fully Paid Ordinary Shares Issued in
*  This applies to equity securities, unless    relation to Share Purchase Plan on 5 November
   specifically excluded - not just ordinary    2012 - 650,000;
   securities                                   
*  Include here (if applicable ) the            Shortfall Options Issued in relation to Share
   securities the subject of the Appendix 3B    Purchase Plan on 5 November 2012 - 325,000; and
   to which this form is annexed                
*  It may be useful to set out issues of        Placement of Fully Paid Ordinary Shares to
   securities on different dates as separate    Professional and Sophisticated Investors on 28
   line items                                   February 2013 - 10,162,943; and
                                                
                                                Issue of Options to Professional and
                                                Sophisticated Investors on 28 February 2013 -
                                                4,658,648.
                                                
----------------------------------------------------------------------------------------------------------
"C"                                             24,599,563 Securities
----------------------------------------------------------------------------------------------------------
Step 4: Subtract "C" from ["A" x "B"] to calculate remaining placement capacity under rule 7.1
----------------------------------------------------------------------------------------------------------
"A" x 0.15                                      24,599,563 Securities
Note: number must be same as shown in Step 2
----------------------------------------------------------------------------------------------------------
Subtract "C"                                    24,599,563 Securities
Note: number must be same as shown in Step 3
----------------------------------------------------------------------------------------------------------
Total ["A" x 0.15] - "C"                        Nil
                                                
                                                [Note: this is the remaining placement capacity
                                                under rule 7.1]
----------------------------------------------------------------------------------------------------------
Part 2

----------------------------------------------------------------------------------------------------------
                Rule 7.1A - Additional placement capacity for eligible entities
----------------------------------------------------------------------------------------------------------
Step 1: Calculate "A", the base figure from which the placement capacity is calculated
----------------------------------------------------------------------------------------------------------
"A"                                                       163,997,091 Fully Paid Ordinary Shares
Note: number must be same as shown in Step 1
of Part 1
----------------------------------------------------------------------------------------------------------
Step 2: Calculate 10% of "A"
----------------------------------------------------------------------------------------------------------
"D"                                             0.10
                                                Note: this value cannot be changed
----------------------------------------------------------------------------------------------------------
Multiply "A" by 0.10                            16,399,709 Securities
----------------------------------------------------------------------------------------------------------
Step 3: Calculate "E", the amount of placement capacity under rule 7.1A that has already been
used
----------------------------------------------------------------------------------------------------------
Insert number of equity securities issued or    Placement of Fully Paid Ordinary Shares to
agreed to be issued in that 12 month period     Professional and Sophisticated Investors on 28
under rule 7.1A                                 February 2013 - 10,651,257.

Notes:                                          Issue of Options to Professional and
*  This applies to equity securities - not      Sophisticated Investors on 28 February 2013 -
   just ordinary securities                     5,748,452.
*  Include here - if applicable - the           
   securities the subject of the Appendix 3B
   to which this form is annexed
*  Do not include equity securities issued
   under rule 7.1 (they must be dealt with in
   Part 1), or for which specific security
   holder approval has been obtained
*  It may be useful to set out issues of
   securities on different dates as separate
   line items
----------------------------------------------------------------------------------------------------------
"E"                                             16,399,709 Securities
----------------------------------------------------------------------------------------------------------
Step 4: Subtract "E" from ["A" x "D"] to calculate remaining placement capacity under rule 7.1A
----------------------------------------------------------------------------------------------------------
"A" x 0.10                                                16,399,709 Securities
Note: number must be same as shown in Step 2
----------------------------------------------------------------------------------------------------------
Subtract "E"                                              16,399,709 Securities

Note: number must be same as shown in Step 3
----------------------------------------------------------------------------------------------------------
Total ["A" x 0.10] - "E"                        Nil

                                                Note: this is the remaining placement capacity
                                                under rule 7.1A
----------------------------------------------------------------------------------------------------------


+ See chapter 19 for defined terms.



4 March 2013

Company Announcements
ASX Limited
Exchange Centre
20 Bridge Street
SYDNEY NSW 2000

Amended Appendix 3B and Additional Information

Please find enclosed amended Appendix 3B.

We provide the attached amended Appendix 3B to adjust the number of securities that will be issued under
this Appendix 3B per Listing Rule 7.1 and 7.1A (as announced 15 February 2013) and provide further
information as set out below.

The amendment is due to a reduction of 6,518,648 fully paid ordinary shares to 20,814,200 from 27,332,848
as announced on 15 February 2013 and the issue of 10,407,100 options.

In addition, please find attached further information required under Listing Rule 3.10.5A:

    a)  Details regarding dilution are as follows:
        
------------------------------------------------------------------------------------------------------------
Fully paid ordinary shares on issue prior to most                                               165,887,091
recent capital raising
------------------------------------------------------------------------------------------------------------
Shares issued as a result of most recent capital                                                 
raising                                                                                          20,814,200
------------------------------------------------------------------------------------------------------------
Total number of shares issue                                                                    186,701,291
------------------------------------------------------------------------------------------------------------
    b)  The Company issued the equity securities as a placement under rule 7.1A and not as a pro-rata
        issue or other type of issue in which existing ordinary security holders would have been eligible to
        participate as the Company had initiated a drilling program at its Webbs Project in New England, NSW and
        found that a placement of securities was more timely and critical given the timing and funding required for
        the drilling program;
        
    c)  There is no underwriting arrangement, including any fees payable to an underwriter; and
        
    d)  Broker fees of up to 7% will be paid to brokers.
        

Yours sincerely

Kevin Lynn
Company Secretary

Contact Information

  • Silver Mines