Silver Mines
LSE : SVLP

September 09, 2008 09:56 ET

Silver Mines Limited: Resource Estimate for Webbs Silver Project

FOR:  SILVER MINES LIMITED

ASX SYMBOL:  SVL
PLUS SYMBOL:  SVLP

September 9, 2008

Silver Mines Limited: Resource Estimate for Webbs Silver Project

HIGHLIGHTS

- Webbs Silver Project Global Inferred Resource estimate of 670,000 tonnes at 210g/t silver (6.8
ounces per tonne silver) for 4.5 million ounces of silver

- Webbs Silver South Prospect Inferred Resource (which is part of the Global estimate above) of
510,000 tonnes at 230g/t silver (7.4 ounces per tonne silver) for 3.8 million ounces of silver

- Copper, Zinc and Lead provide significant value to Inferred Resource estimates

LONDON, UNITED KINGDOM--(Marketwire - Sept. 9, 2008) - Silver Mines Limited (ASX:SVL)(PLUS:SVLP) is
pleased to announce that independent consultants Hellman and Schofield Pty Ltd (HS) have completed the
resource estimate for the Webbs Silver Project on the Company's 100% owned tenement (EL5674) in north-
eastern NSW. Tables 1 and 2 detail the estimates.

/T/

-------------------------------------------------------------------
Cutoff $US
per tonne        Tonnes       Ag g/t        Cu%       Zn%       Pb%
-------------------------------------------------------------------
$ 50            670,000          210      0.19%     1.20%     0.50%
-------------------------------------------------------------------
Table 1: Global Inferred Resource estimate for Webbs Silver Project

-------------------------------------------------------------------
Cutoff $US
per tonne        Tonnes       Ag g/t        Cu%       Zn%       Pb%
-------------------------------------------------------------------
$ 50          510,000(i)         230      0.19%     1.40%     0.42%
-------------------------------------------------------------------
Table 2: Inferred Resource estimate for Webbs Silver South Prospect
(i) This estimate is part of the Global estimate in Table 1.

/T/

Inferred Resource Model Assumptions and Parameters.

Specific sections from the Hellman and Schofield Pty Ltd Report have been included below to explain
the method for calculating the Inferred Resource Estimate.

- A total of and 46 Reverse Circulation (RC) holes (totalling 5,429m) have been completed over the
four Webbs mineralised centres currently identified. All these holes were used in the model (Map 1).
Four diamond drill holes drilled at the historic Webbs Silver Mine, below the historic mine workings
have not been used as assay data for these holes is pending.

- The model estimates inferred resources to a depth of 200m from surface and suggests that the Webbs
Silver South resource may be amenable to open cut mining for the upper portion. The depth of any
potential open cut mining is yet to be determined.

- Specific gravity has been determined on pulped samples used for 1m assays. The pycnometer technique
used provides a density which effectively measures the net mineralogical specific gravity without
accounting for natural pore space or cavities in the rocks being measured.

- Sampling of RC chips has been performed to an appropriate standard. SVL has an internal quality
control program in place and follows documented procedures to ensure sample quality is maintained.

- There is currently no indication that assays in SVL's current database are biased or in error in any
material way. Confirmation is expected shortly in the results of a 50 sample check assay program
recently submitted for assay.

- Total Inferred Resources have been estimated by Ordinary Kriging using a cut-off determined from a
four year average market price of metals together with recoveries determined by preliminary
metallurgical test work.

/T/

Table 3 outlines the prices and metallurgical recoveries used in
determining Value in all composited intervals.

----------------------------------------------------------------
                            Metallurgical      Recoverable Value
Metal       Price $US(1)       Recovery(2)      $/Tonne of Metal
----------------------------------------------------------------
Silver           11$/oz               96%               $339500
----------------------------------------------------------------
Copper      5800$/Tonne               92%                 $5336
----------------------------------------------------------------
Zinc        2400$/Tonne               90%                 $2160
----------------------------------------------------------------
Lead        1600$/Tonne               73%                 $1168
----------------------------------------------------------------
(1) $US four year average of London Metal Exchange quotes for
    copper lead and zinc.
    $US four year average of Bangko Sentral ng Pilipinas for silver
(2) Spreadsheet from initial test work on SM1 sample provided by
    SVL and conducted by METCON Laboratories on Webbs ore in July 2008.

The value equation used is:

Value $US equals (Cu ppm X 0.005336) + (Ag ppm X 0.3395) + (Pb ppm
                  X 0.001168) + (Zn ppm X 0.002160)

/T/

- The modelling has shown that silver is the primary economic metal in the Webbs Silver Project
(comprising approximately 60% of the total Value calculated per tonne in the model). High values of
copper zinc and lead are closely associated with silver mineralisation and extraction of silver by
proposed metallurgical methods will extract significant amounts of the associated metals.

- Consequently a combination of mining and metallurgical extractable silver, copper, zinc and lead
will define the overall project economics. It is considered that volumes extracted for mineral
processing will be defined by the total value of metal they contain. A metallurgical recoverable $US
value (Value) has been calculated from individual metal prices and metallurgical recoveries.

- The base cut-off Value of $US50 per tonne was chosen as a starting point for the model estimates and
is considered preliminary. This value will be determined with a higher degree of certainty once the
Scoping Study for the Webbs Silver Project has been completed.

- All metals are highly correlated on the scale of the mineralisation. This high correlation means
that selections of ore from waste on the basis of silver, or on the basis of all metals combined into
a single Value variable is likely to be very similarly efficient.

Discussion

The Resource estimate detailed above is another important milestone in the assessment of the Webbs
Silver Project and supports the Company's view that there is real potential for a mining operation to
be developed there.

Some important points need to be made in relation to this estimate;

- The four prospects drilled to date have all contained silver-rich polymetallic mineralisation and
all remain open both along strike and down dip.

- The estimate demonstrates that mineralisation is continuous over areas drilled to date but high
grade mineralisation is highly variable between drill sections at the current spacing - approximately
25m to date.

- Closing up the drill spacing to 12.5m pierce points along strike should provide enough data to
elevate current Inferred Resource estimates to a higher confidence category.

- Further work is warranted on the project and is continuing without delay.

Please direct any queries regarding the content of this report to Charles Straw (CEO) on +61 2 9455
0280 or cstraw@silverminesltd.com.au.

The information in this report that relates to Mineral Resource estimates is based on information
compiled by Charles Straw, who is a Member of The Australasian Institute of Mining and Metallurgy and
is based on resource modelling undertaken by Simon Gatehouse, a corporate a member of the Australian
Institute of Geoscientists. Charles Straw has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking and
Simon has more than five years experience in the use of geostatistics for estimation of recoverable
resources. Under JORC reporting requirements and guidelines, Simon Gatehouse and Charles Straw are
both regarded as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Both Charles Straw and Simon
Gatehouse consents to the inclusion in the report of the matters based on this information in the form
and context in which it appears.

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FOR FURTHER INFORMATION PLEASE CONTACT:

Silver Mines Limited
Charles Straw
CEO
+61 2 9455 0280
Email: cstraw@silverminesltd.com.au

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