SILVER MINES LIMITED

SILVER MINES LIMITED ACN 107 452 942 NOTICE OF ANNUAL GENERAL MEETING

TIME: 11.00 AM (AEST) DATE: Monday, 30 November, 2015 PLACE: Level 10, 2 Bligh Street, Sydney, NSW 2000

This Notice should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting. Should you wish to discuss the matters in this Notice please do not hesitate to contact the Company Secretary on +61 2 8188 2556.

Notice of Annual General Meeting (setting out the proposed resolutions)

Explanatory Statement (explaining the proposed resolutions)

Proxy Form

TIME AND PLACE OF ANNUAL GENERAL MEETING AND HOW TO VOTE

VENUE

The Annual General Meeting of the Shareholders to which this Notice relates will be held at 11.00 am

(AEST) on Monday, 30 November, 2015 at Level 10, 2 Bligh St, Sydney NSW 2000.

VOTING IN PERSON

To vote in person, attend the Annual General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

(a) post, to Level 10, 2 Bligh Street, Sydney, NSW 2000 or PO Box H125, Australia Square, NSW 1215; or

(b) facsimile, to the Company on facsimile number +61 2 9235 2203,

so that it is received not later than 11.00 am (AEST) on Saturday, 28 November, 2015.

Proxy Forms received later than this time will be invalid.

NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the Annual General Meeting of Shareholders will be held at 11.00 am (AEST) on

Monday, 30 November, 2015 at Level 10, 2 Bligh Street, Sydney NSW 2000.

The Explanatory Statement to this Notice provides additional information on matters to be considered at the Annual General Meeting.

The Explanatory Statement and the Proxy Form are part of this Notice.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders of the Company at 12 noon. (AEST) on Friday, 27 November, 2015.

AGENDA

RECEIPT OF FINANCIAL REPORTS AND REPORTS OF DIRECTORS AND AUDITOR

To receive and consider the Financial Reports of the Company for the financial year ended 30 June 2015, together with the declaration of the Directors, the Remuneration Report and the Report of the Directors and the Auditor, which relate to the Financial Reports.

ADOPTION OF DIRECTORS’ REMUNERATION REPORT

RESOLUTION 1: To consider, and if thought fit, pass with or without amendment the following resolution as an ordinary resolution :

"That, for the purpose of Section 250R(2) of the Corporations Act 2001 (Cth) and for all other purposes, approval is given for the adoption of the Company’s Remuneration Report, as set out in the Directors’ Report within the Annual Report for the Year Ended 30 June 2015 prepared in accordance with Section 300A of the Corporations Act 2001 (Cth).”

Please note that in accordance with Sec 250R(3) of the Corporations Act (Cmwlth) the votes cast on this resolution are advisory only and do not bind the Company or the Directors.

ELECTION OF DIRECTOR

RESOLUTION 2: To consider, and if thought fit, pass the following resolution as an ordinary resolution :

"That, for the purposes of clause 20.2 of the Constitution of the Company, ASX Listing Rule 14.4 and for all other purposes, Charles Straw, who retires as a Director and being eligible, offers himself for election under clause 20.3 of the Constitution, be re-elected a Director of the Company."

RESOLUTION 3: To consider and, if thought fit, pass the following resolution as an ordinary resolution :

"That, for the purposes of clause 20.2 of the Constitution of the Company, ASX Listing Rule 14.4 and for all other purposes, David Sutton, who retires as a Director and being eligible, offers himself for election under clause 20.3 of the Constitution, be re-elected a Director of the Company."

ISSUE OF SECURITIES TO A DIRECTOR

RESOLUTION 4: To consider and, if thought fit, pass the following resolution as an ordinary resolution :

“That, for the purposes of ASX Listing Rule 10.11 and all other purposes, approval is given for the issue of 50 Million fully paid ordinary shares to James Naughton, a Director of the Company, or his nominee or as directed by him, for a consideration of $0.001 per share, for a total value of $50,000, in full repayment of loans he had made to the Company, as per details set out in the Explanatory Statement."

ISSUE OF SECURITIES IN THE FUTURE

RESOLUTION 5: PLACEMENT OF SECURITIES IN THE FUTURE

To consider and, if thought fit, pass the following resolution as an ordinary resolution : “That authority is hereby given to Directors under ASX Listing Rule 7.1, for the issue of up to 1.5 billion securities of the Company, which at the discretion of the Directors may be any type of securities permitted under the ASX Listing Rules, The Corporations Act 2001 (cwlth) and the Constitution of the Company, with such securities to be issued within 3 months of the date of this general meeting or such later date as the ASX permits at its discretion, at a price not less than $0.0015, provided that the issue will not contravene the Corporations Act 2001 or any other legislation and that such securities may be issued for working capital purposes and for any worthwhile purpose as determined by the Directors including in lieu of debt, fees or monies owing to any party, as consideration for any investments or acquisition.

In addition, the Directors are hereby authorised to issue such securities to sophisticated or professional investors or otherwise in accordance with section 708 of the Corporations Act 2001.”

OTHER BUSINESS

To consider any other business that can lawfully be brought before the Annual General Meeting.

DATED: 28 OCTOBER, 2015 BY ORDER OF THE BOARD

VAZ HOVANESSIAN

COMPANY SECRETARY SILVER MINES LIMITED

ENTITLEMENT TO VOTE

Who may vote?

Pursuant to Regulation 7.11.37 of the Corporations Regulations, the Company has determined that for the purpose of the Annual General Meeting, all Shares in the Company shall be taken to be held by the persons who held them as registered Shareholders at 11 am. (AEST) on Friday, 27 November, 2015 ( Entitlement Time ).

All holders of ordinary Shares in the Company as at the Entitlement Time are entitled to attend and vote at the Annual General Meeting.

Transactions registered after that time will be disregarded in determining Shareholder's entitlement to attend and vote at the Annual General Meeting.

PROXIES

Please note that:

a Shareholder of the Company who is entitled to attend and cast a vote at the Annual General Meeting has a right to appoint a proxy;
the appointment may specify the proportion or number of votes that the proxy may exercise;
a Shareholder who is entitled to cast two or more votes at the Annual General Meeting may appoint two proxies and must specify the proportional number of votes each proxy is appointed to exercise;
if the Shareholder appoints two proxies and the appointment does not specify the proportion or number of the Shareholder's votes, each proxy may exercise half the votes;
a proxy need not be a Shareholder of the Company; and
if you wish to appoint two proxies, contact Company for another Proxy Form.

Unless the Shareholder specifically directs the proxy how to vote, the proxy may vote as he or she thinks fit or abstain from voting.

If you wish to appoint a proxy, you should complete the attached 'Appointment of Proxy' form and comply with details set out in that form for lodgement of the form with the Company.

The Proxy Form must be signed by the Shareholder or his or her attorney duly authorised in writing or, if the Shareholder is a corporation, either under the seal of the corporation (in accordance with its Constitution) or under the hand of an attorney duly authorised in writing or otherwise signed in accordance with the Corporations Act.

If any attorney or authorised officer signs the Proxy Form on behalf of a Shareholder, the relevant power of attorney or other authority under which it is signed or a certified copy of that power or authority must be deposited with the Proxy Form.

The proxy form must be received not less than 48 hours before the time for holding the General Meeting (i.e. by no later than Saturday, 11.00 AM, 28 November, 2015) by delivering the proxy form to one of the addresses as follows:

Registered Office:
Level 10, 2 Bligh Street, Sydney, NSW, Australia, 2000
Mailing Address:	Facsimile transmission to:
PO Box H125	Within Australia: 02 9235 2203
Australia Square, Sydney	International: +61 2 9235 2203
NSW, Australia 1215

A corporation may appoint a representative who may attend the meeting and vote on behalf of the corporation. Such a representative will have to produce a corporate representative appointment letter from the corporation signed either under the common seal of the corporation (in accordance with its Constitution), or by a duly authorised officer or otherwise signed in accordance with the Corporations Act 2001 before he or she will be permitted to vote.

Voting Exclusion Statement

In addition, in accordance with the Listing Rules, the Company will disregard any votes cast on the following resolutions by the following persons:

In respect to Resolutions 4,

Mr. James Naughton and any of his associates

In respect to Resolution 5,

A person who may participate in the proposed issue or a person who might obtain a benefit (except a benefit solely in the capacity of a holder of securities in the Company) if the resolution is passed and an associate of those persons,

However, the Company will not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders in connection with the business to be conducted at the Annual General Meeting to be held at 11.00 am (AEST) on Monday, 30 November, 2015 at Level 10, 2 Bligh Street, Sydney NSW 2000.

The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company that is relevant to a decision on how to vote on the resolution in the accompanying Notice.

Financial Statements and reports

In accordance with the Company’s Constitution, the business of the Annual General Meeting will include receipt and consideration of the annual financial report of the Company for the Year ended 30 June 2015 together with the declaration of the directors, the directors’ report, the remuneration report and the auditor’s report.

The Company will not provide a hard copy of the Company’s annual financial report to Shareholders unless specifically requested to do so. The Company’s annual financial report is available on its website.

Resolution 1: Adoption of Directors’ Remuneration Report

The Annual Report for the Year Ended 30 June 2015 contains a Remuneration Report in the Directors’ Report which sets out the remuneration policy for the Company and reports the remuneration arrangements in place for the Directors of the Company.

The Corporations Act 2001 (“ Corporations Act ”) requires the agenda for the Annual General Meeting of a listed company to include a resolution for adoption of the Remuneration Report. The Corporations Act expressly provides that the vote on the resolution is advisory only and does not bind the Directors of the Company.

Shareholders attending the Annual General Meeting will be given a reasonable opportunity to ask questions and comment on the Remuneration Report.

The Directors recommend that shareholders vote in favour of Resolution 1.

Resolutions 2 & 3: Election of Charles Straw and David Sutton as Director

The Company’s Constitution requires that at the Company's annual general meeting in every year, onethird of the Directors for the time being, or, if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office, provided always that no Director (except a Managing Director) shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself or herself for re-election.

The Directors to retire at an annual general meeting are those who have been longest in office since their last election, but, as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots.

A Director who retires by rotation under clause 20.2 of the Constitution is eligible for re-election under clause 20.3 of the Constitution.

The Company currently has five Directors, of whom Charles straw and David Sutton are the Directors longest in office since their last election, and retire by rotation and seeks re-election. Both Charles

Straw and David Sutton have been long serving directors with considerable knowledge about the tenements and history of the Company.

The Directors, other than Charles Straw, who has an interest in Resolution 2, recommend that shareholders vote in favour of Resolution 2.

The Directors, other than David Sutton, who has an interest in Resolution 3, recommend that shareholders vote in favour of Resolution 3.

Resolution 4 – Issue of shares to Director James Naughton

Resolution 4 seeks Shareholder approval under ASX Listing Rule 10.11 for the issue of shares to directors of the Company.

Background

Prior to the recent Rights Issue that closed on 9 October, 2015, the Company was in need of working capital from time to time and borrowed money from various sources, to be repaid from the proceeds of the Rights issue or by issue of shares in lieu.

James Naughton advanced the Company the sum of $50,000 before the Rights Issue and has agreed to accept shares issued by the Company in lieu of the debt owed to him, subject to shareholder approval.

The shares will be issued as part of and at the same price of $0.001, as shares being issued under the Rights Issue prospectus. However, the shares issued to the Directors will not carry any entitlement to take options as is the case for the rights issue detailed in the Prospectus.

The Directors believe that the issue of the shares in consideration of outstanding debt will preserve cash of the Company and encourage James Naughton to add value by working to increase the value of the shares on the market.

ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires shareholder approval to be obtained where a company issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply to the issue of shares to James Naughton.

ASX Listing Rule 19.12 defines the term “related party” to mean the same as under the Corporations Act.

Accordingly, Shareholder approval is being sought for the purposes of ASX Listing Rule 10.11 for the issue of shares to James Naughton.

Technical information required under ASX Listing Rule 10.13

In accordance with ASX Listing Rule 10.13, the following information is provided in relation to the issue of shares to the a Director:

(a) the related party is James Naughton (or his nominee) and he is a related party by virtue of being a director of the Company;
(b) the maximum number of Shares to be granted is 50,000,000 fully ordinary paid shares to be issued to James Naughton (or his nominee);
(c) the Shares being issued are fully paid ordinary shares on the same terms and conditions of the Company’s existing ordinary Shares;
(d) as the Shares are being issued in consideration of outstanding debt of $50,000, the Shares will be issued to a price of $0.001 per share and the subscription proceeds will be paid by crediting a loan balance currently owed by the Company to the Director for outstanding loans. Accordingly no funds will be raised. However, the Company's debt will be reduced by the subscription amount;
(e) it is expected that the Shares will be issued shortly after the Annual General Meeting and in any event, no later than 1 month after the date of the Annual General Meeting;
(f) the funds will be used to reduce the Company's liability in relation to outstanding monies owing to the Director;
(g) the issue price of the Shares will be $0.001 per Share, and accordingly, the loan of $50,0000 owing to James Naughton will be reduced to nil.
(h) James Naughton declines to make a recommendation to Shareholders in relation to Resolutions 4, due to his material personal interest in the outcome of the resolution.

The Directors are not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision as to whether it is in the best interests of the Company to pass Resolution 4.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Shares to the related parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of the Shares to the related parties will not reduce the Company's 15% placement capacity pursuant to ASX Listing Rule 7.1.

The Directors (other than James Naughton) recommend that Shareholders vote in favour of Resolution 4.

Resolution 5: Placement of Securities in the future

At the time of issuing this Notice of AGM, there was no specific plan to issue any securities. However, your Board is mindful of adding value for shareholders and in this regard is constantly looking for silver in the ground opportunities and possible acquisitions and worthwhile investments that would complement the Company’s current silver exploration and related operations, in accordance with the Company’s silver strategy announced to the market and as detailed in a recent Rights Issue prospectus. Whilst no agreements or decisions have yet been reached in respect to any new acquisitions, other than those already announced, should such an opportunity arise within 3 months of the AGM, the right to issue the shares in lieu of such acquisition or investment or raise funds in a timely manner for that purpose would allow the transaction to be considered quickly and the opportunity to be taken advantage of.

None of the subscribers pursuant to this issue will be related parties of the Company.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

For the purposes of ASX Listing Rule 7.3, the following information is provided:

The maximum number of securities to be allotted is 1.5 billion;

The Company will issue and allot the securities within 3 months of the date of this meeting, or such later date as the Australian Stock Exchange permits in its discretion;

The issue price of the securities, in the case of ordinary shares, will be no less than $0.0015 per share and in the case of options it will be issued at nil cost but at an exercise price which will be no less than $0.0015 per option.

The Company intends to use the funds raised by the issue of the securities is for retiring any debt, acquisition of investments, working capital and expansion of operations and for any worthwhile purpose as determined by the Directors and detailed above and meets the company’s silver and related strategy.

Where securities are issued to raise working capital, the Company will issue the shares to either sophisticated or professional investors or otherwise in accordance with Section 708 of the Corporations Act 2001;

The terms of the securities issued, if ordinary shares, are as detailed above in respect to their issue price and in respect to their rights are the same as all other ordinary shares issued by the Company as specified in the constitution of the Company. The terms of the securities issued, if they are options, will be as detailed above in respect to their issue price and exercise price and any exercise of options may only happen no later than 5 years from date of issue. Further, if such options are exercised the shares so issued will have rights that are the same as all other ordinary shares issued by the Company as specified in the constitution of the Company.

The other terms of the securities issued, if they are options to subscribe for shares, are as follows:

The option holder cannot participate in new issues without first exercising the options so that the option holder is issued shares prior to the record date for determining entitlements for the new issue;
The exercise price of options issued or number of underlying securities over which it can be exercised may be changed in accordance with Listing Rule 6.22 or any amendment of that Rule from time to time, in respect to any pro-rata rights issue or bonus issue; and
The rights of the option holder on a reorganisation of capital are to be adjusted in accordance with Listing Rule 7.22 or as the Listing Rules provide and as they apply to the reorganisation of capital at the time of the reorganisation.
The period during which the options may be exercised will depend on negotiations with allottees at the time of issue and what Directors may consider appropriate under the circumstances, but will not exceed 5 years from the date of issue.

The intended use of the funds raised from the exercise of the options is for retiring any debt, acquisition of investments, working capital and expansion of operations and for any worthwhile purpose as determined by the Directors.

The Directors recommend that shareholders vote in favour of Resolution 5.

ENQUIRIES

Shareholders are advised to contact Vaz Hovanessian, the Company Secretary, on +61 02 8188 2556 if they have any queries in respect of the matters set out in these documents.

PROXY FORM – SILVER MINES LIMITED

ANNUAL GENERAL MEETING

I/We

==> picture [410 x 48] intentionally omitted <==

being a member of Silver Mines Limited entitled to attend and vote at the Annual General Meeting, hereby

Appoint

Name of proxy OR the Chair of the General Meeting as your proxy

or failing the person so named or, if no person is named, the Chair of the Annual General Meeting, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, as the proxy sees fit, at the Annual General Meeting to be held at 11.00 am (AEST) on Monday, 30 November, 2015 at Level 10, 2 Bligh Street, Sydney NSW 2000, and at any adjournment thereof.

If no directions are given, the Chair will vote in favour of all the Resolutions.

If the Chair of the General Meeting is appointed as your proxy, or may be appointed by default, and you do not wish to direct your proxy how to vote as your proxy in respect of Resolutions 1 to 5 please place a mark in this box.

By marking this box, you acknowledge that the Chair of the Annual General Meeting may exercise your proxy even if he has an interest in the outcome of Resolutions 1-5 and that votes cast by the Chair of the Annual General Meeting for Resolutions 1- 5, other than as proxy holder, will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on Resolutions 1-5 and your votes will not be counted in calculating the required majority if a poll is called on Resolutions 1-5.

OR

Voting on Business of the General Meeting

FOR AGAINST ABSTAIN Resolution 1 – Adoption of Directors’ Remuneration Report Resolution 2 – Re-election of Charles Straw as a Director Resolution 3 – Re-election of David Sutton as a Director Resolution 4– Issue of Shares to James Naughton Resolution 5 – Placement of Securities in the future Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not to be counted in computing the required majority on a poll. Signature of Member(s): Date: ____ Individual or Member 1 Member 2 Member 3 Sole Director/Company Secretary Director Director/Company Secretary

Contact Name: _____ Contact Ph (daytime): _____

ACN 107 452 942

Instructions for Completing ‘Appointment of Proxy’ Form

( Appointing a Proxy ): A member entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to attend and vote on a poll on their behalf. The appointment of a second proxy must be done on a separate copy of the Proxy Form. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member’s voting rights. If a member appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes. A duly appointed proxy need not be a member of the Company.
( Direction to Vote ): A member may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose. Where more than one box is marked on an item the vote will be invalid on that item.

( Signing Instructions ):

( Individual ): Where the holding is in one name, the member must sign.
( Joint Holding ): Where the holding is in more than one name, all of the members should sign.
( Power of Attorney ): If you have not already provided the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.
( Companies ): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held.
( Attending the Meeting ): Completion of a Proxy Form will not prevent individual members from attending the Annual General Meeting in person if they wish. Where a member completes and lodges a valid Proxy Form and attends the Annual General Meeting in person, then the proxy’s authority to speak and vote for that member is suspended while the member is present at the Annual General Meeting.
( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:
(a) post to Level 10, 2 Bligh Street, Sydney, NSW 2000 or PO Box H12, Australia Square, NSW 1215; or
(b) facsimile to the Company on facsimile number (+61 2) 9235 2203,
(c) so that it is received not later than 11.00 am (AEST) on Saturday, 28 November, 2015.

Proxy Forms received later than this time will be invalid.

AI assistant

SILVER MINES LIMITED — AGM Information 2015

65881_rns_2015-10-29_2a47619d-cdce-41ff-be46-b3cfe6f95c04.pdf