SILVER MINES LIMITED — Capital/Financing Update 2007

Feb 20, 2007

PLACEMENT

The Directors of Silver Mines Limited ('the Company') are pleased to announce a placement of \$756,000 through the issue of 3,600,000 ordinary fully paid shares at 21 cents per share to overseas and institutional clients of Martin Place Securities Pty Ltd and Ark Equities Pty Ltd. The proceeds will be used to assess local and international opportunities.

Notice pursuant to section 708A of the Corporations Act 2001

In accordance with the requirements with the section $708$ A $(5)(e)$ of the Corporations Act 2001('the Act')

• The Company issued the placement Shares and Options without disclosure to 1 investors under Part 6D.2 of the Act.
• $\overline{2}$ As at the date of this notice:
• $2.1$ the Company has complied with the provisions of Chapter 2M of the Act as they apply to the Company;
• $2.2$ the Company has complied with section 674 of the Act; and
• $2.3$ there is no excluded information (as defined in section 708A (7) of the Act which is required to be disclosed by the Company.

Dated 21 February 2007

Kevin Lynn Company Secretary

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