SILVER MINES LIMITED — Capital/Financing Update 2012

Nov 5, 2012

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6 November 2012

Company Announcement Officer Australian Securities Exchange 20 Bridge Street, SYDNEY NSW 2000

Dear Sir/Madam,

Re: QUOTATION OF OPTIONS

Silver Mines Limited (ASX: SVL ) seeks the listing of 14,140,343 unlisted options, exercise price 10 cents, Expiry 13 November 2013.

Find attached Appendix 3B, Top 20 and Option holder spread.

Yours sincerely

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Kevin Lynn Company Secretary

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 to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the +securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	New options (from unlisted to listed)
	14,140,343
	Exercise price 10 cents, Expiry 13 November 2013.

• See chapter 19 for defined terms.

Appendix 3B Page 1

01/08/2012

Appendix 3B New issue announcement

4 Do the[+] securities rank equally N/A 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 N/A 6 Purpose of the issue N/A (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 N/A with security holder approval under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 2

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Appendix 3B New issue announcement

6e Number of[+] securities issued N/A with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of securities issued N/A under 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 N/A issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 Dates of entering +securities 6 November 2012 into uncertificated holdings or despatch of certificates Number +Class 8 Number and +class of all 165,887,091 Fully paid ordinary +securities quoted on ASX shares. ( including the securities in section 2 if applicable) 14,140,343 Listed options, exercise price 10 cents, Expiry 13 November 2013.

• See chapter 19 for defined terms.

Appendix 3B Page 3

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Appendix 3B New issue announcement

Number +Class 9 Number and +class of all 2,000,000 Unlisted options, +securities not quoted on ASX exercise price 40 ( including the securities in cents, Expiry 27 section 2 if applicable) August 2013. Vest ‐ 27 August 2011. 8,500,000 Unlisted options, 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

• See chapter 19 for defined terms.

Appendix 3B Page 4

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Appendix 3B New issue announcement

18 Names of countries in which the 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 acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, 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 applicable) 29 Date rights trading will end (if applicable)	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 5

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Appendix 3B New issue announcement

30 How do+security holders sell their entitlements_in full_through a broker? 31 How do+security holders sell part of their entitlements through a broker and accept for the balance? 32 How do+security holders dispose of their entitlements (except by sale through a broker)? 33 +Despatch date	N/A
	N/A
	N/A
	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) �[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 setting out the number of holders in the categories[+][securities are ][+][equity securities, a distribution schedule of the additional ] 1 ‐ 1,000 1,001 ‐ 5,000 5,001 ‐ 10,000

• See chapter 19 for defined terms.

Appendix 3B Page 6

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Appendix 3B New issue announcement

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 quotation is sought

N/A

40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted[+] securities?

N/A

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)

• See chapter 19 for defined terms.

Appendix 3B Page 7

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Appendix 3B New issue announcement

• 42 Number and +class of all +securities quoted on ASX ( including the securities in clause 38)

Number	+Class
N/A

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.

• See chapter 19 for defined terms.

Appendix 3B Page 8

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Appendix 3B New issue announcement

• 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.

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Sign here: (Company Secretary) Print name: Kevin Lynn

Date: 6 November 2012

• See chapter 19 for defined terms.

Appendix 3B Page 9

01/08/2012

Silver Mines Limited Unlisted Options $0.10 expire 13/11/2013 Top 20 Holdings as at 06-11-2012

Rank	Holder Name	No.	%
1	TAYCOL NOMINEES PTY LTD	1,575,000	11.138
2	NUTSVILLE PTY LTD	500,000	3.536
3	SANPEREZ PTY LTD	500,000	3.536
4	FGC GOLF SHOP LIMITED	325,000	2.298
5	MR GOH CHOR HEOK	266,667	1.886
6	MS ANG ING KIN	266,667	1.886
7	DR CHRISTOPHER LOUREY	250,000	1.768
8	MR DENNIS LOWE & MRS YVONNE LOWE	250,000	1.768
9	PRIME SECURITIES INVESTMENT GROUP PTY LTD	250,000	1.768
10	CORPORATE PROPERTY SERVICES PTY LTD	216,667	1.532
11	CALAMA HOLDINGS PTY LTD	216,666	1.532
12	MR TONY ADAMS	166,667	1.179
13	HALF BROTHER CAPITAL LIMITED	166,667	1.179
14	SAMS WATCHMAKER JEWELLER PTY LTD	154,167	1.090
15	BALCARA ENTERPRISES PTY LTD	150,000	1.061
16	MR GEOFFREY HAROLD POLLOCK	133,333	0.943
17	MR ANTHONY CARTER	125,000	0.884
18	BURE PTY LTD	100,000	0.707
19	FUTURITY ASCENT PTY LTD	100,000	0.707
20	MR CAMERON URQUHART & MRS LINDA SHANE URQUHART	100,000	0.707
		5,812,501	41.106
	Total Options	14,140,343

Silver Mines Limited Analysis of Holdings as at 06-11-2012

Security Classes

Unlisted Options $0.10 expire 13/11/2013

Holdings Ranges	Holders		Total Units	%
1-1,000		0	0		0.000
1,001-5,000		1	1,250		0.009
5,001-10,000		0	0		0.000
10,001-100,000		142	8,626,592		61.007
100,001-99,999,999,99		17	5,512,501		38.984
Totals		160	14,140,343		100.000