SILVER MINES LIMITED — Capital/Financing Update 2012

Oct 1, 2012

Level 5, 17-19 Bridge Street Sydney NSW 2000 P+61 2 9253 0900 F+61 2 9253 0901 www.silverminesltd.com.au ACN 107 452 942

2 October 2012

The Manager Company Announcements Office Australian Stock Exchange 20 Bridge Street SYDNEY NSW 2000

Dear Sir/Madam,

Re: Silver Mines Limited - Securities Purchase Plan

Silver Mines Limited (SVL or the company) is pleased to announce that the Securities Purchase Plan (SPP), which was announced on 31 August 2012, closed 26 September 2012 with the following results:

Fully paid ordinary shares issued	13,885,890
Unlisted options granted	6,942,972

The company is delighted with the result given the volatility that currently exists in the market and would like to thank shareholders for their continued support.

The company will now look to place approximately 15.8 million fully paid ordinary shares and 7.9 million options which make up the shortfall of the SPP with professional and sophisticated investors.

If you have any queries please do not hesitate to contact Richard Holstein on +61 2 9253 0930 or myself.

Yours sincerely

Charles Straw Director

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).

$\mathbf{1}$ ⁺Class of ⁺securities issued or to be issued

Ordinary and Options (unlisted)

• $\overline{2}$ Number of ⁺securities issued or to be issued (if known) or maximum number which may be issued
• Principal of terms $\overline{3}$ 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)

13,885,890 Fully paid ordinary shares; and 6,942,972 Unlisted options.

Fully paid ordinary shares; and

Options (unlisted), exercise price 10 cents expiry 13 November 2012.

⁺ See chapter 19 for defined terms.

4	Do the + securities rank equally 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 distribution) trust, Оľ interest payment the extent to which they do not rank equally, other than relation to the next in dividend, distribution ог interest payment	Yes
5	Issue price or consideration	Nil
6	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	The issue was a result of a securities purchase plan dated and announced to the market on 31 August 2012.
6a	Is the entity an + eligible entity 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	N/A
6b	The date the security holder resolution under rule 7.1A was passed	N/A
6с	Number of + securities issued without security holder approval under rule 7.1	N/A

⁺ See chapter 19 for defined terms.

• 6d Number of ⁺securities issued $N/A$ with security holder approval under rule 7.1A
• 6e Number of *securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting)
• 6f Number of securities issued under an exception in rule 7.2
• If securities issued under rule $N/A$ 6g 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 issue capacity under rule 7.1 and rule 7.1A - complete Annexure 1 and release to ASX Market Announcements
• Dates of entering 'securities N/A $\overline{7}$ into uncertificated holdings or despatch of certificates
• 8 Number and ⁺class of all *securities quoted on ASX (including the securities in section 2 if applicable)

Number	+ Class
163,997,091	Fully paid ordinary shares
13,609,882	Options listed, exercise price 35 cents, expiring 31 October 2012

$N/A$

• See chapter 19 for defined terms.

$N/A$

$N/A$

		Number	+ Class
9	Number and + class of all *securities not quoted on ASX (including the securities in section 2 if applicable)	13, 195, 343	Unlisted options, exercise price 10 cents, Expiry 13 November 2012.
		2,000,000	Unlisted options, exercise price 40 cents, Expiry 27 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)

ıyeu

Part 2 - Bonus issue or pro rata issue

11	holder security Is approval required?	N/A
12	Is the issue renounceable or non- renounceable?	N/A
13	Ratio in which the *securities will be offered	N/A
14	+ Class of + securities to which the offer relates	N/A
$15 \,$	*Record date to determine entitlements	N/A
16	Will holdings different N/A on registers (or subregisters) be calculating aggregated for entitlements?
17	Policy for deciding entitlements in relation to fractions	N/A

⁺ See chapter 19 for defined terms.

18	Names of countries in which the entity has + security holders who will not be sent new issue documents	N/A
	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	N/A
20	Names of any underwriters	N/A
21	Amount of any underwriting fee or commission	N/A
22	Names of any brokers to the issue	N/A

• Fee or commission payable to $\sqrt{\mathsf{N/A}}$ $23$ the broker to the issue
• Amount of any handling fee N/A $24$ payable to brokers who lodge acceptances or renunciations on behalf of ⁺security holders
• If the issue is contingent on $N/A$ $25$ *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
• If the entity has issued options, $\boxed{\ }$ $27$ and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders
• $\bf{28}$ Date rights trading will begin (if $N/A$ applicable)
• Date rights trading will end (if $N/A$ 29 applicable)

Appendix 3B Page 5

$\sim$	-- ÷
4/k

⁺ See chapter 19 for defined terms.

Appendix 3B New issue announcement

30	How do + security holders sell N/A their entitlements in full through a broker?
31	How do + security holders sell N/A of their entitlements part through a broker and accept for the balance?
32	How do + security holders dispose of their entitlements (except by sale through a broker)?	N/A
33	+ Despatch date	N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• Type of securities 34 (tick one)
• $(a)$ Securities described in Part 1
• All other securities

$(b)$

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

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

If the 'securities are 'equity securities, a distribution schedule of the additional 36 *securities setting out the number of holders in the categories $1 - 1,000$ $1,001 - 5,000$ $5,001 - 10,000$

⁺ See chapter 19 for defined terms.

$10,001 - 100,000$ 100,001 and over

37

A copy of any trust deed for the additional *securities

Entities that have ticked box 34(b)

38 39	Number of securities for which + quotation is sought Class of + securities for which	N/A N/A
	quotation is sought
40	Do the + securities rank equally 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 оr interest payment	N/A
41	Reason for request for quotation now	N/A
	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.

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

+ Class
N/A

Quotation agreement

• ⁺Quotation of our additional 'securities is in ASX's absolute discretion. ASX $\mathbf{I}$ may quote the 'securities on any conditions it decides.
• We warrant the following to ASX. $\overline{2}$
• 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.
• We will indemnify ASX to the fullest extent permitted by law in respect of any $\overline{3}$ claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• We give ASX the information and documents required by this form. If any $\overline{4}$ 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.

⁺ See chapter 19 for defined terms.

Sign here:	Date: 2 October 2012 (Director/Company secretary)

Charles Straw

Print name:

$\mathbb{B}^2$

$= 22 = 22 = 22$

⁺ See chapter 19 for defined terms.

Silver Mines Limited

Top 20 Holdings as at 02-10-2012
Security Classes Selected for this Report:
Fully Paid Ordinary Shares

ully Paid Ordinary Shares
Holder Name	02-10-2012	℅
P & WVERHOEF PTY LTD	2,575,667	1.585
JP MORGAN NOMINEES AUSTRALIA LIMITED	2,564,833	1.578
THE HOUSE OF DARE PTY LTD	2,300,000	1.415
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	2,162,332	1.331
WALPETT ENGINEERING PTY LTD	2,120,876	1.305
LEFTONE NOMINEES PTY LTD	2,052,158	1.263
LUJETA PTY LTD	2,000,000	1.231
& MRS VICTORIA JEANETTE ZAMBONETTI MR FRANK MARIO ZAMBONETTI	1,916,667	1.180
MR JOHN DARROCH & MRS GLORIA DARROCH & MR RICHARD DARROCH & MS HELEN DARROCH <j ald<="" darroch="" n="" private,="" soo="" td="">		1.169			1.169
J P MORGAN NOMINEES AUSTRALIA LIMITED	1,835,890	1.130
MR MICHAEL THOMAS HAJNIK	1,800,000	1,108
PRECIOUS METALS INVESTMENTS LTD	1,800,000	1.108
BIGSON PTY LTD	1,774,889	1.092
CUSTODIAL SERVICES LIMITED	1,402,611	0.863
S LIMITED CATHOLIC CHURCH INSURANCE	1,385,262	0.852
CALAMA HOLDINGS PTY LTD	1,383,333	0.851
OPTEX EXCHANGE PTY LIMITED	1,264,160	0.778
ENVAT PTY LTD LENVAT SUPER FUND A/C	1,107,521	0.682
LTD DAVID E PERKS & ASSOCS PTY	1,016,667	0.626
PRIME SECURITIES INVESTMENT GROUP PTY LTD	1,000,000	0.615
SFB INVESTMENTS PTY LIMITED	1,000,000	$0.615 -$
DR CHRISTOPHER JOHN LOUREY	1,000,000	0.615
MR WILHELM KUHLMANN	1,000,000	0.615
LOEB ARON & COMPANY LTD	1,000,000	0.615
Totals for Top 20	39,362,867 24.224

39,362,867 24.224

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$\frac{1}{10}$ is

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Silver Mines Limited

Analysis of Fully Paid Ordinary Shares as at 2 October 2012

Holding Ranges $1 - 1,000$	Holders 89	Total Units 10,797	% 0.007
$1,001 - 5,000$	326	1,055,025	0.649
$5,001 - 10,000$	362	3,096,019	1.905
$10,001 - 100,000$	1.041	41,531,454	25.558
100,001 - 99,999,999	332	118,303,796	71.881
Totals		163,997,091	100.0

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Top 20 Holdings as at 02-10-2012

Security Classes Selected for this Report:
Unlisted Options \$0.10 expire 13/11/2013

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Holder Name	02-10-2012	$\%$
TAYCOL NOMINEES PTY LTD	2,083,333	15,788
NUTSVILLE PTY LTD	500,000	3.789
MR GOH CHOR HEOK	266,667	2.021
MS ANG ING KIN	266,667	2.021
DR CHRISTOPHER LOUREY	250,000	1.895
FD PRIME SECURITIES INVESTMENT GROUP PTY L	250,000	1,895
MR DENNIS LOWE & MRS YVONNE LOWE	250,000	1,895
MR TONY ADAMS	166,667	1.263
HALF BROTHER CAPITAL LIMITED	166,667	1.263
SAMS WATCHMAKER JEWELLER PTY LTD	154,167	1.168
MR GEOFFREY HAROLD POLLOCK	133,333	1.010
MR ANTHONY CARTER	125,000	0.947
BURE PTY LTD	100,000	0.758
FUTURITY ASCENT PTY LTD	100,000	0.758
URQUHART MR CAMERON URQUHART & MRS LINDA SHANE	100,000	0.758
ANNA CARINA PTY LTD	92,000	0.697
DAYTON WAY FINANCIAL LTD	83,335	0.632
CUSTODIAL SERVICES LIMITED	83,334	0.632
MR LEWIS MARKS	83,334	0.632
TROMSO PTY LIMITED	83,334	0.632
FUND A/C> REST HOLDINGS PTY LTD <superannuation< td="">	83,334	0.632		83,334	0.632
WALPETT ENGINEERING PTY LTD	83,334	0.632
E PROPERTIES PTY LTD	83,334	0.632
LEFTONE NOMINEES PTY LTD	83,334	0.632
NUTSVILLE PTY LTD	83,334	0.632
MR ANTHONY JOHN VETTER	83,334	0.632
LASTA NOMINEES PTY LTD	83,334	0.632
MRS JANE MIRIAM FRANCIS	83,334	0.632
FORSYTH BARR CUSTODIANS LTD	83,334	0.632
PADSYS PTY LTD	83,334	0.632
BONORD PTY LTD	83,334	0.632
MR PATRICK VINCENT TIERNEY & MRS ERIN MARY TIERNEY	83,334	0.632
PROF SWEE ENG CHEN	83,334	0.632
MR ANDREW BROAD	83,334	0.632
MR DAVID SIVEI WU	83,334	0.632
DAVID E PERKS & ASSOCS PTY LTD	83,334	0.632

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Top 20 Holdings as at 02-10-2012

Registry Management Services : Boardroom Pty Limited ABN 14 003 209 836 www.boardroomlimited.com.au

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Analysis of Holdings as at 02-10-2012 Silver Mines Limited

Security Classes:

Unlisted Options \$0.10 expire 13/11/2013

00.000	13,195,343	155	Totals
34.956	4,612,501		100,001-99,999,999,999
64.959	8,571,592	$\frac{4}{1}$	10,001-100,000
0.076	10,000		5,001-10,000
0.009	1,250		1,001-5,000
0.000			$1 - 1,000$
ಸಿ	Total Units	Holders	Holdings Ranges