SILVER MINES LIMITED — Capital/Financing Update 2014

Nov 27, 2014

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28 November 2014

The Manager ASX Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000

Appendix 3B and Notice under Section 708A(5)(e) Corporations Act

Today, Silver Mines Limited ("the Company") issued 13,000,000 fully paid ordinary shares in accordance with the terms of its convertible securities agreement with Bergen Global Opportunity Fund II, LLC. This is the final tranche to be converted in relation to this agreement.

Accordingly the Company gives notice under section 708A(5)(e) of the Corporations Act 2001 (Cth) (the "Corporations Act") that:

1. the abovementioned ordinary shares were issued without disclosure to investors under Part 6D.2 of the Corporations Act ;

2. as at the date of this notice the Company has complied with:

3. (a) the provisions of Chapter 2M Corporations Act as they apply to the Company; and

4. (b) section 674 Corporations Act ; and

5. as at the date of this notice there is no "excluded information" (as defined in subsection 708A(7) of the Corporations Act ) which is required to be disclosed by the Company.

If you have any queries regarding the above please do not hesitate to contact the undersigned at info@silverminesltd.com.au.

Yours faithfully

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Charles Straw MANAGING 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 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005, 01/08/12, 04/03/13.

Name of entity

Silver Mines Limited ( Compan y )

ABN

45 107 452 942

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 Fully Paid Ordinary Shares be issued

2 Number of[+] securities issued or 13,000,000 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) 4 Do the+securities rank equally in all respects from the+issue date 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 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 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		Fully Paid Ordinary Shares Fully Paid Ordinary Shares will rank pari passu with existing Fully Paid Ordinary Shares.
		The Fully Paid Ordinary Shares will rank pari passu with existing Fully Paid Ordinary Shares.
		$0.002 per Fully Paid Ordinary Share.
		The purpose of the issue relates to the partial and final conversion of the convertible security which was announced on 2 September 2014.
		Not applicable

6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1 6d Number of+securities issued 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 6g If+securities issued under rule 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 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	Not applicable
	Nil
	Not applicable
	Not applicable.
	Not applicable.
	Not applicable.
	Not applicable.
	Attached

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7 +Issue dates 28 November 2014
Number +Class
8 Number and +class of all
+securities quoted on ASX Fully Paid Ordinary
Shares
( including the securities in 559,822,714
section 2 if applicable)
Number +Class
9 Number +securities not quoted on ASX and +class of all 5,800,000 Unlisted options exercise
price 4.3 cents, expiry 31
( including the securities in
section 2 if applicable) May 2017.
8,500,000
Unlisted options exercise
price 50 cents, expiry 23
December 2015.
83,200,135 Unlisted Options
exercisable at $0.01 per
Option into ordinary
Shares on or before 13
December 2015 from
Offer.
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10 Dividend policy (in the case of a Not applicable trust, distribution policy) on the increased capital (interests)

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 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	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable

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) 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	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable

of their entitlements (except by sale through a broker)?

• 33 + Issue date

Not applicable

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 are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000

• 1,001 - 5,000

• 5,001 - 10,000

• 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 +quotation is sought Not applicable

39 Class of +securities for which quotation is sought 40 Do the+securities rank equally in all respects from the+issue date 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 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another+security, clearly identify that other+security)	Not applicable
	Not applicable
	Not applicable

Number +Class 42 Number +securities and quoted +class on of ASX all Not applicable ( including the securities in clause 38)

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.

• 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.

Sign here: (Director/ ~~Company secretary)~~ Print name: Charles Straw

Date: 28 November 2014

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

Rule 7.1 – Issues exceeding 15% of capital	Rule 7.1 – Issues exceeding 15% of capital
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
Insertnumber of fully paid+ordinary securities on issue 12 months before the +issue date or date of agreement to issue	220,456,475
Addthe following: • Number of fully paid+ordinary securities issued in that 12 month period under an exception in rule 7.2 • Number of fully paid+ordinary securities issued in that 12 month period with shareholder approval • Number of partly paid+ordinary securities that became fully paid in that 12 month period	166,400,239 Date (App3B) Fully paid ordinary share 31/01/2014 7,250,000 11/02/2014 12,500,000 10/03/2014 10,000,000 11/06/2014 12,500,000 26/06/2014 21,250,000 25/07/2014 10,000,000 8/08/2014 16,466,000 12/09/2014 10,000,000 19/09/2014 10,000,000 10/10/2014 15,000,000 20/10/2014 35,000,000 28/11/2014 13,000,000 Total 172,966,000

Note:

• Include only ordinary securities here – other classes of equity securities cannot be added

• Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• It may be useful to set out issues of securities on different dates as separate line items Subtract the number of fully paid[+] ordinary Nil securities cancelled during that 12 month period “A” 559,822,714

Step 2: Calculate 15% of “A”

“B” 0.15 [Note: this value cannot be changed] Multiply “A” by 0.15 83,973,407

Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used

Insert number of[+] equity securities issued or agreed to be issued in that 12 month period not counting those issued:

• Under an exception in rule 7.2

• Under rule 7.1A

• With security holder approval under rule 7.1 or rule 7.4

Note:

• This applies to equity securities, unless specifically excluded – not just ordinary securities

• Include here (if applicable) the securities the subject of the Appendix 3B to which

this form is annexed • It may be useful to set out issues of securities on different dates as separate line items
“C”	Nil
Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1
“A” x 0.15 Note: number must be same as shown in Step 2	83,973,407
Subtract“C” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.15] – “C”	83,973,407 [Note: this is the remaining placement capacity under rule 7.1]

placement capacity under rule 7.1
“A” x 0.15	83,973,407
Note: number must be same as shown in
Step 2
Subtract“C”	Nil
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	83,973,407
	[Note: this is the remaining placement
	capacity under rule 7.1]

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Rule 7.1A – Additional placement capacity for eligible entities	Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
“A” Note: number must be same as shown in Step 1 of Part 1	Not applicable
Step 2: Calculate 10% of “A”
“D”	0.10 Note: this value cannot be changed
Multiply“A” by 0.10	Nil
Step 3: Calculate “E”, the amount of placement capacity under rule

7.1A that has already been used

7.1A that has already been used	7.1A that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items	Nil
“E”	Nil
Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	Nil
Subtract“E” Note: number must be same as shown in Step 3	Nil
Total[“A” x 0.10] – “E”	Nil Note: this is the remaining placement capacity under rule 7.1A

“A” x 0.10	Nil
Note: number must be same as shown in
Step 2
Subtract“E”	Nil
Note: number must be same as shown in
Step 3
Total[“A” x 0.10] – “E”	Nil
	Note: this is the remaining placement
	capacity under rule 7.1A