SILVER MINES LIMITED — Capital/Financing Update 2015

Sep 29, 2015

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Silver Mines Limited ABN: 45 107 452 942 10[th] Floor, 2 Bligh Street, Sydney NSW 2000 P: +61 2 8188 2557 F: +61 2 9235 2203

30 September 2015

ASX ANNOUNCEMENT

SUPPLEMENTARY PROSPECTUS FOR SILVER MINES LIMITED

Silver Mines Limited (ASX: SVL) ( Company ) encloses a copy of the supplementary prospectus in relation to its four for one fully underwritten pro rata renounceable rights issue of new fully paid ordinary shares in the Company at $0.001 per new share, together with one free new option for every two new shares subscribed for under the rights issue announced by the Company on Tuesday, 1 September 2015 ( Supplementary Prospectus ).

The purpose of the Supplementary Prospectus is to extend the closing date for the rights issue to 5pm, Friday, 9 October 2015 and to provide a revised timetable resulting from such extension to the closing date by supplementing the replacement prospectus dated 9 September 2015 ( Replacement Prospectus ).

The Supplementary Prospectus was lodged with the Australian Securities and Investments Commission earlier today.

Further information

The Replacement Prospectus and Supplementary Prospectus are available and copies can be obtained by calling the Share Registry for the Company referred to below. Offers of securities under the Rights Issue will be made in, or accompanied by a copy of, each of the Replacement Prospectus and the Supplementary Prospectus. Eligible shareholders should consider the Replacement Prospectus and the Supplementary Prospectus in deciding whether to acquire securities under the Rights Issue. Eligible shareholders who want to acquire securities under the Rights Issue will need to complete the personalised entitlement and acceptance form that is in or accompanies the Replacement Prospectus.

Shareholders who have questions regarding the Rights Issue should phone the Share Registry for the Company on (02) 9290 9600 (within Australia) or +61 2 9290 9600 (from outside Australia) at any time between 9am and 5pm (Sydney time) on Monday to Friday during the Rights Issue period.

Order of the Board Silver Mines Limited

Davide Bosio DJ Carmichael Level 14, 191 St George's Terrace Perth WA 6000 Tel: 08 9263 5200

Vaz Hovanessian Fern Street Partners Level 10, 2 Bligh St Sydney NSW 2000 Tel: 02 8188 2555

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Forward Looking Statements

This release includes forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “continue”, and “guidance”, or other similar words and may include, without limitation statements regarding plans, strategies and objectives of management, anticipated production or project development commencement dates and expected costs or production outputs. Forward looking statements in this release include, but are not limited to, the capital and operating cost estimates and economic analyses from the study.

Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of resources or reserves, political and social risks, changes to the regulatory framework within which the Company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

Forward looking statements are based on the Company and its management’s good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Company’s business and operations in the future. The Company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the Company’s business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Company or management or beyond the Company’s control.

Although the Company attempts to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be anticipated, estimated or intended, and many events are beyond the reasonable control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Forward looking statements in this release are given as at the date of issue only. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

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SUPPLEMENTARY PROSPECTUS

Silver Mines Limited ACN 107 452 942

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1. IMPORTANT NOTICE

This Supplementary Prospectus is dated 30 September 2015 and is a supplement to the replacement prospectus issued by Silver Mines Limited ACN 107 452 942 ( SVL or the Company ) on 9 September 2015 ( Prospectus ). This Supplementary Prospectus was lodged with ASIC on 30 September 2015. Neither ASIC nor ASX take any responsibility for the contents of this Supplementary Prospectus.

On 30 September 2015, the Company announced to the ASX that it proposed to revise the timetable for the Rights Issue as set out in the Prospectus.

Section 3 of this Supplementary Prospectus sets out the revised Rights Issue timetable which reflects the new closing date of 5pm on Friday, 9 October 2015, the consequential changes to the remaining timetable dates and to note the new expiration date for the New Options of 5pm on 16 October 2017. This Supplementary Prospectus is to be read together with the Prospectus. If there is a conflict between the Prospectus and this Supplementary Prospectus, this Supplementary Prospectus will prevail to the extent of any such conflict.

Terms defined in this Supplementary Prospectus have the same meaning as in the Prospectus.

2. REASONS FOR THIS SUPPLEMENTARY PROSPECTUS

The purpose of this Supplementary Prospectus is to extend the closing date for the Rights Issue and to provide a revised timetable resulting from such extension to the closing date.

3. UPDATES TO THE PROSPECTUS

3.1 Key Dates

This Supplementary Prospectus includes the timetable in the section titled “C. Key Dates for the Rights Issue” of the Prospectus which is to be replaced with the following timetable:

This is a Supplementary Prospectus and must be read in conjunction with the Prospectus dated 9 September 2015 issued by Silver Mines Limited ACN 107 452 942.

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Event	Proposed Date
Announcement of Rights Issue and lodgement of the Original Prospectus with ASX and ASIC	Tuesday, 1 September 2015
Lodgement of the Prospectus with ASIC	Wednesday, 9 September 2015
Shares quoted on an 'ex' rights basis and right trading on ASX begins	Thursday, 3 September 2015
Record Date for the Rights Issue	5pm, Monday, 7 September 2015
Rights Issue opened	Thursday, 10 September 2015
Rights trading on ASX ended	4 pm, Monday, 28 September 2015
New Shares and New Options quoted on a deferred settlement basis	Tuesday, 29 September 2015
Rights Issue closes*	5pm, Friday, 9 October 2015
Issue Date for New Shares and New Options issued under the Rights Issue (deferred settlement trading ends)	Friday, 16 October 2015
Normal trading of New Shares and New Options issued under the Rights Issue expected to commence on ASX	Monday, 19 October 2015
Expected date of dispatch of holding statements for New Shares and New Options	Tuesday, 20 October 2015
Expiry date for New Options	5pm, 16 October 2017

3.2 Consequential amendments

All other references to key dates for the Rights Issue in the Prospectus are to be replaced with the revised dates set out in section 3.1 of this Supplementary Prospectus.

4. DIRECTORS’ AUTHORISATION

This Supplementary Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

This is a Supplementary Prospectus and must be read in conjunction with the Prospectus dated 9 September 2015 issued by Silver Mines Limited ACN 107 452 942.

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In accordance with section 720 of the Corporations Act 2001 (Cth), each Director has consented to the lodgement of this Supplementary Prospectus with ASIC.

Signed for and on behalf of the Company:

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David Sutton Executive Chairman

Dated: 30 September 2015

Note: All other details in relation to the Prospectus remain substantially unchanged. The Directors believe that the changes to the Prospectus noted in this Supplementary Prospectus are not materially adverse from the point of view of an investor.

This is a Supplementary Prospectus and must be read in conjunction with the Prospectus dated 9 September 2015 issued by Silver Mines Limited ACN 107 452 942. Page 3 of 3