SILVER MINES LIMITED — Capital/Financing Update 2015

Aug 18, 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

To: Australian Securities Exchange Ltd (ASX) From: Silver Mines Limited (ASX: SVL) Date: 19 August, 2015 Subject: Company Update & Indicative Timetable for Rights Issue

Company Update

Silver Mines Limited (SVL or the Company) is pleased to provide an update on its activities to keep the market fully informed in accordance with listing rule 3.1.

On 5 August 2015, SVL securities were placed in trading halt and subsequently a request was made for the securities to be suspended, pending an announcement to the market regarding a Financing/Underwriting arrangement that is considered significant and material to the Company and to the success of the proposed Rights Issue. The agreements and the prospectus are still being worked through and the terms are confidential until the prospectus is finalised and released to ASX and lodged with ASIC.

Further to this previous announcement, the Company can now also advise of a proposed timetable (below) with respect to the planned 4 for 1 renounceable rights issue at a price of A$0.001 with free attaching A$0.003 option on a 1 for 2 basis.

Accordingly the securities will remain suspended until the prospectus is lodged In accordance with the timetable below.

Indicative Timetable

Lodgment of Prospectus and Appendix 3B with ASIC/ASX 24 August 2015 Notice to Optionholders 24 August, 2015 Notice to Shareholders containing appendix 3B and timetable 25 August, 2015 Shares commence trading on an Ex Rights basis 26 August, 2015 Record Date for determining entitlements (7pm EST) 28 August, 2015 Prospectus and Entitlement and Acceptance form dispatched to shareholders 2 September, 2015 Opening date of the offer 2 September, 2015 Rights trading end date 28 September, 2015 New Securities quoted on a deferred settlement basis 30 September, 2015 Closing date of the offer 6 October, 2015 ASX notified of shortfall 9 October, 2015 Issue Date and advice to ASX by noon of entry into sub-register (deferred settlement ends) 13 October, 2015 New Securities commence trading on a normal T+3 basis 14 October, 2015 Date of dispatch of holding statements for New Securities 15 October, 2015

These dates are indicative only and subject to change without notice.

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The Company expects it will be in a position to update the market on its financing initiatives by Monday 24[th] August 2015 and request the lifting of the suspension.

Silver Mines reiterates its commitment to a Silver focused growth strategy with a goal of providing above average returns to shareholders by maximizing leverage to the Silver Price in what the Board perceives will be a rising Silver Price environment.

The Board has concluded that SVL’s competitive advantage is to evaluate, acquire and explore opportunistically priced Silver Deposits in the current low priced Silver Market. A key focus of this includes acquiring known silver deposits with demonstrated JORC resources that provide a low entry price to silver assets on a per ounce basis. Adding silver ounces and continuing to accumulate additional silver resources will provide a backing per share on a silver ounce in the ground per share basis.

In effect, SVL has been conceived as a “Silver in the ground” ETF with the value enhancing potential to expand silver and other precious metal ownership and upgrade the quality of existing silver resources with minimal equity dilution, unlike above ground ETF’s.

By order of the board Silver Mines Limited.

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