SILVER MINES LIMITED — Capital/Financing Update 2017

Mar 5, 2017

Level 11, 52 Phillip St Sydney NSW 2000 P: +61 2 8316 3997 F: +61 2 8316 3999 Info@silvermines.com.au www.silvermines.com.au

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6[th] March 2017

Company Announcement Officer ASX Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000

SHARE PURCHASE PLAN AND MINIMUM HOLDING SHARE BUY-BACK

Highlights

• Offering to eligible shareholders the opportunity to participate in the Silver Mines Share Purchase Plan (SPP) at a price of $0.165 per share.

• Under the SPP, eligible shareholders may acquire up to A$15,000 worth of ordinary

shares in the Company without incurring brokerage or other transaction costs.

• The SPP is underwritten and capped at A$3 million.

• Offering a Buy-Back to those shareholders holding parcels of shares valued less than A$500 in the Company.

Share Purchase Plan

Silver Mines Limited ( Silver Mines or the Company ) is pleased to announce that it intends to offer shareholders the opportunity to apply for new, fully paid ordinary shares in Silver Mines under an underwritten Share Purchase Plan ( SPP ) to raise up to A$3 million. The SPP provides the opportunity for eligible shareholders to subscribe for up to $15,000 worth of new shares, at a price of $0.165 per share. The offer is at the same price as the December 2016 placement to institutional, professional and sophisticated investors.

Eligible shareholders may purchase new shares in parcels of $5,000, $10,000 or $15,000, without incurring brokerage or other transaction costs.

Shareholders will be eligible to participate in the SPP if they:

• a) were a registered holder of Silver Mines shares at 5:00 pm (AEDT) on Friday 3[rd] March 2017, with a registered address in Australia or New Zealand;

• b) have not been issued more than $15,000 worth of SVL shares in the previous 12 months; and

• c) are not in the United States, or acting for the account or, or benefit of a person in the United States.

Silver Mines Limited

ABN: 45 107 452 942

Level 11, 52 Phillip St Sydney NSW 2000 P: +61 2 8316 3997 F: +61 2 8316 3999 Info@silvermines.com.au www.silvermines.com.au

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Minimum Holding Share Buy-Back

Simultaneously to the SPP, Silver Mines intends to undertake a buy-back of ordinary shares for holders of less than marketable parcels of shares in the company ( Buy-Back ). Under the ASX Listing Rules, any shareholding valued at less than A$500 is considered to be less than a “marketable parcel” of shares.

The Buy-Back will allow shareholders who hold less than marketable parcels of shares in the Company, to sell their shares back to the Company at the Buy-Back price of $0.185 per share, which is determined through the calculation of the Volume Weighted Average Price for the 5-day trading period preceding 3[rd] March 2017. These shares will be cancelled once transferred to the Company in accordance with the Corporations Act 2001 .

Further details of the SPP and Buy-Back will be provided on Wednesday, 8[th] March 2017.

For and on behalf of the Board

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Trent Franklin Company Secretary

Silver Mines Limited ABN: 45 107 452 942