SILVER MINES LIMITED — Interim / Quarterly Report 2012

Oct 30, 2012

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity

	Name of entity
	SILVER MINES LIMITED
	ABN 45 107 452 942 Consolidated statement of cash flows
			30 September 2012
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Pre paid drilling Net Operating Cash Flows		Current quarter $A’000		Year to date (3months) $A’000
		(391) (310) 3 (1)		(391) (310) 3 (1)
		(699)		(699)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- (3) - - -		- (3) - - -
		(3)		(3)
		(702)		(702)

• See chapter 19 for defined terms.

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1.13 Total operating and investing cash flows (brought forward)	(702)	(702)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows	830	830
	830	830
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	128 800	128 800
	928	928

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		21
1.25	Explanation necessaryfor an understandingof the transactions
	Director Fees

Non-cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1	Loan facilities
3.2	Credit standby arrangements

Amount available	Amount used
$A’000	$A’000

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	300
	300
Total	600

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details)	16 912 - -	26
		774
		-
		-
Total: cash at end of quarter(item 1.22)	928	800

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	~~-~~

• See chapter 19 for defined terms.

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Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	163,997,091	163,997,091
	15,385,890	15,385,890	6 cents per share	6 cents per share
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

• See chapter 19 for defined terms.

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7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	13,609,882 13,195,339 2,000,000 8,500,000	13,609,882 - - -	Exercise price Listed Options exercisable at 35 cents per share Unlisted Options exercisable at 10 cents per share Unlisted Options, exercise price 40 cents, Expiry 27 August 2013. Vest – 27 August 2011 Unlisted Employee Options, exercise price 50 cents, Unlisted	Expiry date Expiring 31 October 2012 Expiring 13 Nov 2013 Expiry 27 August 2013. Vest – 27 August 2011 Expiry Date 23 December 2015
	6,942,972	-	Unlisted Options exercisable at 10 cents per share	Expiring 13 Nov 2013
	1,500,000	-	Performance Rights	-
	3,500,000 2,000,000 1,500,000	- - -	Employee Options, exercise price 20 cents Unlisted Options, exercise price 24 cents Performance Rights	Expiry Date 6 July 2012 Expiry 27 August 2012.Vest 27 February 2011 -
7.11 Debentures (totals only)
7.12 Unsecured notes(totals only)

Compliance statement

1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• See chapter 19 for defined terms.

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• 2 This statement does give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: .. October 2012.............. ( ~~Director/~~ Company secretary) Print name: ...Kevin Lynn......................................................

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==

• See chapter 19 for defined terms.

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