SILVER MINES LIMITED — Share Issue/Capital Change 2012

Oct 1, 2012

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 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12

Name of entity

Silver Mines Limited

ABN 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).

$\mathbf 1$ ⁺Class of ⁺securities issued or to be issued

1,500,000

Ordinary

• $\overline{2}$ Number of ⁺securities issued or to be issued (if known) or maximum number which may be issued
• Principal terms of the 3 *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)

Fully paid ordinary shares

⁺ See chapter 19 for defined terms.

4	Do the + securities rank equally in all respects from the date of allotment with an existing +class of quoted +securities?	Yes
	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 distribution) trust. OГ interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution Оr interest payment
5	Issue price or consideration	Nil
6	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	The issue was a result of directors achieving performance hurdles relating to performance rights. The Performance Rights Plan was approved by shareholders on 30 November 2010.
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	N/A
6b	The date the security holder resolution under rule 7.1A was passed	N/A
6с	Number of + securities issued without security holder approval under rule 7.1	N/A

⁺ See chapter 19 for defined terms.

• $6d$ Number of ⁺securities issued | N/A 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)
• Number of securities issued [ 6f under an exception in rule 7.2
• If securities issued under rule 6g $N/A$ 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
• Dates of entering ⁺securities N/A $\overline{7}$ into uncertificated holdings or despatch of certificates
• 8 Number and ⁺class of all *securities quoted on ASX (including the securities in section 2 if applicable)

Number	+ Class
150,111,201	Fully paid ordinary shares
13,609,882	Options listed, exercise price 35 cents, expiring 31 October 2012

$N/A$

$N/A$

$N/A$

$N/A$

• See chapter 19 for defined terms.

		Number	+ Class
9	Number and + class of all *securities not quoted on ASX (including the securities in section 2 if applicable)	6,252,376	Unlisted options, exercise price 10 cents, Expiry 13 November 2012.
		2,000,000	Unlisted options, exercise price 40 cents, Expiry 27 August 2013. Vest - 27 August 2011.
		8,500,000	Unlisted options, exercise price 50 cents, Expiry 23 December 2015.
10	Dividend policy (in the case of a Unchanged

bividend policy (in the case of a
trust, distribution policy) on the increased capital (interests)

ulaliyeu

Part 2 - Bonus issue or pro rata issue

11	security holder Is approval required?	N/A
12	Is the issue renounceable or non- renounceable?	N/A
13	Ratio in which the + securities will be offered	N/A
14	+ Class of + securities to which the N/A offer relates
$15 \,$	+Record date to determine entitlements	N/A
16	Will holdings different N/A on registers (or subregisters) be aggregated for calculating entitlements?
17	Policy for deciding entitlements in relation to fractions	N/A

⁺ See chapter 19 for defined terms.

18	Names of countries in which the $\lceil$
	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		$recep$ t of
	acceptances or renunciations

• Names of any underwriters 20
• Amount of any underwriting fee | N/A $21$ or commission
• $\bf{22}$ Names of any brokers to the $\lceil$ $N/A$ issue
• Fee or commission payable to $23$ the broker to the issue
• Amount of any handling fee $24$ 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
• If the entity has issued options, $27$ 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 $N/A$ applicable)

$N/A$

$N/A$ $N/A$

$N/A$

$N/A$

$N/A$

$N/A$

$N/A$

$\overline{M}$	Karl Sammari a

⁺ See chapter 19 for defined terms.

Appendix 3B New issue announcement

30	How do 'security holders sell N/A their entitlements in full through a broker?
31	How do + security holders sell N/A of their entitlements part through a broker and accept for the balance?
32	How do + security holders dispose of their entitlements (except by sale through a broker)?	N/A
33	+ Despatch date	N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• Type of securities 34 (tick one)
• $(a)$ $\checkmark$ 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 conve 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 $1 - 1,000$ $1,001 - 5,000$ $5,001 - 10,000$

⁺ See chapter 19 for defined terms.

$10,001 - 100,000$ 100,001 and over

37

A copy of any trust deed for the additional $^{\mathrm{+}}$ securities

Entities that have ticked box 34(b)

38 39	Number of securities for which + quotation is sought Class of + securities for which quotation is sought	N/A N/A
40	Do the + securities rank equally in all respects from the date of allotment 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 interest $_{\text{or}}$ payment	N/A
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)	N/A

⁺ See chapter 19 for defined terms.

Number and ⁺class of al 42 *securities quoted on ASX (including the securities in clause $38)$

Number	+ Class
N/A	N/A

Quotation agreement

• ⁺Quotation of our additional ⁺securities is in ASX's absolute discretion. ASX $\mathbf{1}$ may quote the 'securities on any conditions it decides.
• $\overline{2}$ 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.
• $\bullet$ 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.
• We will indemnify ASX to the fullest extent permitted by law in respect of any $\overline{\mathbf{3}}$ claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• We give ASX the information and documents required by this form. If any $\overline{4}$ 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.

⁺ See chapter 19 for defined terms.

		INCW TOOUL GILLION
Sign here:	(Director/Company secretary)	Date: 2 October 2012

Charles Straw

Print name:

$= 222222222222222222222222222222222222$

⁺ See chapter 19 for defined terms.