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1 Silver Mines Limited ABN: th Floor, 2 Bligh Street, Sydney NSW 2000 P: F: September 2015 ASX ANNOUNCEMENT REPLACEMENT PROSPECTUS FOR SILVER MINES LIMITED Silver Mines Limited (ASX: SVL) (Company) encloses a copy of the replacement 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 (with each new option exercisable for one share in the Company at $0.003) announced by the Company on Tuesday, 1 September 2015 (Replacement Prospectus). The Replacement Prospectus was lodged with the Australian Securities and Investments Commission today. Order of the Board Silver Mines Limited Davide Bosio Vaz Hovanessian DJ Carmichael Fern Street Partners Level 14, 191 St George's Terrace Level 10, 2 Bligh St Perth WA 6000 Sydney NSW 2000 Tel: Tel: 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. 1

2 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. 2

3 PROSPECTUS Silver Mines Limited ACN For a four (4) for one (1) fully underwritten pro rata renounceable rights issue of new fully paid ordinary shares in Silver Mines Limited at an issue price of $0.001 per New Share, to raise approximately $2.8 million, together with one (1) free New Option for every two (2) New Shares subscribed for under the Rights Issue. Each New Option is exercisable for one (1) Share in Silver Mines Limited at an exercise price of $0.003 at any time up to and including 5pm (AEST) on 13 October The Rights Issue closes at 5pm (AEST) on 6 October 2015 (unless extended). Valid applications must be received before that time. The Rights Issue is fully underwritten by DJ Carmichael Pty Limited and Fern Street Partners Pty Ltd. Each Underwriter will underwrite the Rights Issue in their Respective Proportions. THIS DOCUMENT IS A TRANSACTION SPECIFIC PROSPECTUS ISSUED IN ACCORDANCE WITH SECTION 713 OF THE CORPORATIONS ACT. THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION ABOUT THE RIGHTS ISSUE AND SHOULD BE READ IN ITS ENTIRETY, TOGETHER WITH THE ACCOMPANYING PERSONALISED ENTITLEMENT AND ACCEPTANCE FORM. AFTER READING THIS PROSPECTUS YOU SHOULD CONSULT YOUR STOCKBROKER, ACCOUNTANT, FINANCIAL ADVISER, TAXATION ADVISER, OTHER INDEPENDENT PROFESSIONAL ADVISER OR THE SHARE REGISTRY IF YOU HAVE ANY QUESTIONS. THE NEW SHARES AND NEW OPTIONS OFFERED UNDER THIS PROSPECTUS SHOULD BE CONSIDERED HIGHLY SPECULATIVE. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Page 1 of 69

4 Table of Contents A. IMPORTANT NOTICES 4 B. CHAIRMAN S LETTER 10 C. KEY DATES FOR THE RIGHTS ISSUE INVESTMENT OVERVIEW COMPANY OVERVIEW Background to the Company The Company's strategy Conrad Silver Project Exploration License Applications near Bowden WRM Binding Heads of Agreement Funding Agreement with Nathan Featherby DETAILS OF THE OFFER Overview of the Offer Renounceability and Rights Trading Rights and liabilities attaching to New Shares and terms of New Options Underwriting and sub-underwriting arrangements Ineligible Shareholders Overview of the Placement and Ochre Placement Interaction of the Rights Issue, Placement and Ochre Placement PURPOSE AND EFFECT OF THE RIGHTS ISSUE Use of Funds Historical and pro forma financial position Effect on capital structure Dilutionary impact Effect on control RISK FACTORS Introduction Specific Risks General Risks Additional risks associated with the Options HOW TO APPLY What Eligible Shareholders may do How to participate Payment methods Issue and quotation ADDITIONAL INFORMATION Currency of information Rights and liabilities attaching to New Shares Rights and liabilities attaching to New Options and Placement Options Trading of Rights and New Shares and New Options Rounding of Rights Ineligible Shareholders Summary of Underwriting Agreements Directors Interests Interests of experts and advisers Expenses of the Offer Transaction Specific Prospectus and information excluded from continuous disclosure Consents Not investment advice or financial product advice Taxation 63 Page 2 of 69

5 7.15 No cooling-off rights Governing Law References to 'you' and 'your Right' Disclaimer of representations Withdrawal of Rights Issue ASIC declarations and Listing Rule waivers Privacy Disclosure DIRECTORS AUTHORISATION interpretation AND GLOSSARY Glossary 65 CORPORATE DIRECTORY 69 Page 3 of 69

6 A. IMPORTANT NOTICES NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES This Prospectus relates to the four (4) for one (1) fully underwritten pro rata renounceable rights issue of new fully paid ordinary shares (New Shares) in Silver Mines Limited (SV SVL or the Company) at an issue price of $0.001 per New Share, together with one (1) free New Option (New Option) for every two (2) New Shares subscribed for under the Rights Issue to raise approximately $2.8 million. Each New Option is exercisable for one (1) Share in the Company at an exercise price of $0.003 per New Option at any time up to and including 5pm (AEST) on 13 October Lodgement and quotation This Prospectus is dated 9 September 2015 (Lodgement Date) and was lodged with ASIC on that date. This is a replacement prospectus which replaces the prospectus dated 1 September 2015 which the Company lodged with ASIC on that date (Original Prospectus). The reason for this replacement prospectus is to clarify by way of further disclosure the impact on control of the Company as a result of the underwriting and sub-underwriting arrangements see section 4.5. This Prospectus is a transaction specific prospectus issued by the Company and has been prepared in accordance with section 713(1) of the Corporations Act and as such it should be read in conjunction with the Company's other periodic and continuous disclosure announcements given to ASX which are available at A copy of this Prospectus has been lodged with ASIC and ASX. Neither ASIC nor ASX, nor any of their respective officers, take any responsibility for the contents of this Prospectus or the merits of the investment to which the Prospectus relates. The Company has applied to ASX for quotation of the New Shares and New Options on ASX. This Prospectus expires on the date which is 13 months after the Lodgement Date, being 9 October 2016 (the Expiry Date), and no New Shares or New Options will be issued on the basis of this Prospectus after the Expiry Date. The Prospectus does not contain the same level of disclosure as a prospectus for an initial public offering. In making representations in this Prospectus, regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act (and is subject to the continuous disclosure regime under the Listing Rules) and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult. Defined terms A number of defined terms are used in this Prospectus. Unless defined in the body of this Prospectus, these terms are defined in section 9.1 of this Prospectus. Unless otherwise stated or implied, references to times in this Prospectus are to AEST. Note to Applicants The information contained in this Prospectus is not financial product advice and does not take into account the investment objectives, financial situation or particular needs of any prospective investor. It is important that you read this Prospectus carefully and in full before deciding whether to invest in the Company. In considering the prospects of the Company, you should consider the risks that could affect the financial performance or position of the Company. You should carefully consider these risks in the light of your investment objectives, financial situation and particular needs (including financial and taxation issues) and seek professional advice from your accountant, financial adviser, stockbroker, lawyer or other professional adviser before deciding whether to invest. Page 4 of 69

7 Risk factors Shareholders should note that there are a number of risks attached to their investment in the Company. Please refer to section 5 of this Prospectus for further information on those risks. These risks, together with other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of the New Shares and New Options in the future. Accordingly, an investment in the Company should be considered highly speculative. No representations other than in this Prospectus No person is authorised to give any information or make any representation in connection with the Rights Issue which is not contained in this Prospectus. You should rely only on information contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company or the directors of the Company (Directors Directors). Obtaining a copy of this Prospectus Eligible Shareholders will be mailed a copy of this Prospectus, together with an accompanying personalised Entitlement and Acceptance Form. Eligible Shareholders in Australia and New Zealand can obtain a copy of this Prospectus on the ASX website (ticker: SVL), from the Company's website at during the Rights Issue period (as defined below) or can obtain a paper copy of this Prospectus by calling the Share Registry on (02) (from within Australia) or (from outside of Australia) from 9.00am to 5.00pm (AEST), Monday to Friday during the Rights Issue period. Persons who access the electronic version of this Prospectus should ensure that they download and read the entire Prospectus. The electronic version of this Prospectus on the Company or ASX websites will not include a personalised Entitlement and Acceptance Form. Entitlement and Acceptance Forms will not be made available electronically. New Shares and New Options under the Rights Issue may only be issued on receipt of a completed Entitlement and Acceptance Form issued together with this Prospectus, or by paying by BPAY, as applicable (see section 6 of this Prospectus for further information). The Corporations Act prohibits any person from passing on an Entitlement and Acceptance Form to another person unless it is attached to a hard copy of this complete Prospectus or the complete and unaltered electronic version of this Prospectus. Shareholders in other jurisdictions (including the United States), or who are, or are acting for the account or benefit of, a person in the United States are not entitled to access the electronic version of this Prospectus. Maps and diagrams Any charts, graphs and tables contained in this Prospectus are illustrative only and may not be drawn to scale. Unless stated otherwise, all data contained in maps, diagrams, charts, graphs and tables is based on information available as at the date of this Prospectus. Rounding A number of figures, amounts, percentages, prices, estimates, calculations of value and fractions in this Prospectus are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figures set out in this Prospectus. Statements of past performance Past performance and pro forma financial information included in this Prospectus is given for illustrative purposes only and should not be relied upon as (and is not) an indication of the Company's Page 5 of 69

8 views on its future financial performance or condition. Investors should note that past performance, including past Share price performance of the Company cannot be relied upon as an indicator of (and provides no guidance as to) the Company's future performance including future Share price performance. The historical information included in this Prospectus is, or is based on, information that has previously been released to the market. Financial information and forward looking statements Section 4 sets out the financial information referred to in the Prospectus. All dollar values are in Australian dollars ($ or A$), rounded to the nearest dollar. Any discrepancies between totals and sums of components in tables contained in this Prospectus are due to rounding. This Prospectus contains forward looking statements which are identified by words such as "may", "could", "believes", "estimates", "expects", "intends" and other similar words that involve risks and uncertainties. Any forward looking statements are subject to various risk factors that could cause the Company's actual results to differ materially from the results expressed or anticipated in these statements. Accordingly, such forward looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, the Directors and management. The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward looking statements contained in this Prospectus will actually occur and prospective investors are cautioned against placing undue reliance on these forward looking statements. Forward looking statements should be read in conjunction with, and are qualified by reference to, risk factors as set out in section 5 of this Prospectus as well as the other information in this Prospectus. The Company has no intention to update or revise forward looking statements, regardless of whether new information, future events or any other factors affect the information contained in this Prospectus, except where required by law. Company website Any references to documents included on the Company's website are provided for convenience only and none of the documents or other information available on the Company's website are incorporated by reference in this Prospectus. Disclaimer Neither the Company nor any other person warrants or guarantees the future performance of the Company, or any return on any investment made pursuant to this Prospectus. It is expected that the New Shares and the New Options will be quoted on ASX. The Company, the Underwriters and the Share Registry disclaim all liability, whether in negligence or otherwise, to persons who trade New Shares or New Options before receiving their holding statements. Selling restrictions This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. No action has been taken to register or qualify the New Shares, the New Options or the Rights Issue, or to otherwise permit a public offering of New Shares and New Options, in any jurisdiction outside Australia and New Zealand. The distribution of this Prospectus outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus outside Australia or New Zealand should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. Page 6 of 69

9 In particular, the New Shares and New Options have not been, and will not be, registered under the U.S. Securities Act or the securities laws of any state of the United States and may not be offered or sold in the United States unless the New Shares and New Options are registered under the U.S. Securities Act, or offered or sold in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Important information for New Zealand investors This Offer to New Zealand investors is a regulated offer made under Australian and New Zealand law. In Australia, this is Chapter 6D of the Corporations Act and regulations made under that Act. In New Zealand, this is subpart 6 of Part 9 of the Financial Markets Conduct Act 2013 and Part 9 of the Financial Markets Conduct Regulations This Offer and the content of the offer document are principally governed by Australian rather than New Zealand law. In the main, the Corporations Act and the regulations made under that Act set out how the offer must be made. There are differences in how financial products are regulated under Australian law. For example, the disclosure of fees for managed investment schemes is different under the Australian regime. The rights, remedies, and compensation arrangements available to New Zealand investors in Australian financial products may differ from the rights, remedies, and compensation arrangements for New Zealand financial products. Both the Australian and New Zealand financial markets regulators have enforcement responsibilities in relation to this offer. If you need to make a complaint about this offer, please contact the Financial Markets Authority, New Zealand ( The Australian and New Zealand regulators will work together to settle your complaint. The taxation treatment of Australian financial products is not the same as for New Zealand financial products. The Offer may involve a currency exchange risk. The currency for the financial products is not New Zealand dollars. The value of the financial products will go up or down according to changes in the exchange rate between that currency and New Zealand dollars. These changes may be significant. If you expect the financial products to pay any amounts in a currency that is not New Zealand dollars, you may incur significant fees in having the funds credited to a bank account in New Zealand in New Zealand dollars. If the financial products are able to be traded on a financial product market and you wish to trade the financial products through that market, you will have to make arrangements for a participant in that market to sell the financial products on your behalf. If the financial product market does not operate in New Zealand, the way in which the market operates, the regulation of participants in that market, and the information available to you about the financial products and trading may differ from financial product markets that operate in New Zealand. If you are uncertain about whether this investment is appropriate for you, you should seek the advice of an appropriately qualified financial adviser. Currency Unless otherwise stated, the currency referred to in this Prospectus is Australian dollars. Privacy By filling out the personalised Entitlement and Acceptance Form to apply for New Shares (and New Options), you are providing personal information to the Company through the Company s securities Page 7 of 69

10 Share Registry. The Company, and the Share Registry on its behalf, may collect, hold and use that personal information in order to process your application, service your needs as an investor, provide facilities and services that you request and carry out appropriate administration. If you do not provide the information requested in the personalised Entitlement and Acceptance Form, the Company and the Share Registry may not be able to process or accept your application. Your personal information may also be provided to the Company s members, agents and service providers on the basis that they deal with such information in accordance with the Company s privacy policy. The members, agents and service providers of the Company may be located outside Australia where your personal information may not receive the same level of protection as that afforded under Australian law. The types of agents and service providers that may be provided with your personal information and the circumstances in which your personal information may be shared are: the Share Registry for ongoing administration of the register of members; printers and other companies for the purpose of preparation and distribution of statements and for handling mail; market research companies for the purpose of analysing the Shareholder base and for product development and planning; and legal and accounting firms, auditors, contractors, consultants and other advisers for the purpose of administering, and advising on, the Company's issued securities and for associated actions. The information contained in the Company s register of members must remain there even if that person ceases to be a Shareholder. Information contained in the Company s register of members is also used to facilitate dividend payments and corporate communications (including the Company s financial results, annual reports and other information that the Company may wish to communicate to its shareholders) and compliance by the Company with legal and regulatory requirements. An Applicant has a right to gain access to the information that the Company and the Share Registry hold about that person, subject to certain exemptions under law. A fee may be charged for access. Access requests must be made in writing or by telephone call to the Company s registered office or the Share Registry s office, details of which are disclosed in the corporate directory set out on the last page of this Prospectus. Enquiries Before making a decision about investing in the Rights Issue, you should seek advice from your stockbroker, accountant, financial adviser, taxation adviser or other independent professional adviser to determine whether it meets your objectives, financial situation and needs. If you have any questions on how to: complete the personalised Entitlement and Acceptance Form accompanying this Prospectus which Eligible Shareholders may use to apply for New Shares and New Options; or take up the New Shares and New Options offered to you under the Rights Issue, either in full or in part; or sell all or part of your Right on the ASX or directly to a third party, please call the Share Registry between 9:00am and 5:00pm (AEST) Monday to Friday during the period from and including the date on which the Rights Issue opens until and including the date on which it closes: Within Australia: (02) Outside Australia: Page 8 of 69

11 If you have lost your Entitlement and Acceptance Form and would like a replacement form, please call the applicable number above. Website To view annual reports, shareholder information and company information about the Company's Group, announcements, background information on the Company's operations and historical information, visit the Company's website at Page 9 of 69

12 B. CHAIRMAN S LETTER 9 September 2015 Dear Shareholder, On behalf of the Board of Directors, it is my pleasure to invite you, as a valued Shareholder of Silver Mines Limited ACN (SVL or the Company), to participate in a 4-for-1 fully underwritten renounceable pro rata rights issue to subscribe for new fully paid ordinary shares at an issue price of $0.001 per New Share with attaching free options offered on the basis of 1 New Option for every 2 New Shares subscribed for. Each New Option will be exercisable for 1 Share at $0.003 and will expire on 13 October The Company will also apply to the ASX for these New Shares and New Options to be quoted. Before the date of the issue of securities under the Rights Issue, the Company also proposes to seek shareholder approval for a placement of approximately 947,000,000 Shares and approximately 428,500,000 options which will include the issue of shares and options to related parties. The subscription monies for the placement shares will be offset against outstanding directors' fees owing to directors of the Company and loans owed by the Company to various parties and is thereby intended to reduce the liabilities of the Company. Please refer to section 3.6 for further information. The Company will also issue 225,000,000 shares to Ochre Group Holdings Limited for the consultancy services in relation to the Conrad Silvers Project. These shares will only be issued once the acquisition of the Conrad Silver Project is complete and the subscription monies payable upon exercise will be offset against the consultancy fee. The Company is also seeking shareholder approval in relation to the issue of these shares. Please refer to section 3.6 for further information. The Company has been active in managing its wholly owned Webbs silver project as well as evaluating and pursuing other opportunities in the silver sector. To this end, the Board was very pleased to be in a position to announce the transaction recently entered into with Malachite Resources Limited, whereby the Company has exercised its option to purchase the Conrad Silver Project. This transaction was announced to ASX on 11 May On or about 31 August 2015, the Company entered into a binding Heads of Agreement to update the payment terms of the acquisition. Please refer to section 2.3 for further information. On 22 July 2015, the Company also entered into a binding Heads of Agreement whereby the Company agreed to provide funding to White Rock Minerals Limited with a view to work towards a possible merger, acquisition or other combination of the parties' businesses. On 30 August 2015, the Company and White Rock Minerals Limited updated funding terms of the arrangement. Please refer to section 2.5 for further information. Additionally, the Company recently applied for Exploration Licenses surrounding the large-scale Bowden silver project. The Company is of the opinion that significant potential for further silver mineralisation exists surrounding Bowden and looks forward to advancing its tenement holding in the area when and if the Exploration Licenses are granted. Future direction While the market for junior exploration companies remains exceedingly tough, the Company is confident in its ability to execute a strategy to accumulate significant silver assets on very attractive pricing structures. The price of silver is currently trading near multi-year lows, however the Board remains of the opinion that there are sufficient factors to provide encouragement that the price of silver will recover in the years to come. Page 10 of 69

13 In the light of this belief, the Company remains firmly committed to its strategy of acquiring silver projects and moving them towards development in anticipation of higher silver prices. The Board believes that successful execution of this strategy will leave SVL in a unique position as one of only a handful of 'pure-play' silver companies on ASX. It is proposed that the net proceeds raised under the Rights Issue will be used to execute the abovementioned strategy, settle the purchase of the Conrad Silver Project, make an investment in White Rock Minerals Limited, pursue further silver opportunities, reduce debt, pay creditors, meet the expenses of this Rights Issue, and provide working capital. The Rights Issue is fully underwritten by DJ Carmichael Pty Limited and Fern Street Partners Pty Ltd on the terms and conditions of the respective Underwriting Agreements with each party. Each Underwriter will underwrite their Respective Proportions. DJ Carmichael Pty Limited is underwriting to a maximum of $2,050,000 and Fern Street Partners Pty Ltd is underwriting to a maximum of $721,771. I encourage you to read this Prospectus carefully before deciding whether to participate in the Rights Issue. The Rights Issue will substantially reduce a Shareholder's interest in the Company if they do not take up their Right under the Rights Issue. As the Rights Issue is renounceable, Shareholders may be able to sell their Right to the extent they choose not to take them up. Only Eligible Shareholders are entitled to participate in the Rights Issue. Furthermore, and to satisfy applicable Listing Rule requirements, the Company expects to appoint a nominee and will issue that nominee with the rights to subscribe for New Shares and New Options that would otherwise have been available for subscription by Ineligible Shareholders. The nominee will arrange for the sale of those rights to certain institutional investors before the Closing Date and will work with the Company to distribute any Premium (net of expenses and withholdings required by law) proportionately to Ineligible Shareholders. If you are an Eligible Shareholder and wish to take up all or part of your Right, please: (a) (b) use the BPAY facility as outlined in the accompanying Entitlement and Acceptance Form; or forward the completed Entitlement and Acceptance Form, together with your cheque or bank draft for the amount shown on your Entitlement and Acceptance Form in the reply paid envelope to reach the Company s Share Registry, so that it is received by no later than 5pm AEST on the Closing Date, 6 October, 2015, or such later date as the Directors determine. Refer to section 6 for further information. Shareholders should also consider the specific risks and general factors relating to the investment set out in section 5. Accompanying this Prospectus is a personalised Entitlement and Acceptance Form which contains details of your Right. If you are an Eligible Shareholder and wish to accept your Right under this Rights Issue, you must complete the attached personalised Entitlement and Acceptance Form and return it together with the requisite application monies to the Company s Share Registry before 5pm (AEST) on the Closing Date of 6 October, Further information on the Rights Issue and the Company's business is detailed in this Prospectus. If there is any matter on which you require further information, you should consult your stockbroker, solicitor, accountant, and/or other professional advisor as you see fit. Page 11 of 69

14 We also encourage you to contact Vaz Hovanessian, Company Secretary on for further information. On behalf of the directors of the Company, I encourage you to consider this investment opportunity and thank you for your ongoing support of Silver Mines Limited. Yours Faithfully David Sutton Executive Chairman Page 12 of 69

15 C. KEY DATES FOR THE RIGHTS ISSUE C.1 Timetable of Important Dates Event Announcement of Rights Issue and lodgement of the Original Prospectus with ASX and ASIC Proposed Date Tuesday, 1 September 2015 Lodgement of this 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 opens Thursday, 10 September 2015 Rights trading on ASX ends 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, Tuesday, 6 October 2015 Issue Date for New Shares and New Options issued under the Rights Issue (deferred settlement trading ends) Normal trading of New Shares and New Options issued under the Rights Issue expected to commence on ASX Expected date of dispatch of holding statements for New Shares and New Options Tuesday, 13 October 2015 Wednesday, 14 October 2015 Thursday, 15 October 2015 Expiry date for New Options 5pm, 13 October 2017 Dates and times in this Prospectus are indicative only and subject to change. All times and dates refer to AEST unless otherwise stated. *The Company reserves the right, subject to the Corporations Act, Listing Rules and other applicable laws, to vary the dates of the Rights Issue without prior notice, including extending the Rights Issue or accepting late applications, either generally or in particular cases, or to withdraw the Rights Issue without prior notice. Applicants are encouraged to submit their personalised Entitlement and Acceptance Form as soon as possible. No cooling-off rights apply to applications submitted under the Rights Issue. The commencement of quotation of New Shares and New Options is subject to confirmation from ASX. Page 13 of 69

16 1. INVESTMENT OVERVIEW Topic Summary For more information The Company and its business model Who is the issuer of the New Shares and New Options? What is the Company's business? What is the Company's strategy? What is the proposed investment in Conrad Silver Project? What is the proposed investment in White Rock Minerals Limited? Silver Mines Limited ACN Managing the Webbs silver project as well as evaluating and pursuing other opportunities in the silver sector. Acquiring silver projects and moving them towards development in anticipation of potentially higher silver prices. The Company entered into a Memorandum of Understanding (MOU MOU) which detailed the terms of the acquisition of the Conrad Silver Project. Under the MOU, the Company exercised its option to acquire the Conrad Silver Project near Inverell, New South Wales from Malachite Resources Ltd. On or about 31 August 2015, the Company also entered into a binding Heads of Agreement amending the payment terms of the acquisition of the Conrad Silver Project. As at the date of this Prospectus, the Company has made payments totaling $50,000 towards the acquisition of the Conrad Silver Project. WRM is the 100% owner of the Mount Carrington silver project located 150km north of the Company s Mount Webbs silver project. The Company and WRM signed a binding Heads of Agreement and Subscription Agreement on 22 July 2015 in relation to a possible merger, acquisition or other combination of the businesses, assets or entities of the parties. Under the terms of the above agreements, the Company agreed to provide WRM funding by way of two share placements in WRM and a loan facility. On 30 August 2015, the Company entered into a Chairman's letter Section 2 Company Overview Section 2 Company Overview Section 2 Company Overview Section 2 Company Overview Page 14 of 69

17 deed of variation with WRM amending subscription amounts and dates for the placements. The Company and WRM are currently under an exclusivity agreement period of six months whereby the parties are working towards a potential transaction. What is the Loan Agreement with Nathan Featherby? Is the Rights Issue subject to Shareholder approval? On or about 30 August 2015, the Company entered into a loan agreement with Nathan Featherby, a director of the Company, whereby Nathan Featherby (or an entity associated by him) agreed to provide a loan facility funding up to $500,000 to meet payment commitments under the WRM and MAR arrangements. No. The Rights Issue is not subject to Shareholder approval. However, Shareholder approval under Listing Rule is required in connection with the Placement and the Ochre Placement. Completion of the Rights Issue is not dependent on Shareholder approval being obtained in relation to the Placement and Ochre Placement. Section 2 Company Overview Section 3.6 Details of Placement and Ochre Placement The Rights Issue and the New Shares and New Options What is the Rights Issue? The Rights Issue is a four (4) for one (1) fully underwritten pro rata renounceable rights issue of new fully paid ordinary shares in the Company at an issue price of $0.001 per New Share, to raise approximately $2.8 million, together with one (1) free New Option for every two (2) New Shares subscribed for under the Rights Issue. Each New Option is exercisable for one (1) Share in the Company at an exercise price of $0.003 at any time up to and including 13 October What is the Placement? The Placement is the issue of approximately 947,000,000 shares and approximately 428,500,000 options in the Company, some of which are related parties of the Company. The Placement is subject to Shareholder approval being obtained at a general meeting of Shareholders. If approved, these Placement Shares will be issued before the Closing Date. Section 3 Details of the Offer Section 3.6 Details of Placement and Ochre Placement What is the Ochre The Ochre Placement is the issue of 225,000,000 Section 3.6 Details of Page 15 of 69

18 Placement? shares to Ochre Group Holdings Limited. The Ochre Placement is subject to Shareholder approval being obtained at a general meeting of Shareholders. If approved, the Ochre Placement shares will be issued before the Closing Date. Placement and Ochre Placement How does the Issue Price compare with the recent market price for Shares? The Company's Shares went into trading halt on 5 August 2015 and then were voluntarily suspended from quotation on 7 August 2015 pending finalisation of the underwriting arrangements and the capital raising. How much will the Company raise under the Rights Issue? How much will the Company raise under the Placement, if approved by Shareholders? How much will the Company raise under the Ochre Placement, if approved by Shareholders? What will the proceeds of the Rights Issue be used for? The Shares last traded for $0.006 on 4 August In the calendar year 2015, the highest price that the Shares have traded was $0.008 (15 July 2015) and the lowest price that the Shares have traded was $0.001 (29 June 2015). Approximately $2.8 million before expenses of the Rights Issue. Nil. If shareholder approval is obtained, the subscription monies for the Placement of shares will be offset against outstanding director fees and amounts owing to other creditors and for repayment of loans. Where options are also issued as part of the Placement, these may raise additional subscription proceeds in the future, if exercised. Nil. The issue of these shares is subject to shareholder approval and if approved will be at a price of $0.001 per share. The subscription monies will be offset against a fee of $225,000 owing to Ochre Group Holdings Limited for consultancy fees in relation to the Conrad Silver Project. These shares will only be issued once the acquisition of the Conrad Silver Project is complete. The Company is seeking to raise approximately $2.8 million from the Rights Issue, before costs of the Rights Issue. The Company intends to use the net proceeds raised under the Rights Issue to fund completion of the acquisition of the Conrad Silver Project, to Section 4 Purpose and effect of the Rights Issue Section 3.6 Details of Placement and Ochre Placement Section 3.6 Details of Placement and Ochre Placement Section 4 Purpose and effect of the Rights Issue Page 16 of 69

19 make an investment in WRM, to continue evaluation of additional acquisition targets, to meet requisite minimum expenditure on both the Webbs Silver Project and the Conrad Silver Project, to reduce debt, pay creditors and to provide working capital. Am I an Eligible Shareholder? What is my Right? What can I do with my Right? Can I apply for New Shares and New Options in excess of my Right? Can I trade my Right? However, new circumstances may arise with the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds raised under the Rights Issue are applied on this basis. An Eligible Shareholder are those Shareholders who satisfy each of the following criteria: (a) are registered as a holder of Shares as at 5pm AEST on the Record Date; and (b) have an address on the Company's share register in Australia or New Zealand; and (c) are not located in the United States and are not US Persons and not acting for the account of or benefit of US Persons; and (d) do not hold Shares as a result of post Record Date transactions. Eligible Shareholder are entitled to: (a) four (4) New Shares for every one (1) Share held on the Record Date at an Issue Price of $0.001 per New Share; and (b) one (1) New Option for every two (2) New Shares subscribed for under the Prospectus for no additional consideration with an exercise price of $0.003 and an expiry date of 13 October, You can accept all or part, transfer or not accept your Right. No. Eligible Shareholders who have subscribed for their Right cannot apply for additional New Shares and New Options in excess of their Right. The Rights Issue is renounceable. Therefore, should you choose not to accept all or part of your Right, your Right may be traded on the ASX or otherwise sold during the Rights Trading Period to a third party off-market who need not be an Section 3.1 Details of the Offer Section 3 Details of the Offer Section 3 Details of the Offer Section 3 Details of the Offer Section 3 Details of the Offer Page 17 of 69

20 How do I accept my Right? existing Shareholder. There is no guarantee that you will be able to sell any or all of your Right or that any particular price will be paid for the Right. See section 6 How to apply? Section 6 How to apply? Is the Rights Issue underwritten? The Rights Issue is fully underwritten by DJ Carmichael Pty Limited and Fern Street Partners Pty Ltd on the terms and conditions of the respective Underwriting Agreements with each party. Each Underwriter will underwrite in their Respective Proportions. DJ Carmichael Pty Limited is underwriting to a maximum of $2,050,000 and Fern Street Partners Pty Ltd is underwriting to a maximum of $721,771. Section 3 Details of the Offer What are the key terms of the New Shares and New Options? See section 7 Additional information. See section 7 Additional information What is the effect of the Rights Issue on the Company? Summary of risks See section 4 Purpose and effect of the Rights Issue. See section 4 Purpose and effect of the Rights Issue What are the key risks associated with New Shares and New Options and the Company? See section 5 Risk Factors. See section 5 Risk Factors Miscellaneous What are the significant interests and benefits payable to Directors and other persons connected with the Company and the Rights Issue? Fern Street Partners Pty Ltd (a company controlled by the Company's company secretary, Vaz Hovanessian) is underwriting the Rights Issue up to a maximum of $721,771. See section 4.5 Effect on Control Page 18 of 69

21 2. COMPANY OVERVIEW 2.1 Background to the Company The Company is the holder of the Webbs Silver Project in the New England region of New South Wales, Australia. Details on the project can be found on the Company s website ( 2.2 The Company's strategy The Company s strategy is to pursue the acquisition of silver projects with the goal of accumulating existing silver projects and deposits to become a substantial mineral resources company. To this end, the Company is actively evaluating a number of further opportunities. We have set out further information regarding our recent acquisitions below. 2.3 Conrad Silver Project On 11 May 2015, the Company announced to ASX that it had entered into a Memorandum of Understanding with MAR to purchase the Conrad Silvers Project which is located near Inverell, New South Wales. On 17 June 2015, the Company further announced in ASX announcement 'Malachite Proceeding with Sale of Conrad Silver Project' (CSP Announcement) that it had exercised its option under the Memorandum of Understanding to acquire the Conrad Silver Project from MAR. Following this, the Company made three payments in August totaling $50,000 towards the first payment of the acquisition of the Conrad Silvers Project. On or about 31 August2015, the Company entered into a binding Heads of Agreement to update the terms of the acquisition set out in the CSP Announcement. The revised terms of the acquisition are as follows: (a) (b) (c) (d) (e) The Company must pay $75,000 to MAR on or before 18 September 2015 (Second Payment). On the earlier of 30 October 2015 and the date the Company issues shares under the Rights Issue (Completion Date), the Company will: (i) (ii) pay $275,000 to MAR (Completion Payment); and issue the shares in the Company to MAR (subject to any regulatory approvals) which total the value of $125,000. The number and value of the Company shares will be calculated on the lower of the 5 day volume weighted Company share price prior to the Completion Date or $ MAR will transfer all of its right, title and interest in the Conrad Silver Project, free from any encumbrances to the Company. MAR will retain an ongoing interest in the Conrad Silver Project by receiving a one per cent net smelter return on all metals produced from the Conrad Silver Project. The Company will also retain any security bonds over relating to the Conrad Silver Project. Page 19 of 69

22 2.4 Exploration License Applications near Bowden On 3 June 2015, the Company announced to the market it had lodged two Exploration License Applications (ELAs ELAs) covering over 650 square kilometers surrounding and along strike from the 182moz AgEq Bowden's Silver Deposit (JORC 2012 ASX: KCN announcement 18 Oct 2013), situated approximately 240km west of Sydney and on the north-eastern margin of the Lachlan Fold Belt. These applications are pending approval from the NSW Department of Industry, Resources and Energy. The ELAs encompass favourable and highly prospective geology and contain a significant number of metalliferous occurrences, which remain underexplored for Bowdens-style low sulphidation, lowgrade bulk tonnage silver rich epithermal deposits. 2.5 WRM Binding Heads of Agreement WRM is the 100% owner of the Mt Carrington silver project located in 150 km north of the Company's Mt Webb silver project. Both projects are located the in the New England Fold Belt of New South Wales. On 22 July 2015, the Company and WRM signed a legally binding Heads of Agreement and a Subscription Agreement whereby the Company agreed to provide WRM funding by way of two share placements in WRM and a loan facility. The funding is to be provided with the view that the parties will continue to work towards a possible merger, acquisition or other combination of parties businesses and assets. The terms of the funding arrangement were set out in ASX Announcement 'White Rock Minerals and Silver Mines sign Heads of Agreement' dated 23 July 2015 (WSP Announcement). On or about 30 August 2015, the Company and WRM entered into a Deed of Variation to vary the terms of the funding arrangement set out in the Subscription Agreement. The revised terms of funding are as follows: Share Placements WRM has agreed to: (a) (b) Loan Facility issue 6,250,000 placement shares in consideration of $125,000 from the Company, to be completed by 18 September 2015; and issue 3,750,000 placement shares in consideration of $75,000 from the Company, to be completed on 6 October 2015 (Tranche 2 Placement). The Company has agreed to make a loan facility available to WRM for additional funding up to $300,000. The terms of the loan facility are as follows: (a) the loan is unsecured and carries a nil interest rate; (b) the loan can be accessed no sooner than 45 days following completion of the Tranche 2 Placement; and (c) WRM will have the option to convert any loan amounts drawn down into WRM shares during 12 months following the first draw down. The price of conversion will be 80% of the 5 day volume weighted average price of WRM shares, subject to any regulatory approvals. Page 20 of 69

23 2.6 Funding Agreement with Nathan Featherby On or about 30 August 2015, the Company entered into a loan agreement with Nathan Featherby, a director of the Company whereby Nathan Featherby (or an entity associated by him) agreed to provide a loan facility funding up to $500,000 to meet payment commitments under WRM Heads of Agreement and MAR Heads of Agreement. Funds will be provided by way of an unsecured loan to the Company bearing interest at the rate of 8% per annum and payable at the end of the loan term. The term of the loan facility is 3 months from the date funds are advanced to the Company. The Company has agreed to repay any loan amounts advanced under the facility on receipt of proceeds from the Rights Issue. Page 21 of 69

24 3. DETAILS OF THE OFFER 3.1 Overview of the Offer All Eligible Shareholders are entitled to participate in the Rights Issue. Eligible Shareholders are those Shareholders who satisfy each of the following criteria: (a) (b) (c) (d) are registered as a holder of Shares as at 5pm AEST on the Record Date; and have an address on the Company's share register in Australia or New Zealand; and are not located in the United States and are not US Persons and not acting for the account of or benefit of US Persons; and do not hold Shares as a result of post Record Date transactions. For more information on eligibility of Shareholders, see section 3.5 of this Prospectus. The Record Date is 5pm AEST, Monday, 7 September If you are an Eligible Shareholder, you are entitled to subscribe for four (4) New Shares for every one (1) Share held on the Record Date at an Issue Price of $0.001 per New Share. You will also receive one (1) New Option for every two (2) New Shares subscribed for under the Rights Issue for no additional consideration. Each New Option is exercisable for one (1) Share with an exercise price of $0.003 per New Option and an expiry date of 13 October When calculating your Right, fractional rights will be rounded up to the nearest whole number. The Company s Share Registry must receive your Entitlement and Acceptance Form by the Closing Date (being 5pm AEST, Tuesday, 6 October 2015). 3.2 Renounceability and Rights Trading The Rights Issue is renounceable. This means that, should you choose not to accept all or part of your Right, your right to subscribe for New Shares and New Options under the Rights Issue may be traded on ASX or otherwise sold during the Rights Trading Period to a third party off-market who need not be an existing Shareholder. Trading of Rights is expected to commence on ASX at 10am AEST on Thursday, 3 September 2015 and will cease at 4pm AEST on Monday, 28 September Any Rights not taken up by Shareholders (or an eligible assignee of their Rights) will form part of the Shortfall and be dealt with in accordance with section 3.4. There is no guarantee that you will be able to sell any or all of your Right or that any particular price will be paid for the Right. A summary of what Eligible Shareholders may do is set out in section Rights and liabilities attaching to New Shares and terms of New Options A summary of the rights and liabilities attaching to the New Shares and the terms of the New Options are set out in sections 7.2 and 7.3 of this Prospectus. Page 22 of 69

25 3.4 Underwriting and sub-underwriting underwriting arrangements The Rights Issue is fully underwritten by DJ Carmichael Pty Limited and Fern Street Partners Pty Ltd on the terms and subject to the conditions of the Underwriting Agreements. This means that any Shortfall Securities will be taken up by the Underwriters. DJ Carmichael Pty Limited is underwriting to a maximum of $2,050,000 and Fern Street Partners Pty Ltd is underwriting to a maximum of $721,771. The terms of the Underwriting Agreements are summarised in section 7.7 of this Prospectus. The Underwriters have confirmed with the Company that the underwriting arrangements are fully sub-underwritten. DJ Carmicheal Pty Limited has entered into sub-underwriting arrangements with its clients and other brokers in relation to the whole of its Respective Proportion. The sub-underwriters of Fern Street Partners Pty Ltd are David Sutton (through his associated company, Dayton Way Financial Pty Limited ACN ) and clients of Fern Street Partners Pty Limited. Of the sub-underwritten amount for Fern Street Partners Pty Ltd, the following are related parties of Fern Street Partners Pty Ltd: Related Party David Sutton, a director of the Company (through associated company Dayton Way Financial Pty Limited) Number of New Shares 250,000,000 (at $0.001 per New Share) $250,000 Maximum amount to be sub-underwritten underwritten Total 250,000,000 $250,000 No person will obtain voting power in the Company of 19.9% or more as a result of the subunderwriting arrangements for the Underwriters. 3.5 Ineligible Shareholders The Company is of the view that it is unreasonable to make an offer under the Rights Issue to Shareholders whose registered address is not in Australia or New Zealand or who are otherwise ineligible under applicable securities laws to receive an offer under the Rights Issue (Ineligible Shareholders) having regard to the number of Ineligible Shareholders, the number and value of Shares held by the Ineligible Shareholders and the cost of complying with legal and regulatory requirements in each of those jurisdictions. Accordingly, the Rights Issue is not being extended, and New Shares and New Options will not be issued, to Ineligible Shareholders. Shareholders resident in Australia or New Zealand holding shares on behalf of persons who are resident overseas are responsible for ensuring that taking up a Right under the Rights Issue does not breach regulations in the relevant overseas jurisdiction. Return of a duly completed personalised Entitlement and Acceptance Form will be taken by the Company to constitute a representation that there has been no breach of those regulations. However, and to satisfy applicable Listing Rule requirements, the Company expects to appoint a nominee and will issue that nominee with the rights to subscribe for New Shares that would otherwise have been available for subscription by Ineligible Shareholders. The nominee will arrange Page 23 of 69

26 for the sale of those rights to certain institutional investors to be conducted before the Closing Date, and will work with the Company to distribute any Premium (net of expenses and withholdings required by law) proportionately to Ineligible Shareholders. 3.6 Overview of the Placement and Ochre Placement The Company proposes to issue the Placement Shares and, in each case other than to the Directors, one (1) Placement Option for every two (2) Placement Shares issued. 1 The terms of the Placement Options will be the same as the New Options issued in respect of the Rights Issue, namely that the exercise price will be $0.003 per Placement Option and the expiry date will be 13 October 2017) as set out below. The subscription monies for the Placement Shares at an issue price of $0.001 per Placement Share will be offset against monies owing by the Company for: (a) (b) outstanding fees and remuneration owing to a number of directors of the Company; and outstanding fees and loans owing to various creditors of the Company. On this basis, there will be no cash proceeds raised from the Placement Shares. There may be cash proceeds raised at some future date if the Placement Options are exercised. The notice of meeting seeking Shareholder approval for the Placement Shares and Placement Options will be dispatched shortly, such that Shareholder approval will be obtained before the close of the Rights Issue. If approved by Shareholders, 947,000,000 Placement Shares and 428,500,000 Placement Options will be issued as follows: Placee Placement Shares Placement Options Consideration David Sutton 20,000,000 nil To be credited as payment for outstanding director's fees owed and the balance of any fees will be paid in cash. Douglas Flinn 20,000,000 nil To be credited as payment for outstanding director's fees owed and the balance of any fees will be paid in cash. James Naughton 50,000,000 nil To be credited as payment for outstanding director's fees owed and the balance of any fees will be paid in cash. Chris Lawrence 250,000, ,000,000 To be credited in relation to outstanding fees and loans owed by the Company. Raxigi Pty Limited 2 40,000,000 20,000,000 To be credited to Raxigi Pty Limited, in consideration of outstanding consultancy fees owed by the Company. 1 The Placement Shares and Placement Options, subject to Shareholder approval being obtained, have been offered and will be issued with disclosure under this Prospectus and if approved, the Placement Shares and Placement Options will be issued during the period in which offers of New Shares and New Options under this Prospectus are still open for acceptance. 2 Vaz Hovanessian, the Company's company secretary is the sole director and company secretary of Raxigi Pty Limited. Page 24 of 69

27 Placee Placement Shares Placement Options Consideration Shane Pentony 7,500,000 3,750,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. Caeserina Isabela Favot Bruno Peter Dalsoglio 50,000,000 25,000,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. 55,000,000 27,500,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. Balmoral Dreams Pty Ltd STB Projects Pty Ltd 100,000,000 50,000,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. 9,500,000 4,750,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. Cen Pty Ltd 25,000,000 12,500,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. Evofund 60,000,000 30,000,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. Jathro Pty Ltd <IMON account> 15,000,000 7,500,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. Robert Kent 60,000,000 30,000,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. Alan McChesney 60,000,000 30,000,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. Christian A Burtscher Michael R Burtscher Richard Alexander Riddell 50,000,000 25,000,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. 25,000,000 12,500,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. 20,000,000 10,000,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. Page 25 of 69

28 Placee Placement Shares Placement Options Consideration Jonathan Gurnsey 20,000,000 10,000,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. Bill Greville Superfund Pty Ltd ATF Bill Greville Superfund 10,000,000 5,000,000 To be credited in consideration for outstanding fees and loans owed by the Company to the respective party. Total 947,000, ,500,000 Nil In addition to the above Placement Shares and Placement Options, the Company also proposes to issue shares to Ochre Group Holdings Limited in consideration for the consultancy services provided for the Conrad Silver Project pursuant to agreement between the Company and Ochre Group Holdings Limited dated 26 August If approved by Shareholders, 225,000,000 shares will be issued to Ochre Group Holdings Limited as follows: Placee Ochre Placement Shares Consideration Ochre Group Holdings Limited 4 225,000,000 Upon the issue of Ochre Placement Shares the subscription monies payable by Ochre Group Holdings Limited will be offset against a consultancy fee of $225,000 payable if the Company completes the Conrad Silver Project transaction. These Ochre Placement Shares are subject to the precondition to exercise that the Conrad Silver Project transaction completes. Each Ochre Placement Share will be issued at an issue price of $0.001 and offset against monies owed for consultancy services provided by Ochre Group Holdings Limited to the Company. The money owed will be $225,000 if the Company completes the Conrad Silver Project transaction. The notice of meeting seeking Shareholder approval for the Ochre Placement Shares will be dispatched shortly, such that Shareholder approval will be obtained before the close of the Rights Issue. 3 The Ochre Placement, subject to Shareholder approval being obtained, has been offered and will be issued with disclosure under this Prospectus and if approved, the Ochre Placement will be issued during the period in which offers of New Shares and New Options under this Prospectus are still open for acceptance. 4 Nathan Featherby (a director of the Company, is also a director of Ochre Group Holdings Limited and is a substantial shareholder of Ochre Group Holdings Limited, having a Relevant Interest in approximately 22.26% of the shares in Ochre Group Holdings Limited as at the date of this Prospectus. Vaz Hovanessian, the Company's company secretary, is also the company secretary of Ochre Group Holdings Limited. Page 26 of 69

29 3.7 Interaction of the Rights Issue, Placement and Ochre Placement The Placement is proposed to reduce liabilities of the Company for fees, amounts owing to creditors and repayment of loans that have been made by the Company to resolve historical funding to the Company. On this basis, the issue of Placement Shares will not result in any cash proceeds received by the Company. There may be cash proceeds raised at some future date if the Placement Options are exercised. The Placement Shares will be issued at the same Issue Price as the New Shares under the Rights Issue. The Placement Options are also to be issued on the same terms as the New Options issued under the Rights Issue. The Ochre Placement Shares will be issued at the same Issue Price as the New Shares under the Rights Issue, except there will be no attaching free New Options. The Placement Shares, Placement Options and Ochre Placement Shares will be issued after the Record Date and accordingly, will not carry a right to participate in the Rights Issue. Page 27 of 69

30 4. PURPOSE AND EFFECT OF THE RIGHTS ISSUE 4.1 Use of Funds The Company is seeking to raise approximately $2.8 million from this Rights Issue, before costs of the Rights Issue. The Company intends to use the net proceeds raised from this Rights Issue to complete the acquisition of the Conrad Silver Project detailed in section 2.3 of this Prospectus, to make an investment in WRM, to continue evaluation of additional acquisition targets and to provide working capital. The funds raised from the Rights Issue are intended to be used in accordance with the table set out below: Use of Funds Rights Issue Acquisition of the Conrad Silver Project $400,000 Investment in WRM $500,000 Evaluation of additional acquisition targets $200,000 Investments in tenement, land and other assets $350,000 Exploration expenditure on Webbs Silver Project and Conrad Silver Project $450,000 Transaction Costs (Note A) $250,000 General working capital and reduction of debts and creditors (Note B) $621,771 Total Use of Funds $2,771,771 Notes (A) Estimated costs of the Rights Issue including fees to the Underwriters, legal fees, consultancy fees, Share Registry, ASX, ASIC fees and other miscellaneous expenses directly attributable to the Rights Issue but not including the value of any Underwriter Shares or Underwriter Options issued to the Underwriters as part consideration under the Underwriting Agreements. See section 7.7 for further detail in relation to the issue of Underwriter Shares and Underwriter Options. (B) General working capital includes but is not limited to corporate administration and operating costs and may be applied to directors' fees, ASX and Share Registry fees, legal, tax, audit fees, insurance and travel costs. The above table is a statement of current intentions as at the date of this Prospectus. New circumstances may arise with the potential to affect the manner in which the funds raised under the Rights Issue are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis. 4.2 Historical and pro forma financial position The selected historical consolidated financial information in relation to the Company set out below has been extracted from the financial statements of the Company for the six months ended 31 December These financial statements were subject to an audit review. Page 28 of 69

31 The Company prepares its financial statements in accordance with the Australian equivalents to the International Financial Reporting Standards (AIFR AIFR). The accounting policies upon which the pro-forma financial information has been prepared are set out in the Company's financial statements for the year ended 30 June A copy of the Company's annual report and financial statements for the year ended 30 June 2014 and half-year ended 31 December 2014 can be viewed on the ASX platform (ticker: SVL). The pro-forma consolidated balance sheet is presented in abbreviated form and does not contain all the disclosures that are usually found in financial statements prepared in accordance with the Corporations Act. This information is not represented as being indicative of the Company's views on its future financial condition and/or performance. The pro-forma balance sheet has been prepared for illustrative purposes only, to show the impact on the 31 December 2014 balance sheet of the net proceeds of approximately $2.522 million from the Rights Issue, arrived at after deduction of $250,000 in expenses relating to the Rights Issue. The pro forma balance sheet is not intended to be a statement of the Company's current financial position. The Company has not yet prepared its financial statements for the year ended 30 June 2015 (although, the Directors are not aware of any matter which has occurred post-31 December 2014 which will materially alter the pro-forma balance sheet as presented). The pro forma balance sheet has not been subject to audit. Current assets 31/12/2014 Pro forma (Rights Issue) Pro forma Post Rights Issue A$ A$ A$ Cash and cash equivalents 5 56,644 2,521,771 2,578,415 Receivables 104, ,788 Prepayments - Total current assets 161,432 2,521,771 2,683,203 Non-current assets Property, plant & equipment 8,949-8,949 Intangible assets 5,170,000-5,170,000 Other financial assets 189, ,529 Total non-current assets 5,368,478-5,368,478 Total assets 5,529,910 2,521,771 8,051,681 5 The cash and cash equivalents and share capital figures are included after deducing the Right Issue costs of $250,000 from the Right Issue proceeds. Page 29 of 69

32 31/12/2014 Pro forma (Rights Issue) Pro forma Post Rights Issue Current liabilities Trade and other payables (see Note A) (407,958) - (407,958) Total current liabilities (407,958) - (407,958) Total liabilities (407,958) - (407,958) Net assets (Liabilities) 5,121,952 2,521,771 7,643,723 Equity Share capital 6 19,748,506 2,521,771 22,270,277 7 Foreign currency translation Reserves Accumulated losses (14,626,554) - (14,626,554) Total equity 5,121,952 7,643,723 The following additional information should be taken into consideration when evaluating the movements in the Company's financial position and the effects of the Rights Issue (Placement and Ochre Placement, if approved by Shareholders). Note A: Movements in liabilities Subject Related parties Notes Description For each of David Sutton and Douglas Flinn, $20,000 of director fees will be satisfied by the issue of 20,000,000 Placement Shares. In addition, each of David Sutton and Douglas Flinn, will be paid $53,825 and $25,000 respectively in cash for the balance of their unpaid director fees. For James Naughton, $50,000 of director fees will be satisfied by the issue of 50,000,000 Placement Shares. For Charles Straw, he will be paid $118,550 in cash for unpaid remuneration as an executive director. There is $55,257 owing to Raxigi Pty Limited 8 in relation to consultancy fees as at 31 August The cash and cash equivalents and share capital figures are included after deducing the Right Issue costs of $250,000 from the Right Issue proceeds. 7 This amount only represents the issued capital as at 31 December 2014 (reviewed) and the effect on share capital of the Rights Issue only. The figure does not include changes to share capital which will result if the Placement Shares are issued, nor changes to share capital that occurred in accordance with Appendix 3B issued 13 February 2015 and 1 September Page 30 of 69

33 The information set out in the Quarterly Cash Flow Statements (Appendix 5) released to the market for the quarters ended 31 March 2015 and 30 June 2015 should also be taken in to account when evaluating the movements in the Company's financial position and the effects of the Rights Issue (Placement and Ochre Placement, if approved by Shareholders). It should be noted that the pr-forma balance sheet does not include any movement since 31 December 2014 and Shareholders must take into account cash flow statements (Appendix 5B) for 31 March 2015 and 30 June 2015 quarters released to the market. 4.3 Effect on capital structure On the basis that no existing options will be exercised before the Record Date, the effect of the Rights Issue, the Placement and Ochre Placement (if approved by Shareholders), on the Company s issued share capital as at the date of this Prospectus will be as follows: Shares Prospectus Date Rights Issue Combined Rights Issue, Placement and Ochre Placement Existing Shares 692,942, ,942, ,942,714 New Shares issued under Rights Issue 2,771,770,856 2,771,770,856 Underwriter Shares 25,000,000 25,000,000 Placement Shares and Ochre Placement Shares, if approved by Shareholders 1,172,000,000 Total Shares on issue 692,942,714 3,489,713,570 4,661,713,570 Options Existing unquoted options expiring 31 May 2017 at an exercise price of $0.043 Existing unquoted options expiring 23 December 2015 at an exercise price of $0.50 Existing unquoted options expiring 13 December 2015 at an exercise price of $0.01 New Options expiring 13 October 2017 at an exercise price of Prospectus Date Rights Issue 5,800,000 5,800,000 5,800,000 8,500,000 8,500,000 8,500,000 83,180,135 83,180,135 83,180,135 Combined Rights Issue, Placement and Ochre Placement 1,385,885,428 1,385,885,428 8 Vaz Hovanessian, the Company's company secretary, is the sole director and company secretary of Raxigi Pty Limited. Page 31 of 69

34 $0.003 issued under the Rights Issue Underwriter's Options expiring 13 October 2017 at an exercise price of $ ,000, ,000,000 Placement Options expiring 13 October 2017 at an exercise price of $ ,500,000 Total Options on issue 97,480,135 1,633,365,563 2,061,865, Dilutionary impact The Rights Issue is fully underwritten by the Underwriters and accordingly all New Shares and New Options offered under the Rights Issue will be taken up. On this basis, if an Eligible Shareholder takes up their full Right under the Rights Issue, their percentage interest in the Company will only be reduced to the extent of the Underwriter Shares issued to the Underwriters in part consideration for the underwriting. If a Shareholder does not take up their Right under the Rights Issue or is otherwise not eligible to participate in the Rights Issue, the Shareholder's interest in the Company will be reduced by 85.14%. If, however, the placements are approved by Shareholders such that the Company issues an additional 947,000,000 Placement Shares, 428,500,000 Placement Options and 225,000,000 Ochre Placement Shares, then Eligible Shareholders who take up their full Right under the Rights Issue, but do not participate in the Placement and Ochre Placement, their interest in the Company will be reduced up to a maximum of 25.68%. 4.5 Effect on control (a) Substantial Shareholders There are no substantial shareholders of the Company who hold more than 5% of the voting power of the Company. Accordingly, the Company does not expect that the Rights Issue will have a material effect on the control of the Company. (b) Underwriters Other than the Underwriters, no person is permitted to increase its voting power in the Company from a starting point below 20% to more than 20% or from a starting point above 20% and below 90% as a result of this Rights Issue. DJ Carmichael Pty Limited and Fern Street Partners Pty Ltd have each agreed with the Company to underwrite a portion of the Rights Issue in their Respective Proportion. A summary of the underwriting agreements (which are in substantially identical form) is set out in section 7.7. DJ Carmichael Pty Limited has agreed to underwrite the Rights Issue up to a maximum amount of approximately $2,050,000 of any shortfall on the terms of the Underwriting Agreement. In addition to a cash fee, DJ Carmichael Pty Limited will be issued 25,000,000 New Shares and 150,000,000 New Options in consideration for underwriting and managing the Rights Issue. DJ Carmichael Pty Limited does not hold any securities in the Company and there are no other agreements or arrangements which it has with respect to the securities in the Company. Neither DJ Carmichael Pty Limited nor any of its associates will participate in the Placement or Ochre Placement. Page 32 of 69

35 Fern Street Partners Pty Ltd has agreed to underwrite the Rights Issue up to an amount of approximately $721,771 of any shortfall on the terms of the Underwriting Agreement. Raxigi Pty Ltd is the ultimate holding company of Fern Street Partners Pty Ltd. Vaz Hovanessian, the Company's company secretary, is the sole director and company secretary of Raxigi Pty Ltd. Vaz Hovanessian is an associate of Fern Street Partners Pty Ltd as he is also the director and company secretary of Fern Street Partners Pty Ltd. As a result of the underwriting arrangements, each of DJ Carmichael Pty Ltd's and Fern Street Partners Pty Ltd's voting power in the Company may increase above 20%. Relevantly, the Underwriters' voting power in the Company may increase above 20% in reliance on the underwriting exception in section 611(item 13) of the Corporations Act. The effect on DJ Carmichael Pty Ltd's voting power as a result of the Rights Issue is as follows (this table should be read having regard to the sub-underwriting arrangements described in section 4.5(c)): Event DJ Carmichael Pty Limited Relevant Interest as at the date of the Prospectus 12 Cumulative no. of Shares % voting power where no Placement and no Ochre Placement (0% subscription) 9 % voting power Placement and Ochre Placement (both approved by Shareholders) (0% subscription) % 0% 0% % voting power Placement and Ochre Placement (both approved by Shareholders) ) (50% subscription) 11 Underwriting proportion 2,075,000, % 44.51% 22.52% 14 (including Underwriter Shares) 13 Exercise of DJ Carmichael Pty Limited's Underwriting Options and all Options issued to DJ Carmichael Pty Limited under the underwriting arrangement (assuming no other New 3,250,000, % % % 17 9 This assumes 0% subscription by Shareholders in the Rights Issue and that the Underwriter has taken up its maximum Underwritten Amount. 10 See note 9 above. 11 This assumes 50% subscription by Shareholders in the Rights Issue and that the Underwriter has taken up 50% of its Underwritten Amount. 12 DJ Carmichael Pty Limited has no associates with a Relevant Interest as at the date of the Prospectus. 13 This includes the 25,000,000 Underwriter Shares that will be issued to DJ Carmichael Pty Limited as consideration in accordance with the Underwriting Agreement. 14 Note that the cumulative number of Shares used in this calculation is 1,050,000,000 (not 2,075,000,000) as this scenario assumes that the Underwriter has only taken up 50% of its Underwritten Amount. 15 The Underwriter will not be able to rely on the underwriting exception in section 611 item 13 of the Corporations Act to increase its voting power above 20%, or to further increase its voting power once it is already above 20%, in respect of the issue of Shares from the exercise of any Options issued pursuant to this Rights Issue. The Underwriter will need to rely on another exception in section 611 of the Corporations Act in relation to the issue of Shares from the exercise of any Options issued pursuant to this Rights Issue for the Underwriter to reach this maximum voting power. 16 See note 15 above. 17 See note 15 above. Also note that the cumulative number of Shares used in this calculation is 1,712,500,000 (not 3,250,000,000) as this scenario assumes that the Underwriter has only taken up 50% of its Underwritten Amount. Page 33 of 69

36 Event Options and no Placement Options (if applicable) are exercised) Exercise of DJ Carmichael Pty Limited's Underwriting Options and all Options issued to D.J Carmichael Pty Limited under the underwriting arrangement (assuming all New Options and Placement Options (if applicable) are exercised) Cumulative no. of Shares % voting power where no Placement and no Ochre Placement (0% subscription) 9 % voting power Placement and Ochre Placement (both approved by Shareholders) (0% subscription) % voting power Placement and Ochre Placement (both approved by Shareholders) ) (50% subscription) 3,250,000, % % % See note 15 above. 19 See note 15 above. 20 See note 17 above. Page 34 of 69

37 The effect on Fern Street Partner Pty Ltd's voting power as a result of the Rights Issue is as follows (this table should be read having regard to the sub-underwriting arrangements described in section 4.5(c)): Event Cumulative number of Shares % voting power where no Placement and no Ochre Placement (0% subscription) 21 % voting power Placement and Ochre Placement (both approved by Shareholders) (0% subscription) 22 % voting power Placement and Ochre Placement (both approved by Shareholders) (50% subscription) 23 Fern Street Partners Pty Ltd Relevant Interest as at the date of the Prospectus % 0% 0% Underwriting proportion 721,770, % 16.34% % 26 Exercise of all Options issued to Fern Street Partners Pty Ltd under the underwriting arrangement and the Fern Street Partners Pty Ltd Placement Options (assuming no other New Options, no Underwriter Options and no other Placement Options (if applicable) are exercised). 1,082,656, % % % This assumes 0% subscription by Shareholders in the Rights Issue and that the Underwriter has taken up its maximum Underwritten Amount. 22 See note 21 above. 23 This assumes 50% subscription by Shareholders in the Rights Issue and that the Underwriter has taken up 50% of its Underwritten Amount. Also note, if the Placement is approved by the Shareholders, Raxigi Pty Ltd, a company controlled by Vaz Hovanessian, an associate of Fern Street Partners Pty Ltd, will be issued 40,000,000 Placement Shares and 20,000,000 Placement Options. 24 Fern Street Partners Pty Ltd has no associates with a Relevant Interest as at the date of the Prospectus. 25 Note that the cumulative number of Shares used in this calculation is 761,770,856 (not 721,770,856) as this scenario assumes that Raxigi Pty Ltd (an associate of Fern Street Partners Pty Ltd) has received 40,000,000 Placement Shares. 26 Note that the cumulative number of Shares used in this calculation is 400,885,428 (not 721,770,856) as this scenario assumes that the Underwriter has only taken up 50% of its Underwritten Amount and that Raxigi Pty Ltd (an associate of Fern Street Partners Pty Ltd) has received 40,000,000 Placement Shares. 27 The Underwriter will not be able to rely on the underwriting exception in section 611 item 13 of the Corporations Act to increase its voting power above 20%, or to further increase its voting power once it is already above 20% in respect of the issue of Shares from the exercise of any Options issued pursuant to this Rights Issue. The Underwriter will need to rely on another exception in section 611 of the Corporations Act in relation to the issue of Shares from the exercise of any Options issued pursuant to this Rights Issue for the Underwriter to reach this maximum voting power. 28 See note 27 above. Also note that the cumulative number of Shares used in this calculation is 1,142,656,284 (not 1,082,656,284) as this scenario assumes that Raxigi Pty Ltd (an associate of Fern Street Partners Pty Ltd) has received 40,000,000 Placement Shares and 20,000,000 Placement Options. 29 Note that the cumulative number of Shares used in this calculation is 601,328,142 (not 1,082,656,284) as this scenario assumes that the Underwriter has only taken up 50% of its Underwritten Amount and that Raxigi Pty Ltd (an associate of Fern Street Partners Pty Ltd) has received 40,000,000 Placement Shares and 20,000,000 Placement Options. Page 35 of 69

38 Event Cumulative number of Shares % voting power where no Placement and no Ochre Placement (0% subscription) 21 % voting power Placement and Ochre Placement (both approved by Shareholders) (0% subscription) 22 % voting power Placement and Ochre Placement (both approved by Shareholders) (50% subscription) 23 Exercise of all Options issued to Fern Street Partners Pty Ltd under the underwriting arrangement and all Fern Street Partners Pty Ltd Placement Options (assuming all New Options, all Underwriter Options and all other Placement Options (if applicable) are exercised) 1,082,656, % % % 32 (c) Sub-Underwriters The Underwriters have confirmed that the Underwritten Amount is fully sub-underwritten. DJ Carmichael Pty Limited DJ Carmichael Pty Limited has fully sub-underwritten its underwriting obligation with respect to the Rights Issue, with 29 sub-underwriters. DJ Carmichael Pty Limited has confirmed that none of the sub-underwriters are related parties of the Company nor are they existing Shareholders. The sub-underwriting arrangements are on the same terms such that each sub-underwriter has agreed to take up the same proportion of the shortfall amount in relation to their subunderwriting commitment. If there is a 50% shortfall, no sub-underwriter will obtain voting power in the Company of more than 5%. 33 If there is a 100% shortfall and the Placement and Ochre Placement are approved by the Shareholders, one sub-underwriter will obtain voting power in the Company of greater than 5% (being 6.01%). 34 If there is a 100% shortfall and the Placement and Ochre Placement are not approved by the Shareholders, two sub-underwriters will obtain voting power in the Company of greater than 5% (with the highest percentage being 8.02%) See note 27 above. 31 Note that the cumulative number of Shares used in this calculation is 1,142,656,284 (not 1,082,656,284) as this scenario assumes that Raxigi Pty Ltd (an associate of Fern Street Partners Pty Ltd) has received 40,000,000 Placement Shares and 20,000,000 Placement Options. 32 See note 29 above. 33 This assumes that no person has exercised any New Options, Underwriter Options or Placement Options. 34 This assumes that no person has exercised any New Options, Underwriter Options or Placement Options. 35 This assumes that no person has exercised any New Options, Underwriter Options or Placement Options. Page 36 of 69

39 Fern Street Partners Pty Ltd Fern Street Partners Pty Ltd has fully sub-underwritten its underwriting obligation with respect to the Rights Issue, with five sub-underwriters. One of the sub-underwriters is David Sutton, a director of the Company (who is sub-underwriting through his associated company, Dayton Way Financial Pty Limited ACN ). The sub-underwriting arrangements are on the same terms such that each sub-underwriter has agreed to take up the same proportion of the shortfall amount in relation to their the subunderwriting commitment. The effect on each sub-underwriter's voting power and were a substantial shareholder may arise as a result of the Rights Issue is as follows: 36 Sub-underwriter underwriter No. of Shares (maximum underwriting by each sub- underwriter) % voting power where no Placement and no Ochre Placement (0% subscription) 37 % voting power Placement and Ochre Placement (both approved by Shareholders) (0% subscription) 38 Chris Lawrence ,000, % 8.04% 6.70% Texas Gold (S/F) 125,000, % 5.03% 3.69% Mr Saxon Ball 41 David Sutton ,000, % 5.85% 3.17% % voting power Placement and Ochre Placement (both approved by Shareholders) (50% subscription) 39 If the there is a 50% shortfall, one sub-underwriter will obtain voting power of greater than 5% being Chris Lawrence with an interest of 6.70%. If there is a 100% shortfall and the Placement and Ochre Placement are approved by the Shareholders, three sub-underwriters will obtain voting power in the Company of greater than 5%, with the highest percentage for Chris Lawrence of 8.04%. 36 The calculations in this table assume that no person has exercised any New Options, Underwriter Options or Placement Options. This also assumes that David Sutton does not exercise his existing options currently held in the Company. 37 This column assumes 0% subscription by Shareholders in the Rights Issue and that the sub-underwriter has taken up its maximum sub-underwritten amount. 38 This column assumes 0% subscription by Shareholders in the Rights Issue and that the sub-underwriter has taken up its maximum sub-underwritten amount. 39 This column assumes 50% subscription by Shareholders in the Rights Issue and that the sub-underwriter has taken up 50% of its relevant proportion of the sub-underwritten amount. 40 This sub-underwriter (or an associated entity) will also receive shares pursuant to the Placement, if approved by the Shareholders. 41 This sub-underwriter (or an associated entity) will also receive shares pursuant to the Placement, if approved by the Shareholders. 42 This sub-underwriter (or an associated entity) will also receive shares pursuant to the Placement, if approved by the Shareholders. Page 37 of 69

40 If there is a 100% shortfall and the Placement and Ochre Placement are not approved by the Shareholders, one sub-underwriter will obtain voting power in the Company of greater than 5%, being David Sutton with an interest of 7.24%. As set out in above, no sub-underwriter's voting power in the Company will increase above 10% as a result of the Rights Issue. Page 38 of 69

41 5. RISK FACTORS 5.1 Introduction Any investment carried out under this Prospectus should be considered speculative. Due to the nature of the Company s business activities and mineral exploration interests, increasing your investment in the Company carries with it risks reasonably expected of an investment in a business of this type. Prospective investors should read the whole Prospectus, consider the risk factors described within it and all other relevant material including our public announcements. If Eligible Shareholders are in any doubt, or require clarification or further additional information, they should contact their stockbroker, accountant, solicitor or other professional adviser. Additional risks are detailed below. These risk factors described below should not to be taken as being exhaustive of the risks faced by the Company or an investment in the Company. The risk factors described below, and others not specifically referred to below, may, in the future, affect the financial performance of the Company and the value of an investment in the Company. 5.2 Specific Risks In addition to the general market and economic risks noted in Section 5.3, investors should be aware of the risks specific to an investment in the Company. The major risks are described below: Dilution Risk The Rights Issue is fully underwritten by the Underwriters and accordingly all New Shares and New Options offered under the Rights Issue will be taken up. On this basis, if an Eligible Shareholder takes up their full Right under the Rights Issue, their percentage interest in the Company will only be reduced to the extent of the Underwriter Shares paid to the Underwriters in part consideration for the underwriting. If a Shareholder does not take up their Right under the Offer or is otherwise not eligible to participate in the Offer, the Shareholder's interest in the Company will be reduced by 85.14%. If, however, the Placement and Ochre Placement is approved by Shareholders such that the Company issues an additional 947,000,000 Placement Shares, 428,500,000 Placement Options and 225,000,000 Ochre Placement Shares, then Eligible Shareholders who take up their full Right under the Rights Issue, but do not participate in the Placement and Ochre Placement, their interest in the Company will be reduced by up to a maximum of 25.68%. Changes in commodity price In the event that the Company proceeds to a production scenario, the revenue it will derive through the sale of commodities exposes the potential income of the Company to commodity price risks. Commodity prices (including for silver) fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for commodities, technological advancements, forward selling activities and other macro-economic factors. Operational risk If the Company decides to develop and commission a mine, the operations of the Company including mining and processing may be affected by a range of factors. These include failure to achieve predicted grade in exploration, mining and processing, technical difficulties encountered in commissioning and operating plant and equipment, mechanical failure, metallurgical problems which affect extraction rates and costs, adverse or seasonal weather conditions, adverse geological conditions, industrial and environmental accidents, industrial disputes, unexpected shortages or Page 39 of 69

42 increase in the costs of consumables, spare parts, plant and equipment and inability to obtain or maintain any necessary consents or approvals. Financing The Company's ability to effectively implement its business strategy over time may depend in part on its ability to raise additional funds in the future. There can be no assurance that any such equity or debt funding will be available to the Company on favourable terms or at all. If adequate funds are not available on acceptable terms, the Company may not be able to take advantage of opportunities or otherwise respond to competitive pressures. The Company s failure to raise capital, if and when needed, could delay or suspend the Company s business strategy and could have a material adverse effect on the Company s activities. No assurances can be given that the Company will achieve commercial viability through successful exploration and/or mining. Until the Company is able to realise value from its projects, it is likely to incur ongoing operating losses. Mineral resources estimates risk Mineral resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and mining plans which may, in turn, adversely affect the Company s operations. Native Title risks Both the Native Title Act 1993 (Cth), related State Native Title legislation and Aboriginal land rights and Aboriginal heritage legislation may affect the Company s ability to gain access to prospective exploration areas or obtain production titles. Compensatory obligations may be necessary in settling Native Title claims if lodged over any tenements acquired by the Company. In New South Wales, the Native Title legislation imposes a duty of care which requires persons, including the Company, to take all reasonable and practical measures to avoid damaging or destroying Aboriginal cultural heritage. This obligation applies across the State and requires the Company to develop suitable internal procedures to discharge its duty of care in order to avoid exposure to substantial financial penalties if its activities damage items of cultural significance. Under this legislation, indigenous people can exercise control over land with respect to cultural heritage without necessarily having established the connection element (as required under native title law). This creates a potential risk that the tenement holder may have to deal with several indigenous individuals or corporations, where no native title has been established, to identify and manage cultural heritage issues. This could result in tenement holders requiring lengthy lead times to manage cultural heritage for their projects. Reliance on key personnel The Company has a small team of executives, consultants and senior personnel. It is possible that the estimated timing and cost of the Company s future exploration plans could be dramatically influenced by the loss of existing key personnel or by the failure to retain additional key personnel as the Company s exploration program develops. The resulting impact from such loss would be dependent upon the quality and timing of the employee s replacement. Although the key personnel of the Company have a considerable amount of experience and have previously been successful in their pursuits of acquiring, exploring and evaluating mineral projects, Page 40 of 69

43 there is no guarantee or assurance that they will be successful in their objectives pursuant to this Prospectus. Liquidity and volatility The Company is a small company in terms of market capitalization with a relatively limited number of shareholders. As a consequence, there may be relatively few buyers or sellers of securities on the ASX at any given time and the market price may be highly volatile (particularly in times of share market turbulence or negative investor sentiment). This may present difficulties for shareholders seeking to liquidate their holdings. Exploration risk There can be no guarantee that planned exploration programs will lead to positive exploration results and the discovery of a commercial deposit or further, a commercial mining operation. By its nature the business of mineral exploration, which the Company will be undertaking, contains risks. For its part, exploration is a speculative endeavour and can be hampered by the unpredictable nature of mineral deposits, particularly with respect to predicted extrapolations to depth from known mineralisation, poor drilling techniques, incorrect grade estimates, unforeseen and adverse ground conditions, flooding, inclement weather, poor equipment availability, force majeure circumstances and cost overruns from unforeseen events. Resource estimates themselves are necessarily imprecise and depend upon interpretations that can prove to be inaccurate. Any future successful mining operation will depend on exploration success, mineral resource calculations, appropriate economic circumstances, ore reserve calculations, successful statutory planning approvals, mine design and the construction of efficient processing facilities, competent operation and management and efficient financial management. The future exploration activities of the Company may be affected by a range of factors including, geological conditions, limitations on activities due to seasonal weather patterns, unanticipated operational and technical difficulties, industrial and environmental accidents, changing government regulations and many other factors beyond the control of the Company. The success of the Company will also depend upon the Company having access to sufficient development capital, being able to maintain title to its exploration licences, and obtaining all required approvals for its activities. In the event that exploration programs prove to be unsuccessful this could lead to a diminution in the value of the tenements, a reduction in the cash reserves of the Company and possible relinquishment of tenements. Environmental risk The Company s operations and projects are subject to State and Federal laws and regulations concerning the environment. These laws and regulations set various standards regulating certain aspects of health and environmental quality and provide for penalties and other liabilities for the violation of such standards and establish, in certain circumstances, obligations to remediate current and former facilities and locations where operations are or were conducted. Significant liability could be imposed on the Company for damages, clean up costs, or penalties in the event of certain discharges into the environment, environmental damage caused by previous owners of property acquired by the Company or its subsidiaries, or non compliance with environmental laws or regulations. Mining operations have inherent risks and liabilities associated with safety and damage to the environment and the disposal of waste products occurring as a result of mineral exploration and production. The occurrence of any such safety or environmental incident could delay production or increase production costs. Events, such as unpredictable rainfall or bushfires, may impact on the Company s ongoing compliance with environmental legislation, regulations and licences. Significant Page 41 of 69

44 liabilities could be imposed on the Company for damages, clean up costs or penalties in the event of certain discharges into the environment, environmental damage caused by previous operations or non-compliance with environmental laws or regulations. The Company proposes to minimise these risks by conducting its activities in an environmentally responsible manner, in accordance with applicable laws and regulations and where possible, by carrying appropriate insurance coverage. Contractual risks As in any contractual relationship, the ability for the Company to ultimately be registered as a holder of an interest in the tenements is dependent upon the relevant vendor complying with its contractual obligations to deliver title. To the extent that such third parties default in their obligations under the option contracts, it may be necessary for the Company to approach a Court to seek a legal remedy. Such legal action may be costly and no guarantee can be given by the Company that a legal remedy will ultimately be granted on appropriate terms. Land access risk Land access is critical for exploration and evaluation to succeed. In all cases the acquisition of prospective tenements is a competitive business, in which propriety knowledge or information is critical and the ability to negotiate satisfactory commercial arrangements with other parties is often essential. Regulatory risk The Company s mining operations, exploration and development activities are subject to extensive laws and regulations relating to numerous matters including resource licence consent, conditions including environmental compliance and rehabilitation, taxation, employee relations, health and worker safety, waste disposal, protection of the environment, native title and heritage matters, protection of endangered and protected species and other matters. The Company requires permits from regulatory authorities to authorise the Company s operations. These permits relate to exploration, development, production and rehabilitation activities. Obtaining necessary permits can be a time consuming process and there is a risk that the Company will not obtain these permits on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining necessary permits and complying with these permits and applicable laws and regulations could materially delay or restrict the Company from proceeding with the development of a project or the operation or further development of a mine. Any failure to comply with applicable laws and regulations or permits, even if inadvertent, could result in material fines, penalties or other liabilities. In extreme cases, failure could result in suspension of the Company s activities or forfeiture of one or more of the tenements. Government policy The availability and rights to explore and mine, as well as industry profitability generally, can be affected by changes in government policy that are beyond the control of the Company. The New South Wales Minister for Industry, Resources and Energy conducts reviews from time to time of policies in connection with the granting and administration of mining tenements. At present the Company is not aware of any proposed changes to policy that would affect its tenements. Changing attitudes to environmental, land care, cultural heritage and indigenous land rights issues, together with the nature of the political process, provide the possibility for future policy changes. There is a risk that such changes may affect the Company s exploration plans or, indeed, its rights and/or obligations with respect to the tenements. Page 42 of 69

45 Title Interests in tenements in Australia are governed by the respective State Government legislation and are evidenced by the granting of tenements through the issuing of a lease or licence. Each lease or licence is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to, or its interests in, tenements if licence conditions are not met or if sufficient funds are not available to meet expenditure commitments. Any failure to comply with the expenditure conditions, or with the other conditions of the mining lease (ML) or the exploration licences (ELs) expose the licence to forfeiture. In the event that the Company is successful in the discovery of an economic body of mineralisation within any EL, the Company will have the right to apply for a mining lease. Such tenements will only be granted on the terms and conditions that the relevant Minister considers appropriate. Once granted, such leases are liable to forfeiture on breach of any conditions. Force majeure The Company s projects now or in the future may be adversely affected by risks outside the control of the Company including labour unrest, civil disorder, war, subversive activities or sabotage, fires, floods, explosions or other catastrophes, epidemics or quarantine restrictions. Competition The industry in which the Company will be involved is subject to domestic and global competition. Some of the competing companies have greater financial and other resources than the Company and, as a result, may be in a better position to compete for future business opportunities. While the Company will undertake all reasonable due diligence in its business decisions and operations, the Company will have no influence or control over the activities or actions of its competitors. As such, there can be no assurance that the Company will be able to compete effectively with these companies. 5.3 General Risks A summary of the major general risks are described below: Share market risk There are a number of factors (both domestic and international) that may affect the share market price and neither the Company nor its Directors may have control over such factors. The market price of securities can be expected to rise and fall in accordance with general market conditions and factors specifically affecting the Australian resources sector and exploration companies in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company. General economic conditions Changes in the general economic climate in which the Company operates may adversely affect the financial performance of the Company. Factors that may contribute to that economic climate include the general level of economic activity, interest rates, inflation, supply and demand, industrial disruption, investor sentiment toward particular market sectors, terrorism or other hostilities and other economic factors. The price of commodities and level of activity within the mining industry will also be of particular relevance to the Company. These factors are beyond the control of the Company and the Company cannot, with any degree of certainty, predict how they will impact the Company. Page 43 of 69

46 Legislative change Changes in government regulations and policies may adversely affect the financial performance or the current and proposed operations generally of the Company. Exchange rate risk The revenues, earnings, assets and liabilities of the Company may be exposed adversely to exchange rate fluctuation. Whilst the Company currently raises all of its funds in Australian dollars and all services are paid for in Australian dollars, commodities are frequently traded in USD on international markets. As such in a production off-take scenario, the Company in the future may be exposed to exchange rate fluctuations. Industrial risk Industrial disruptions, work stoppages, safety issues and accidents in the course of the Company s operations could result in losses and delays, which may adversely affect profitability. No profits to date The Company has incurred losses since its inception. It is therefore not possible to evaluate its prospects based on past performance. Since the Company intends invest in its exploration and development program, the Directors anticipate making further losses in the foreseeable future. While the Directors have confidence in the future revenue-earning potential of the Company, there can be no certainty that the Company will achieve or sustain profitability or achieve or sustain positive cash flow from its operating activities. Investment risk The New Shares offered pursuant to this Prospectus should be considered speculative due to the nature of the Company s business. There is no guarantee as to payment of dividends, return of capital or the market value of the New Shares. In particular, the prices at which an investor may be able to trade New Shares may be above or below the price paid for them. Potential investors should consider that an investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus. Insurance The Company intends to adequately insure its operations in accordance with industry practice. However, in certain circumstances, the Company s insurance may not be of a nature or level to provide adequate insurance cover. The occurrence of an event that is not covered or only partially covered by insurance could have a material adverse effect on the business, financial condition and results of the Company. Further, insurance of all risks associated with mineral exploration and production is not always available. Further, where coverage is available, the costs may be prohibitive. Other Other risk factors include those normally found in conducting business, including litigation resulting from the breach of agreements or in relation to employees (through personal injuries, industrial matters or otherwise) or any other cause, strikes, lockouts, loss of service of key management or operational personnel, non-insurable risks, delay in resumption of activities after reinstatement following the occurrence of an insurable risk and other matters that may interfere with the business or trade of the Company. Page 44 of 69

47 The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the shares offered under this Prospectus. Therefore, the shares to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those securities. 5.4 Additional risks associated with the Options Value of the New Options The New Options that are issued as part of the Rights Issue are issued for no additional consideration but require the exercise price of $0.003 to be paid at the time of exercise. If the prevailing trading price of the Company's Shares during the New Option exercise period is lower than the exercise price of the New Options, then it is likely that the New Options will not be exercised. In this case, for investors, the unexercised New Options will not have value and will lapse on the New Option expiry date of 13 October, If the New Options are not exercised, or only some of the New Options are exercised, then the Company may not receive the proceeds that would otherwise be generated if the New Options were exercised and holders paid the exercise price. Liquidity Although the New Options are proposed to be quoted on the ASX, there can be no guarantee that there will be a liquid market for trading of the New Options. Quotation The Company will apply for quotation of the New Options on the ASX within 7 days of the date of this Prospectus. If Eligible Shareholders do not take up their Rights under the Rights Issue there may not be a sufficient number of holders of New Options to satisfy ASX's quotation requirements and quotation may not be granted. Page 45 of 69

48 6. HOW TO APPLY 6.1 What Eligible Shareholders may do Eligible Shareholders may accept their Right either in whole or in part. The number of New Shares and New Options to which you are entitled is shown in the personalised Entitlement and Acceptance Form which accompanies this Prospectus. In determining Rights, any fractional right will be rounded up to the nearest whole number. If you are an Eligible Shareholder, you may participate in the Rights Issue as follows: (a) (b) (c) take up all or part of your Right (and renounce the balance) (see section 6.2(a) below); sell all or part of your Right: (i) (ii) on ASX; or by transferring it directly to another person; or do nothing, in which case you will be deemed to have renounced your Right (see section 6.2(d) below). 6.2 How to participate (a) If you decide to take up all or part of your Right If you are an Eligible Shareholder and wish to take up all or part of your Right, please: (i) (ii) use the BPAY facility as outlined in the accompanying Entitlement and Acceptance Form; or forward the completed Entitlement and Acceptance Form, together with your cheque or bank draft for the amount shown on your Entitlement and Acceptance Form in the reply paid envelope to reach the Company s Share Registry, so that it is received by no later than 5pm AEST on the Closing Date, Tuesday, 6 October 2015, or such later date as the Directors determine. The Company will treat you as applying for as many New Shares (and New Options) as your payment will pay for in full up to your full Right. If you take up and pay for all of your Right, before the close of the Rights Issue, you will be issued your New Shares and New Options on Tuesday, 13 October Any surplus Application Monies received for more than your Right will be refunded after the close of the Rights Issue on or around 15 October 2015 (except for where the amount is less than $2.00, in which case it will be donated to a charity chosen by the Company). No interest will be paid to Eligible Shareholders on any Application Monies received or returned (wholly or partially). The Company also reserves the right (in its absolute discretion) to reduce the number of New Shares allocated to Eligible Shareholders or persons claiming to be Eligible Shareholders if their claims prove to be incorrect or overstated or if they fail to provide information to substantiate their claims. To participate in the Rights Issue, your payment must be received no later than the close of the Rights Issue, being 5pm (AEST) on 6 October Eligible Shareholders who wish to pay via cheque, bank draft or money order will need to also ensure that their completed Page 46 of 69

49 personalised Entitlement and Acceptance Form is also received by that time using the reply paid envelope provided with this Prospectus or otherwise. (b) If you decide to sell all or part of your Right on ASX If you decide to sell all or part of your Right on ASX, you should instruct your stockbroker and provide details as requested from your personalised Entitlement and Acceptance Form. You should allow sufficient time for your instructions to be carried out by your stockbroker. Rights trading on ASX is expected to start at 10am (AEST time) on 3 September 2015 (ASX code: SVL) and ceases at 4pm (AEST time) on 28 September Prices obtainable for Rights may rise and fall over the Rights Trading Period and will depend on many factors including the demand for and supply of Rights on ASX and the value of Shares relative to the Issue Price. If you sell your Right in the Rights Trading Period, you may receive a higher or lower amount than a shareholder who sells their Right at a different time in the Rights Trading Period. You may incur brokerage costs if you choose to sell your Right on ASX. There is no guarantee that there will be a liquid market in traded Rights. A lack of liquidity may impact your ability to sell your Right on ASX and the price you may be able to achieve. The Company assumes no responsibility and disclaims all liability (to the maximum extent permitted by law) to you if you trade your Right before the Rights are issued, or before you receive your personalised Entitlement and Acceptance Form, whether on the basis of confirmation of the allocation provided by the Company or the Share Registry or otherwise. If you wish to sell part of your Right on ASX and renounce the balance, follow the procedures above in respect of the part of your Right you wish to sell on ASX, and do nothing in respect of the balance. (c) If you wish to transfer all or part of your Right other than on ASX If you wish to transfer all or part of your Right other than on ASX, you must forward a completed Renunciation and Transfer Form together with the personalised Entitlement and Acceptance Form and the transferee s Application Monies to the Share Registry in relation to the part of your Right that you wish to transfer. If you hold issuer sponsored securities, you can obtain a Renunciation and Transfer Form by contacting the Share Registry on (02) (within Australia) or (from outside Australia) at any time from 9.00am to 5.00pm (AEST) Monday to Friday during the Rights Trading Period. The Renunciation and Transfer Form together with Application Monies and the Entitlement and Acceptance Form must be received by the Share Registry at the mail or hand delivery address in section 6.3 no later than 5.00pm (AEST) on 6 October If the Share Registry receives both a completed Renunciation and Transfer Form and an application for New Shares in respect of the same Right, the transfer will be given effect in priority to the application. If you hold broker / CHESS sponsored securities, you should request a Renunciation and Transfer Form from your stockbroker. If you wish to transfer part of your Right and renounce the balance, follow the procedures above in respect of the part of your Right you wish to transfer, and do nothing in respect of the balance. Prices obtainable for Rights other than on the ASX will likely differ from those quoted on ASX from time to time over the Rights Trading Period. If you sell your Rights in the Rights Trading Period other than on the ASX, you may receive a higher or lower amount compared to a Page 47 of 69

50 Shareholder who sells their Rights on the ASX or at a different time in the Rights Trading Period on ASX. If you sell your Right, you will forgo any exposure to increases or decreases in the value of the New Shares and New Options had you taken up that Right. Your percentage shareholding in the Company will also be reduced. You may only transfer your Right in this way to a purchaser whose address is in Australia or New Zealand, or otherwise qualify as an 'Eligible Person'. Persons in the United States and persons acting for the account or benefit of a person in the United States will not be eligible to purchase Rights on the ASX or take up Rights purchased on the ASX or otherwise. You should inform any transferee of these restrictions. (d) Do Nothing You may do nothing, in which case you will be deemed to have renounced your Right. 6.3 Payment methods You should also note that, if you do not take up your Right, then although you will continue to own the same number of Shares, your percentage shareholding in the Company will decrease. See section 4.4 regarding the reduction of the percentage of your shareholding in the Company. Payment will only be accepted in Australian currency and cheques, bank drafts, money orders and BPAY payments must be drawn on an Australian bank. (a) (b) Payment by cheque/bank draft Cheques and bank drafts, in Australian currency, should be made payable to Silver Mines Limited and crossed not negotiable. You should ensure that sufficient funds are held in the relevant account(s) to cover the Application Money. If the amount of your cheque for Application Money is insufficient to pay in full for the number of whole New Securities for which you have applied in your Entitlement and Acceptance Form, you will be taken to have applied for such lower number of New Securities which equates to your cleared Application Money (and to have that number of New Securities on your Entitlement and Acceptance Form). If your cheque does not clear due to insufficient funds in your account, your Application will be rejected. BPAY If you intend to pay for the New Securities by BPAY, there is no need to return the Entitlement and Acceptance Form (but you must ensure that your payment is received by no later than 5.00pm AEST on the Closing Date, being 6 October 2015,or such later date as the Directors determine). You should be aware that your financial institution may implement earlier cutoff times with respect to electronic payment and you should take this into account when making payment. If you elect to make payment using BPAY, you must contact your bank, credit union or building society to make payment of the Application Money from your cheque or savings account. Refer to the Entitlement and Acceptance Form for the Biller Code and Customer Reference Number. Eligible Shareholders who have multiple holdings will have multiple Customer Reference Numbers. Please note that BPAY payments must be drawn on an Australian bank. Page 48 of 69

51 (c) General If you have any queries concerning your Right, please contact your stockbroker or professional advisor. Entitlement and Acceptance Forms accompanying cheques or bank draft may be lodged at any time before the Closing Date. Applications received after the Closing Date may not be accepted. The Company will not be responsible for postal or delivery delays. The Issue Price for each New Share is payable in full on acceptance of part or all of your Right. No consideration is payable for the attaching New Option. Completed Entitlement and Acceptance Forms and accompanying cheques should be forwarded to the following address: 6.4 Issue and quotation (a) Boardroom Pty Limited Level 12, 225 George Street Sydney NSW 2000 The amount payable on acceptance will not vary during the Rights Issue period and no further amount is payable on allotment. Application Money will be held in trust in a subscription account until the issue of the New Securities. The subscription account will be established and kept by the Company on behalf of the Applicants. Any interest earned on the Application Money will be retained by the Company irrespective of whether allotment takes place. No stamp duty, brokerage or handling fees are payable by the Applicant for the New Securities offered by this Prospectus. Eligible Shareholders should obtain independent advice on the taxation implications arising out of their participation in the Rights Issue. Issue of New Shares and New Options The New Shares and New Options to be issued under the Rights Issue will be issued in accordance with the timetable set out in section c.1 of this Prospectus. Pending the allotment and issue of New Shares and New Options or payment of refunds under this Prospectus, the Company will hold all Application Money on trust for you in a separate bank account. The Company will, however, be entitled to retain all interest that accrues on any Application Money it holds, irrespective of whether issue of the New Shares and New Options takes place. (b) Quotation by b y ASX The Company will apply to ASX for quotation of the New Shares and the New Options within 7 days of the date of this Prospectus. If the ASX accepts the Company's application, quotation of the New Shares and New Options will commence after the issue of the New Shares and New Options. If any New Shares are not granted quotation on ASX within 3 months after the date of this Prospectus, or such longer period as is permitted by the Corporations Act, we will not issue those New Shares or the New Options and the Application Money in respect of those New Shares and New Options will be refunded to you without interest within the time prescribed by the Corporations Act. Page 49 of 69

52 If any New Options are not granted quotation on ASX within 3 months after the date of this Prospectus or such longer period as is permitted by the Corporations Act, the Company will still grant those New Options but they will not be quoted. (c) Holding Statements The Company participates in the security transfer system known as CHESS. CHESS is operated by ASX Settlement Pty Ltd (ACN ) (a wholly owned subsidiary of ASX) in accordance with the Listing Rules and the ASX Settlement Operating Rules. Under CHESS you will not receive a share certificate. You will receive a holding statement setting out the number of New Shares issued to you under this Prospectus. If you are broker sponsored, ASX Settlement will send you a CHESS statement. Page 50 of 69

53 7. ADDITIONAL INFORMATION ON 7.1 Currency of information The information in this Prospectus is dated 9 September There may be additional announcements made by the Company after the date of this Prospectus and throughout the Rights Issue period that may be relevant to your consideration of whether to exercise or do nothing in respect of your Right. Therefore, you are encouraged to check whether any further announcements have been made by the Company before submitting your application. Refer to ASX's website (ticker: SVL). No party other than the Company has authorised or caused the issue of the information in this Prospectus, or takes any responsibility for, or makes any statements, representations or undertakings in this Prospectus. 7.2 Rights and liabilities attaching to New Shares There is only one class of Share in the Company, fully paid ordinary shares. The New Shares will rank equally with and have the same rights in all other respects as the Shares including for any dividend issued after the date of this Prospectus. The Company is registered in Australia under the Corporations Act. The rights and liabilities attaching to Shares in the Company are: (a) (b) set out in the constitution of the Company, a copy of which is available to inspect during business hours at the registered office of the Company; and in certain circumstances, regulated by the Corporations Act, the Listing Rules, ASX Settlement Operating Rules and the general law. A summary of the more significant rights attaching to Shares is set out below. This summary is not exhaustive nor does it constitute a definitive statement of the rights and liabilities of our Shareholders. Voting At a general meeting of the Company on a show of hands, every member present in person, or by proxy, attorney or representative has one vote and upon a poll, every member present in person, or by proxy, attorney or representative has one vote for every Share held by them. Dividends The New Shares will rank equally with all other issued Shares in the capital of the Company and will participate in any dividends the Directors may determine to distribute out of profits earned by the Company from time to time. Subject to the rights of holders of Shares of any special preferential or qualified rights attaching thereto, the profits of the Company are divisible amongst the holders of Shares in proportion to the Shares held by them irrespective of the amount paid up or credited as paid up thereon. The Directors may from time to time pay to Shareholders such dividends as in their judgment the position of the Company justifies. Winding up Upon paying the Application Monies, shareholders will have no further liability to make payments to the Company in the event of the Company being wound up. Power to issue Shares Subject to the Listing Rules, the Board may issue such number of Shares as it determines. The Board may issue shares in the Company that rank as to voting or distribution rights, or both, equally or in priority to any existing Shares. Page 51 of 69

54 Transfer of Securities Generally, the securities in the Company will be freely transferable, subject to satisfying the usual requirements of security transfers on the ASX. The Directors may decline to register any transfer of Shares but only where permitted to do so under its Constitution or the Listing Rules. Sale of non-marketable holdings The Company may take steps in respect of non-marketable holdings of Shares in the Company to effect an orderly sale of those Shares in the event that holders do not take steps to retain their holdings. The Company may only take steps to eliminate non-marketable holdings in accordance with the Constitution and the Listing Rules. For more particular details of the rights attaching to Shares in the Company, investors should refer to the Constitution of the Company. 7.3 Rights and liabilities attaching to New Options and Placement Options The New Options and Placement Options entitle the holder to subscribe for Shares on the following terms and conditions: (a) (b) Each Option gives the Option holder the right to subscribe for one Share. To obtain the right given by each Option, the Option holder must exercise the Options in accordance with the term and conditions of the Options. The commencement date (Commencement Date) for the exercise of the Options shall be the date of issue. (c) The Options will, except to the extent earlier exercised, expire at 5:00pm (AEST) on 13 October, 2017 (Option Expiry DateD ate). Any Option not exercised before the Option Expiry Date will automatically lapse on the Option Expiry Date. (d) (e) (f) (g) (h) (i) (j) (k) The exercise price for each Option shall be $0.003 (Exercise Price). The Option exercise period shall be the period commencing on the Commencement Date of the relevant Options and expiring on the Option Expiry Date of the relevant Options (Exercise Period). The Options will be freely transferable. The Options may be exercised at any time wholly or in part by delivering a duly completed form of notice of exercise specifying the number of Options being exercised together with a cheque for the exercise price to the Company (Exercise Notice) at any time during the Option Exercise Period. An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds. Within 10 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Options specified in the Exercise Price. The Company will apply for quotation of the Options on ASX. All Shares allotted upon exercise of Options will upon allotment rank pari passu in all respects with the then issued ordinary shares of the Company. Page 52 of 69

55 (l) (m) (n) (o) (p) (q) If at any time the issued capital of the Company is reconstructed, all rights of an Option holder are to be changed in a manner consistent with the Corporations Act and the Listing Rules at the time of the reconstruction. Other than pursuant to term (l), an Option does not confer the right to a change in exercise price or a change in the number of underlying securities over which the option can be exercised. There are no participating rights or entitlements inherent in the Options and Option holders will not be entitled to participate in new issues of securities of the Company offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 4 Business Days after the issue is announced. This will give Option holders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue. If there is a bonus issue to the holders of shares in the Company, the number of shares over which the Option is exercisable may be increased by the number of shares which the Option holder would have received if the Option had been exercised before the record date for the bonus issue. The terms of the Options shall only be changed if holders of ordinary shares in the Company who are not excluded from voting approve of such a change. However, the terms of the Options cannot be changed to reduce the exercise price, increase the number of Options or change any period for exercise of the Options. If at any time a meeting of holders of Options is required or proposed, the rules applicable to the convening and holding of, and voting at, a general meeting of the Company will apply so far as they are capable of application (and with all necessary changes) to that meeting on the basis that on a poll a holder is entitled to 1 vote for each Option held. 7.4 Trading of Rights and New Shares and New Options It is expected that trading of Rights on ASX will commence at 10 am on 3 September 2015 until 4 pm 28 September The Company will have no responsibility and disclaims all liability (to the maximum extent permitted by law, including for negligence) to persons who trade Rights before the New Shares and New Options are quoted on a normal ('T+3') settlement basis on ASX or before they receive their confirmation of issue, whether on the basis of confirmation of the allocation provided by the Company or the Share Registry, the Underwriters or otherwise or who otherwise trade or purport to trade Rights in error or which they do not hold or are not entitled. If you are in any doubt as to these matters, you should first consult with your stockbroker or other professional adviser. 7.5 Rounding of Rights Where fractions arise in the calculation of Rights, they will be rounded up to the next whole number of New Shares. 7.6 Ineligible Shareholders The Company is of the view that it is unreasonable to make an offer under the Rights Issue to Shareholders whose registered address is not in Australia or New Zealand or who are otherwise ineligible under applicable securities laws to receive an offer under the Rights Issue having regard to Page 53 of 69

56 the number of Ineligible Shareholders, the number and value of Shares held by the Ineligible Shareholders and the cost of complying with legal and regulatory requirements in each of those jurisdictions. Accordingly, the Rights Issue is not being extended, and New Shares and New Options will not be issued, to Ineligible Shareholders. Only Eligible Shareholders are entitled to participate in the Rights Issue. However, to satisfy applicable Listing Rule requirements, the Company expects to appoint a nominee and will issue that nominee with the Rights to subscribe for New Shares that would otherwise have been available for subscription by Ineligible Shareholders. The nominee will arrange for the sale of those Rights to certain institutional investors to be conducted before the Closing Date and will work with the Company to distribute any Premium (net of expenses and withholdings required by law) proportionately to Ineligible Shareholders. 7.7 Summary of Underwriting Agreements The Underwriting Agreements with each of DJ Carmichael Pty Limited and Fern Street Partners Pty Ltd are substantially identical, except for the fees payable to the Underwriter and the Underwritten Amount. To facilitate each of DJ Carmichael Pty Limited and Fern Street Partners Pty Ltd as Underwriters for their Respective Proportion, the Underwriters agreed to vary the terms of the Underwriting Agreements pursuant to a side letter. A summary of the Underwriting Agreements and the Side Letter are set out below. Underwriting Fees and Underwritten Amount (a) DJ Carmichael Pty Limited DJ Carmichael Pty Limited has agreed to underwrite up to a maximum of approximately $2,050,000 of the Rights Issue and the Company has agreed to pay to DJ Carmichael Pty Limited the following remuneration: (i) (ii) (iii) (iv) a fee of $20,000 plus GST for management of the shortfall placement; a fee of 5% plus GST of the gross amount underwritten by the Underwriter; 25,000,000 New Shares at a price of $0.001 each; and 150,000,000 on the same terms as the New Options. (b) Fern Street Partners Pty Ltd Fern Street Partners Pty Ltd has agreed to underwrite up to a maximum of approximately $721,771 of the Rights Issue and the Company has agreed to pay to Fern Street Partners Pty Ltd a fee of $43,306 plus GST for management of the shortfall placement. Other material terms of the Underwriting Agreements The obligation of the Underwriters to underwrite the Rights Issue is subject to a number of conditions, including: (a) (b) (c) each Underwriter being satisfied with the due diligence investigations and due diligence results by the Lodgement Date. The due diligence results include the results of a due diligence program, maintained by the Company including but not limited to all due diligence reports and reports of the due diligence committee (established in connection with the Offer); each Underwriter being satisfied with the form of the Prospectus and having given its consent to be named in the Prospectus by the Lodgement Date; the Prospectus being lodged with ASIC by the Lodgement Date; and Page 54 of 69

57 (d) a legal sign off letter being provided to the due diligence committee by the Company's legal counsel, to the reasonable satisfaction of each Underwriter. Each Underwriting Agreement also contains various representations and warranties, and imposes various obligations on the Company, including representations, warranties and undertakings among other things, to ensure that the Prospectus complies with the Corporations Act, the Listing Rules and all other applicable laws, and to conduct the Rights Issue in accordance with the agreed timetable, Company's Constitution, the Corporations Act, the Listing Rules. The Company has also agreed to pay each Underwriter certain costs of and incidental to the Rights Issue, including reasonable costs of advertising, printing and distributing the Prospectus, professional fees payable to an expert, reasonable legal expenses and disbursements incurred by each Underwriter. The Company has also agreed to indemnify the Underwriter and their officers, employees, agents, advisors and sub-underwriters (Indemnified Parties) from and against any and all losses directly or indirectly incurred by an Indemnified Party arising at any time in connection with the Prospectus and the Offer. Each Underwriter may terminate its obligations under the respective Underwriting Agreement on the occurrence one or more termination events detailed in the Underwriting Agreements. These include: (a) (b) the Company does not lodge the Prospectus on the Lodgement Date or the Prospectus or the Offer is withdrawn by the Company; the Company fails to lodge a supplementary or replacement prospectus in such form and content and within such time as reasonably required by the Underwriter or lodges a supplementary or replacement prospectus without the prior written agreement of the Underwriter; (c) it transpires that the Prospectus does not contain all the information required by section 713 of the Corporations Act; (d) (e) (f) (g) (h) it transpires that there is a statement in the Prospectus that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from the Prospectus (having regard to the provisions of section 713 of the Corporations Act) or if any statement in the Prospectus is or becomes misleading or deceptive or likely to mislead or deceive or if the issue of the Prospectus is or becomes misleading or deceptive or likely to mislead or deceive; a material contravention by the Company of any provision of its constitution, the Corporations Act, the Listing Rules or any other applicable legislation or any policy or requirement of ASIC or ASX; default or breach by the Company under the Underwriting Agreement of any terms, condition, covenant or undertaking; any representation, warranty or undertaking given by the Company in the Underwriting Agreement is or becomes materially untrue or materially incorrect; an event occurs which gives rise to a material adverse effect or any adverse change or any development including a prospective adverse change after the date of the Underwriting Agreement in the assets, liabilities, financial position, trading results, profits, forecasts, losses, prospects, business or operations of the Company including, without limitation, if any forecast in the Prospectus becomes incapable of being met or in the Underwriter's reasonable opinion, unlikely to be met in the projected time; Page 55 of 69

58 (i) (j) any person (other than the Underwriter) who has previously consented to the inclusion of its, his or her name in the Prospectus or to be named in the Prospectus, withdraws that consent; or there is a change in the composition of the Board or a change in the senior management of the Company before completion without the prior written consent of the Underwriter. Side Letter In the Side Letter, DJ Carmichael Pty Ltd and Fern Street Partners Pty Ltd agreed to work together as joint Underwriters in respect of the Rights Issue on the terms and subject to the conditions set out in the Underwriting Agreements, as varied by a side letter. The key terms are as follows: (a) (b) (c) the Underwriters will each underwrite any shortfall of the Rights Issue up to their maximum underwritten amount, in their Respective Proportions; if either Underwriter exercises any rights or powers to terminate an Underwriting Agreement, the other Underwriter may elect, but is not obliged, to: (i) (ii) (iii) 7.8 Directors Interests (a) take up the rights (including the right to be paid all amounts or the Respective Proportion of an amount which, at the date of termination, are not yet payable to or accrued by the terminating Underwriter); perform the remaining obligations of the terminating Underwriter under the terminating Underwriter's Underwriting Agreement; or permit a new underwriter to perform the remaining obligations of the terminating Underwriter subject to the agreement between the terminating Underwriter, the Company and that new underwriter; all rights and obligations of the Underwriters under each Underwriting Agreement are several and independent and not joint and several and neither of the Underwriters are responsible or liable for the acts or omissions of the other Underwriter. Interests of Directors Other than as disclosed in this Prospectus, no Director or proposed Director holds, or has held at any time during the last two years before lodgement of this Prospectus, any interest in: (i) (ii) (iii) the formation or promotion of the Company; or any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Rights Issue; or the Rights Issue itself, and no amounts, whether in cash or New Shares or otherwise, have been paid or agreed to be paid by any person and no benefits have been given or agreed to be given by any person to a Director or proposed Director either to induce him or her to become, or to qualify as, a Director or otherwise for services provided by a Director or proposed Director in connection with the formation or promotion of the Company or the Rights Issue. (b) Interests in securities as at the date of this Prospectus As at the date of this Prospectus, the Directors (and their respective associates) have interests in the securities of the Company as set out in the table below. Page 56 of 69

59 Interests include those held directly and indirectly. Director 43 Number of Shares currently held (as at the date of the Prospectus) Number of Options currently held (as at the date of the Prospectus) % voting power in the Company (as at the date of the Prospectus) David Sutton 44 2,768,114 2,000,000 unlisted options exercisable at $0.50 expiring 23 December 2015 Charles Straw 45 2,393,532 2,000,000 unlisted options exercisable at $0.50 expiring 23 December % 0.34% 582,500 unlisted options exercisable at $0.01 expiring 13 December 2015 Douglas Flinn 46 3,120, ,000 unlisted options exercisable at $0.01 expiring 13 December % Nathan Featherby Nil Nil 0.00% James 25,000,000 Nil 3.60% Naughton 47 Nathan Featherby (a director of the Company, is also a director of Ochre Group Holdings Limited and a substantial shareholder having a Relevant Interest in approximately 22.26% of the shares in Ochre Group Holdings Limited. Vaz Hovanessian is also the company secretary of Ochre Group Holdings Limited. (c) Participation of Directors in Rights Issue As a result of participation in the Rights Issue, no Director will increase its voting power of 20% in the Company as a result of taking up any Right under the Rights Issue or subunderwriting arrangements. Please refer to section 3.4 of this Prospectus regarding the sub-underwritten arrangement with David Sutton, a director of the Company. 43 Each Director who is an Eligible Shareholder will be entitled to participate in the Rights Issue. The table above does not include the New Shares and New Options that the Directors may subscribe for under the Rights Issue. 44 David Sutton holds interests in the Shares and Options noted above through a number of related entities: Karela Giselle Pty Limited, Optex Exchange Pty Limited, HH Sutton Nominees Pty Limited, BCI Investments Limited and in his name personally. 45 Charles Straw holds his shares and unlisted options in the Company note above in his own name and through Davcha Holdings Pty Limited. 46 Douglas Flinn holds all shares and unlisted options in the Company noted above indirectly through Walpett Engineering Pty Ltd. 47 James Naughton holds all shares in the Company noted above indirectly through Kafka Capital Pty Ltd. Page 57 of 69

60 (d) Participation of Directors in the Placement The following directors will participate in the Placement as follows: Placee Placement Shares David Sutton 20,000,000 Doug Flinn 20,000,000 James Naughton 50,000,000 Total 90,000,000 Refer to section 3.6 for further information. 7.9 Interests of experts and advisers Other than as disclosed in this Prospectus, no expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of this Prospectus, nor any firm in which any of those persons is or was a partner nor any company in which any of those persons is or was associated with, has now, or has had, in the two year period ending on the date of this Prospectus, any interest in: (a) (b) (c) the formation or promotion of the Company; or any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Rights Issue; or the Rights Issue itself. In addition, other than as disclosed below, no amounts of any kind (whether in cash, securities or otherwise) have been paid or agreed to be paid to any expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of the Prospectus, or to any firm in which any of those persons is or was a partner or to any company in which any of those persons is or was associated with, for services rendered by that person in connection with the formation or promotion of the Company or the Rights Issue: (a) (b) DJ Carmichael Pty Limited has acted as co-underwriter in relation to the Rights Issue. The Company will pay DJ Carmichael Pty Limited the following for the underwriting services: (i) (ii) (iii) (iv) a fee of $20,000 plus GST for management of the shortfall placement; a fee of 5% plus GST of the gross amount underwritten by the Underwriter; 25,000,000 New Shares; and 150,000,000 New Options. Fern Street Partners Pty Ltd has acted as advisors and co-underwriter to the Company in relation to the Rights Issue. The Company will pay approximately $25,000 (excluding GST) for advisory services and approximately to $43,306 (excluding GST) for underwriting services Expenses of the Offer The expenses connected to the Rights Issue payable by the Company are estimated at approximately $250,000. These estimated expenses include fees to be paid to the Underwriter, advisor fees, legal fees, ASX and ASIC fees and other miscellaneous expenses directly attributable to the Rights Issue. Page 58 of 69

61 7.11 Transaction Specific Prospectus and information excluded from continuous disclosure The Company is a disclosing entity under the Corporations Act and therefore is subject to regular reporting and disclosure obligations. Under those obligations, the Company is required to comply with all applicable continuous disclosure and reporting requirements in the Corporations Act and the ASX Listing Rules. In particular, the Company must comply with the requirement to disclose to any information held by the Company which a reasonable person would expect to have a material effect on the price or the value of the Company's securities. This Prospectus is a "transaction specific prospectus" issued under section 713 of the Corporations Act. In general terms, a "transaction specific prospectus" is required to contain information in relation to the effect of the Rights Issue on the Company and the rights and liabilities attaching to the securities offered. This Prospectus is not required to provide information regarding the Company's assets and liabilities, financial position and performance, profits and losses or prospects. This is on the basis that, as at the date of this Prospectus, the Company has not withheld from its continuous disclosure reporting any information about such matters that investors and their professional advisers would reasonably require to make an informed assessment of such matters and expect to find in this Prospectus other than the following information that the Company has excluded from its continuous disclosure reporting in accordance with the Listing Rules. Information that is already in the public domain has not been reported in this Prospectus other than that which is considered necessary to make this Prospectus complete. The Company, as a disclosing entity under the Corporations Act, states that: (a) (b) (c) it is subject to regular reporting and disclosure obligations; copies of documents lodged with ASIC in relation to the Company (not being documents referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of ASIC; it will provide a copy of each of the following documents, free of charge, to any person on request: (i) (ii) (iii) the annual financial report most recently lodged by the Company with ASIC; any half-year financial report lodged with ASIC after lodgement of the annual financial report and before lodgement of this Prospectus with ASIC; and any continuous disclosure notices given by the Company to ASIC in accordance with the ASX Listing Rules after the lodgement of the annual financial report and before the lodgement of this Prospectus with ASIC. Page 59 of 69

62 The Company lodged its latest annual report with ASX on 18 September Since then until close of trading on ASX on 8 September 2015, a list of documents filed with ASX by or concerning the Company is set out in the table below. Date Description of Announcement 02/09/2015 OGH: to Receive Shares in SVL 02/09/2015 MAR: Revised Terms Agreed re Sale of Conrad Silver Project 01/09/2015 Reinstatement to Official Quotation 01/09/2015 Appendix 3B Rights Issue 01/09/2015 Rights Issue Prospectus 01/09/2015 Prospectus Launch & Company Update 01/09/2015 WRM: Heads of Agreement Funding Update 01/09/2015 Appendix 3B Exercise of Options 19/08/2015 Company Update & Rights Issue Indicative Timetable 07/08/2015 Suspension from Official Quotation 05/08/2015 Trading Halt 31/07/2015 Quarterly Cashflow Report 31/07/2015 Quarterly Activities Report 23/07/2015 SVL and WRM Sign Heads of Agreement. SVL Enhances Management 23/07/2015 WRM: WRM and SVL sign Heads of Agreement 22/07/2015 Trading Halt 07/07/2015 SVL STRATEGY UPDATE 06/07/2015 Discussion with ASX Re pending Rights Issue Terms 17/06/2015 MAR: Malachite Proceeding with Sale of Conrad Silver Project 17/06/2015 Reinstatement to official quotation 17/06/2015 Conrad Acquisition & Proposed Rights Issue 03/06/2015 Significant Silver Potential ELA Applications 27/05/2015 Extension of Suspension pending Financing Transaction 21/05/2015 Request for Suspension 21/05/2015 Suspension from Official Quotation 19/05/2015 Trading Halt 15/05/2015 Change of registry address 11/05/2015 Reinstatement to Official Quotation Page 60 of 69

63 Date Description of Announcement 11/05/2015 Half Year Accounts 11/05/2015 SVL Acquires Conrad Silver Project 11/05/2015 MAR: MAR enters MoU to sell Conrad Silver Project 01/05/2015 Quarterly Cashflow Report - March Qr, /05/2015 Quarterly Activities Report 17/03/2015 Update on Corporate Transaction 17/03/2015 Suspension from Official Quotation 13/03/2015 Trading Halt request 13/03/2015 Trading Halt 13/02/2015 Company Secretary Appointment/Resignation 13/02/2015 Appendix 3B 06/02/2015 Response to ASX Appendix 5B Query 04/02/2015 Change of Address 30/01/2015 Quarterly Activities Report 30/01/2015 Quarterly Cashflow Report 31/12/2014 Appendix 3B 11/12/2014 Change of Director's Interest Notice - James Naughton 8/12/2014 Appendix 3B 28/11/2014 Appendix 3B 28/11/2014 Results of Meeting 7/11/2014 Response to ASX Appendix 5B Query 3/11/2014 Quarterly Activities Report 31/10/2014 Quarterly Cashflow Report 23/10/2014 Initial Director's Interest Notice Naughton 23/10/2014 Initial Director's Interest Notice Featherby 22/10/2014 Notice of Annual General Meeting/Proxy Form 20/10/2014 Appendix 3B 17/10/2014 Board Appointments 10/10/2014 Appendix 3B 10/10/2014 News Release: SVL executes MOU to support Growth Strategy Page 61 of 69

64 Date Description of Announcement 22/09/2014 Appendix 3B 18/09/2014 Annual Report to shareholders 7.12 Consents Each of the parties named below: (a) (b) (c) (d) has given and has not, before the lodgement of this Prospectus with ASIC, withdrawn its written consent to be named in this Prospectus and for the inclusion of statements made by that party in the form and context in which it is named or that such statements are included; has not made, or purported to make, any statement in this Prospectus or any statement on which a statement made in this Prospectus is based, other than as specified below; to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any statements in, or omissions from, this Prospectus, other than the reference to its name in the form and context in which it appears and any statement included in this Prospectus with its consent, as specified below; and has not caused or authorised the issue of this Prospectus. Fern Street Partners Pty Limited has consented to being named as both an advisor to the Company in connection with the Rights Issue and as a co-underwriter to the Rights Issue in the Respective Proportion and to the inclusion in the Prospectus of all statements referring to it. Chris Lawrence, Texas Gold (S/F) Mr Saxon Ball and David Sutton on behalf of his associated company, Dayton Way Financial Pty Limited, have each consented to being named as a sub-underwriter to Fern Street Partners Pty Limited and to the inclusion in the Prospectus of any statements referring to each party (as applicable). DJ Carmichael Pty Limited has consented to being named as a corporate advisor and Underwriter to the Rights Issue in the Respective Proportion and to the inclusion in the Prospectus of all statements referring to it. Boardroom Pty Limited has given and, as at the date hereof, has not withdrawn, its written consent to be named as the Share Registry in the form and context in which it is named. Boardroom Pty Limited has had no involvement in the preparation of any part of the Prospectus other than being named as Share Registry to the Company Not investment advice or financial product advice The information in this Prospectus is also not financial product advice and has been prepared without taking into account your investment objectives, financial circumstances or particular needs or circumstances. The Company is not licensed to (and does not) provide financial product advice in respect of the New Shares and New Options. The information in this Prospectus does not take into account the investment objectives, financial situation or needs of you or any particular investor. Before deciding whether to apply for New Shares and New Options under the Rights Issue, you should consider whether they are a suitable investment for you in the light of your own investment objectives and financial circumstances and having regard to the merits or risks involved. You should conduct your own independent review, investigation and analysis of the securities the subject of the Rights Issue. If, after reading this Prospectus, you have any Page 62 of 69

65 questions about the Rights Issue, you should contact your stockbroker, accountant, financial adviser, taxation adviser or other independent professional adviser Taxation There may be taxation implications in relation to the Rights Issue and subscribing for New Shares and New Options. These taxation implications vary depending on your individual circumstances. You should seek and rely on your own taxation advice regarding an investment in the Company. Neither the Company nor any of its officers, employees, agents and advisers accepts any liability or responsibility with respect to the taxation consequences connected with the Rights Issue or the New Shares and New Options No cooling-off off rights No cooling-off rights apply to a subscription for New Shares and New Options under the Rights Issue. This means that you cannot withdraw your application once it has been accepted Governing law The information in this Prospectus, and dealings in the Rights and the contracts formed on acceptance of the Rights Issue pursuant to the personalised Entitlement and Acceptance Forms are governed by the law applicable in New South Wales, Australia. Each shareholder who applies for New Shares and New Options submits to the non-exclusive jurisdiction of the courts of New South Wales, Australia References to 'you' and 'your Right' In this Prospectus, references to 'you' are references to Eligible Shareholders and references to 'your Right ' (or 'your Entitlement and Acceptance Form') are references to the Right (or Entitlement and Acceptance Form) of Eligible Shareholders Disclaimer of representations No person is authorised to give any information, or to make any representation, in connection with the Rights Issue that is not contained in this Prospectus. Any information or representation that is not in this Prospectus may not be relied on as having been authorised by the Company, or its related bodies corporate, in connection with the Rights Issue. Except as required by law, and only to the extent so required, none of the Company's Group, the Directors of the Company, or any other person, warrants or guarantees the future performance of the Company or any return on any investment made pursuant to this Prospectus Withdrawal of Rights Issue The Directors reserve the right to withdraw all or part of the Rights Issue and this Prospectus at any time, subject to applicable laws, in which case the Company will refund Application Monies in relation to New Shares not already issued in accordance with the Corporations Act and without payment of interest. To the fullest extent permitted by law, you agree that any Application Monies paid by you to the Company will not entitle you to any interest against the Company and that any interest earned in respect of Application Monies will belong to the Company. Page 63 of 69

66 7.20 ASIC declarations and Listing Rule waivers The Company has not been granted any modifications or exemptions by ASIC from the Corporations Act in connection with the Rights Issue. The Company has not been granted any waivers from ASX in relation to the Rights Issue Privacy Disclosure The Company, the Underwriter and the Share Registry collect, hold and use certain personal information about each Applicant on the Entitlement and Acceptance Form for the purposes of processing the Application and administering the Applicant's security holding in the Company. The Company must maintain a public register. Information contained in the Company's register is also used for corporate communications and compliance by the Company with legal and regulatory requirements. Company and tax law requires some of the information to be collected. If you do not provided the information requested, your Application may not be able to be processed efficiently, if at all. Under the Privacy Act 1988 (Cth), you may request est access to your personal information held by or on behalf of the Company. You can request access to your personal information or obtain further information about the Company s management practices by contacting the Share Registry or the Company. If the Share Registry s record of your personal information is incorrect or out of date, it is important that you contact the Company or the Share Registry so that records can be corrected. 8. DIRECTORS AUTHORISATION TION This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors on 8 September In accordance with section 720 of the Corporations Act, each Director has consented to the lodgement of this Prospectus with ASIC. Signed for and on behalf of the Company: David Sutton Executive Chairman Dated: 9 September 2015 Page 64 of 69

67 9. INTERPRETATION AND GLOSSARY 9.1 Glossary A$ and $ Australian dollars, unless otherwise stated. Applicant An Eligible Shareholder who applies for New Shares and New Options pursuant to the Rights Issue. Application Application Money AEST ASIC ASX A valid application by an Eligible Shareholder to subscribe for New Shares and attaching free New Options under the Rights Issue. The amount payable by each Applicant under this Rights Issue, being the amount equal to the Issue Price multiplied by the total number of New Shares applied for by an Applicant under an Entitlement and Acceptance Form. Australian Eastern Standard Time. Australian Securities and Investments Commission. ASX Limited (ACN ) and the Australian Securities Exchange it operates. ASX Settlement ASX Settlement Pty Ltd (ABN ). ASX Settlement Operating Rules Board Business Day CHESS The operating rules of the settlement facility provided by ASX Settlement as amended from time to time. The Board of Directors of the Company. Business day has the same meaning as the Listing Rules. The Clearing House Electronic Subregister System of ASX. Closing Date The time and date at which the Rights Issue closes, being 5pm (AEST) on 6 October 2015, subject to the Company varying this date in accordance with the Listing Rules. Company, Silver Mines or SVL Silver Mines Limited ACN Constitution The constitution of the Company. Conrad Silvers Project The conrad silvers project described in section 2.3. Corporations Act DJ Carmichael Pty Limited Director Eligible Shareholders The Corporations Act 2001 (Cth). D J Carmichael Pty Limited ACN A director of the Company as at the date of this Prospectus. Are those holders of Shares who: (a) (b) are registered as a holder of Shares as at 5pm AEST on the Record Date; and have an address on the Company's share register in Australia or New Page 65 of 69

68 Entitlement and Acceptance Form (c) (d) Zealand; and are not located in the United States and are not US Persons and not acting for the account of or benefit of US Persons; and do not hold Shares as a result of post Record Date transactions. The entitlement and acceptance form attached to or accompanying this Prospectus, personalised for each Eligible Shareholder, which allows each Eligible Shareholder to accept the Offer. Expiry Date Exploration Licenses or ELAs The date this Prospectus expires, being a date which is 13 months after the Lodgement Date, being 9 October The exploration licenses referred to in section 2.4. Fern Street Partners Fern Street Partners Pty. Ltd. ACN Pty Ltd Ineligible Shareholder A Shareholder who does not satisfy the criteria of an Eligible Shareholder. Issue Date Issue Price Listing Rules Lodgement Date Malachite Resources Limited or MAR New Option New Securities New Share Ochre Group Holdings Limited Ochre Placement or Ochre Placement Shares Offer The date that all New Shares and New Options have been issued under the Rights Issue. $0.001 per New Share, being the price payable to subscribe for each New Share. The official listing rules of ASX as amended, varied, modified or waived from time to time. The lodgement date means 9 September 2015, being the date this Prospectus was lodged with ASIC. Malachite Resources Limited ACN An Option offered on the basis of, and under the terms of, the Rights Issue exercisable for one (1) Share in the Company at $0.003 at any time up to and including 13 October The New Shares and New Options offered under this Prospectus. A Share offered on the basis of, and under the terms of, the Rights Issue at the Issue Price. Ochre Group Holdings Limited ACN The issue, subject to Shareholder approval being obtained, of 225,000,000 Shares to Ochre Group Holdings Limited. These Shares have been offered, and will be issued with disclosure under this Prospectus. The pro rata renounceable offer of New Shares and New Options to Eligible Shareholders under the Rights Issue. Opening Date 10 September Option An option to subscribe for a Share at a prescribed exercise price. Page 66 of 69

69 Option holder Placement A person registered in the register of options of the Company as a holder of one or more Company Options. The issue of 947,000,000 shares and 428,500,000 options in the Company to the shareholders listed in section 3.6 which, subject to Shareholder approval being obtained, have been offered, and will be issued with disclosure under this Prospectus. Placement Options Placement Shares Premium Original Prospectus Prospectus Record Date Register Relevant Interest The issue of approximately 428,500,000 options in the Company to the Shareholders listed in section 3.6 which, subject to Shareholder approval being obtained, have been offered, and will be issued with disclosure under this Prospectus. The issue of approximately 947,000,000 shares in the Company to the shareholders listed in section 3.6 which, subject to Shareholder approval being obtained, have been offered, and will be issued with disclosure under this Prospectus. Any proceeds in excess of the Issue Price per New Share that may be achieved by the sales process to be conducted by the nominee appointed by the Company in relation to the Rights that would otherwise have been offered to Ineligible Shareholders were they eligible to participate in the Rights Issue. The prospectus dated 1 September 2015 and lodged with ASIC on that date, and which this Prospectus replaces. This replacement prospectus dated 9 September 2015 and lodged with ASIC on that date, and which replaces the Original Prospectus. The time and date for determining a Shareholder s right to participate in the Rights Issue, being 5pm (AEST) on Monday, 7 September The register of the Company s Shareholders. Has the same meaning as given to it in sections 608 and 609 of the Corporations Act. Respective Proportions Respective proportions means in the case of: (a) DJ Carmichael Pty Limited, 74%; (b) Fern Street Partners Pty Ltd, 26%. Rights Rights Trading Period Rights Issue The right by Eligible Shareholders to take up New Shares and attaching free New Options under this Prospectus. The period beginning at 10 am on Thursday, 3 September 2015 and ending at 4pm on Monday 28 September The pro rata renounceable rights issue of approximately 2,771,770,856 New Shares, on the basis of 4 New Shares for every 1 Share held by Eligible Shareholders on the Record Date at an issue price of $0.001 per New Share, to raise approximately $2.8 million and 1 New Option for every 2 New Shares subscribed for under the Rights Issue exercisable for 1 Share in the Company at $0.003 at any time up to and including 13 October Page 67 of 69

70 Share A fully paid ordinary share in the issued capital of the Company. Share Registry Boardroom Pty Limited ACN Shareholder A registered holder of one or more Shares in the register of members of the Company. Shortfall Shortfall Securities Side Letter Underwriters Underwriting Agreement Those New Shares and attaching free New Options for which valid Applications have not been received by the Closing Date under the Rights Issue. Means the New Shares and New Options not taken up under the Rights Issue by Eligible Shareholders. The Side Letter between DJ Carmichael Pty Limited and Fern Street Partners Pty Ltd regarding the Underwriters Agreement. DJ Carmichael Pty Limited and Fern Street Partners Pty Ltd. An underwriting agreement means: (a) the Underwriting Agreement entered into between DJ Carmichael Pty Limited and the Company on 31 August 2015; and (b) the Underwriting Agreement entered into between Fern Street Partners Pty Ltd and the Company on 31 August Underwritten Amount $2,050,000 and $721,771 to be underwritten in accordance with the terms and conditions of each Underwriting Agreement. Underwriter riter Shares Underwriter Options US Person U.S. Securities Act White Rock Minerals or WRM 25,000,000 shares issued to DJ Carmichael Pty Limited under the Rights Issue. 150,000,000 options issued to DJ Carmichael Pty Limited under the Rights Issue. Has the meaning ascribed to that term in Rule 902(k) under Regulation S under the US Securities Act. Means the US Securities Act of 1933, as amended. White Rock Minerals Limited ACN Page 68 of 69

71 CORPORATE DIRECTORY DIRECTORS David Sutton Charles Straw Nathan Featherby Douglas Finn James Naughton Non-Executive Chairman Executive Director Technical Executive Director - Corporate Non-Executive Director Non-Executive Director COMPANY SECRETARY Vaz Hovanessian REGISTERED OFFICE Level 10, 2 Bligh Street Sydney NSW 2000 Australia Phone: Fax: info@silverminesltd.com.au Website: UNDERWRITERS D.J. Carmichael Pty Limited Fern Street Partners Pty Ltd AUDITORS Moyes Yong & Co Chartered Accountants Level 7, Norwich House 6 O Connell Street Sydney NSW 2000 Tel: Fax: SHARE REGISTRY Boardroom Pty Limited Level 12, 225 George Street Sydney NSW 2000 Tel: Fax: Page 69 of 69

72 ACN ENTITLEMENT AND ACCEPTANCE FORM All correspondence to Boardroom Pty Limited GPO Box 3993 Sydney NSW 2001 Tel: (within Aust) Tel: (outside Aust) Fax: enquiries@boardroomlimited.com.au Name 1 Name 2 Name 3 Name 4 Name 5 Name 6 Entitlement No. Subregister SRN/HIN. Number of Shares held at 5pm on 7 September, 2015 Offer Closes: 5pm AEST 6 October, 2015 RENOUNCEABLE RIGHTS ISSUE OF NEW SHARES AT AN ISSUE PRICE OF $0.001 PER NEW SHARE ON THE BASIS OF FOUR (4) NEW SHARES FOR EVERY ONE (1) ORDINARY SHARE HELD, PAYABLE IN FULL UPON ACCEPTANCE OF THE INVITATION TO YOU TO PARTICIPATE IN THE RIGHTS ISSUE. IN ADDITION, FOR EVERY TWO (2) NEW SHARES APPLIED FOR THE COMPANY WILL GRANT ONE (1) FREE ATTACHING NEW OPTION EXERCISABLE AT $0.003 PER NEW OPTION ON OR BEFORE 13 OCTOBER, A Rights Acceptance If you wish to accept your FULL RIGHT please complete and return this form WITH YOUR PAYMENT FOR THE AMOUNT SHOWN BELOW. The return of this form by no later than 5pm on the Closing Date with payment will constitute acceptance of the invitation to you to participate in the Rights Issue. Your signature is only required when an alteration to your address is indicated by you over the page. Right to New Shares on the basis of 4 New Shares for every 1 Ordinary Share held Issue Price Per New Share $0.001 per New Share = Amount Payable for Full Acceptance, at $0.001 per New Share If you wish to accept PART OF YOUR RIGHT ONLY please complete this form showing in the box below the NUMBER OF NEW SHARES BEING ACCEPTED and the appropriate amount payable. Number of New Shares accepted Issue Price Per New Share Amount Enclosed $0.001 per New Share = $ C Payment Payment may only be made by BPAY or cheque. Cash will not be accepted via the mail or at the Silver Mines Limited Share Registry. Payments cannot be made at any bank. Payment Option 1 - BPAY Biller Code: Ref: To pay via BPAY please contact your participating financial institution If paying by BPAY you do not need to return the Application Form If paying by BPAY the amount of your payment received in the account divided by the issue price will be deemed to be the total number of shares you are applying for. Payment Option 2 Cheque (Record cheque details below) Telephone & Internet Banking - BPAY Contact your bank, credit union or building society to make this payment from your cheque or savings account. More info: Registered to BPAY Ltd ABN DRAWER CHEQUE NO. BSB NO. ACCOUNT NO. AMOUNT $AUD Only cheques or bank drafts in Australian dollars and drawn on a bank or financial institution in Australia will be accepted. Your cheque or bank draft must be made payable to Silver Mines Limited and crossed Not Negotiable. Please ensure that you submit the correct amount. Incorrect payments may result in your application being rejected. $ THIS FORM CONTINUES OVERLEAF