Silver Mines Ltd (SVL) is a silver (Ag) explorer that is primarily focused on exploring and developing its silver-rich polymetallic assets in the New England region of northern New South Wales (NSW), Australia. The company's strategy is to develop its flagship Webbs Silver Project and, in doing so, earn a near-term cash flow to support further exploration of the company's tenements

The Company sees the Webbs Silver Project as potentially being amenable to open pit mining methods making it a very attractive opportunity at the current inferred grade of over 200g/t silver. The project has also delivered positive metallurgical results for standard flotation. The focus in the short term is to continue drilling and expand the existing resource inventory and increase the level of confidence in the resource to indicated category and above, particularly at depth. Additional pre-feasibility level metallurgical testwork is also underway.

Strategy

The company's strategy is to develop its flagship Webbs Silver Project and, in doing so, earn a near-term cash flow to support further exploration of the company's tenements where demonstrated potential exists for the discovery of silver rich polymetallic mineralisation.

2012 Plan

The Company anticipates that evaluation of the Webb's project will remain the key focus for 2012. A resource update is due early in the year in will incorporate over 12,000m of new drilling completed in 2011.

It is expected the resource will continue to increase with regard to tonnage and that JORC category will be upgraded. Mineralisation remains open at depth in many locations.

Diamond drilling completed will provide added confidence to the resource with improved geological and structural understanding. Diamond core will also be used for metallurgical testwork and in the acquisition of geotechnical data. Metallurgical testwork to pre-feasibility level is expected to be completed in the first half of 2012 and will lead into a pre-feasibility study for the project.

The Company is also planning additional drilling at Webbs which will focus on testing depth extensions to zones which offer potential to substantially increase tonnages of high grade material possibly amenable to underground mining. Some of the best drill intersections at Webbs remain to be tested down dip/plunge where intersections with true widths of 5-10m averaging better than 500g/t Ag are present.

Additional drilling is also planned at several targets within EL5674