DRILL INTERSECTIONS ON REGIONAL TARGETS AND QUARTERLY ACTIVITY AND CASH FLOW REPORT
HIGHLIGHTS
- Shallow RC drilling intersects sulphide rich lodes with elevated silver and base metals.
- Higher grade intersections include:
- 1m @ 460g/t Ag, 0.2% Cu, 9.6% Pb and 3.7% Zn from 24m in hole HZRC010;
- 1m @ 251g/t Ag, 0.9% Cu, 3.7% Pb and 2.4% Zn from 37m in Hole MMRC003;
- 1m @ 200g/t Ag, 0.02% Cu, 5.9% Pb and 7.3% Zn from 48m in Hole EQRC004; and
- 1m @ 162g/t Ag, 0.1% Cu, 2.8% Pb and 2.4% Zn from 28m in hole TORC001.
- Mineralised lodes are associated with disseminated zones and locally massive veins of pyrite/pyrrhotite, sphalerite, galena with local arsenopyrite and chalcopyrite.
- Silica-sericite alteration and sulphides observed over downhole widths from 5m to plus 25m.
- Geology and mineralisation similar styles to Webbs.
- Ongoing exploration likely to add to existing target list.
Silver Mines is pleased to announce that shallow reverse circulation (RC) drilling its 100% owned Mole River project in northern NSW has intersected numerous zones of silver -base metal mineralisation at several prospects.
The drill targets have been delineated from geochemical sampling, geological mapping and geophysics. Many targets occur proximal to old workings, most of which have never been drill tested.
Higher grade, silver rich mineralisation is hosted in 1-4m wide, single or multiple lode zones with narrow sulphide +/- quartz veins, commonly enveloped by quartz-sericite altered host rocks with disseminated sulphides. The mineralised zones are structurally controlled and occur in a variety of host rocks.
Many drill intersections remain open and many other targets in the area require additional exploration.
CEO, Charles Straw commented "We consider these results to be highly encouraging given this program comprises first pass shallow reconnaissance drilling at prospects that have never been drilled previously. The style of mineralisation intersected certainly supports our view for potential Webbs style deposits in this area."
BACKGROUND
Exploration Licenses 6771and 6114 are located approximately 30-40km north east of the Webb's Silver project and are part of a contiguous group of tenements known as the Mole Project. The project area hosts numerous documented metalliferous occurrences which occur along a broad northwest trend approximately 11km long and 2km wide (see Figure 1). The geology of the area is dominated by Permian aged sediments and local granite which are intruded by the Triassic aged Mole Granite to the southwest. Silver Mines believes this area has excellent potential to host Webb's style silver rich polymetallic deposits.
Prior to the current drilling, exploration conducted on EL 6771 and EL 6114 has included rock chip and soil sampling, geological mapping, Induced Polarisation (IP) surveys and aeromagnetic interpretation.
Rock chip and soils sampling conducted by Silver Mines and previous explorers has delineated a broad district scale zone of highly anomalous geochemistry. Many rock chip samples and local soil sampling programs have returned anomalous to highly elevated levels of Ag, Pb, Zn, and Cu in common association with As and locally elevated Sb, Sn, Bi and W. The geochemical signature and associated geology is analogous to the Webbs Silver deposit and supports SVL's view of the silver potential in the region.
RECENT DRILLING RESULTS
Silver Mines have recently completed reconnaissance RC drilling targeting the near surface expression of geochemical and geophysical anomalies commonly near old workings. Drilling has been undertaken at the Burra-Ecquador, Mount Morgan, Torny and Hazeldean and Hazeldean West prospects (see Figure 1). The program comprised 31 holes and a total of 1,667m. Hole details are presented in Table 1. Assay results are reported in Table 2.
Higher grades of mineralisation intersected are present as massive-semi massive sulphide +/- quartz veins in altered country rock . These lode zones generally around 1-4m wide and carry up to 30% total sulphides as estimated from RC drill chips. Dominant sulphide minerals are generally pyrite-pyrrhotite-sphalerite-galena with local arsenopyrite, chalcopyrite and cassiterite. Rare stannite and tetrahedrite were noted but require confirmation. These lodes are generally hosted in fractures such as cleavage, joints, breccia fill associated with shear zones and faults, sometimes at lithological contacts.
The sulphide rich structures are commonly enveloped by quartz-sericite+/- chlorite altered wallrock with accompanying veinlets and disseminations of sulphides. These broader zones are observed over downhole widths of 10-30m and generally defined by elevated zinc values +/- lead. Within these broader zones, multiple 'higher grade' lodes usually occur. The altered wall rocks are either granites and porphyry at Burra-Ecqaudor and the southern end of the Torny or inter-bedded metasediments. These zones often contain disseminated sulphides.
Sulphide mineralisation and metal associations are similar for most prospects. However, the Mount Morgan prospect is enriched in tin and arsenic compared to the others.
Silver Mines believes the style of mineralisation in the area is similar to that occurring at the Webbs Silver deposit. That is higher grade silver-base metal lodes are enveloped by lower grade altered and mineralized country rock containing a geochemical halo of Zn-Pb and Ag.
To view the map associated with this press release, please visit the following link:
http://media3.marketwire.com/docs/silvmap1.pdf
FUTURE WORK
Silver Mines is highly encouraged by the results of this first pass reconnaissance drilling program. The geological model for potential mineralisation in this area is developing and favors high grade shoots associated with high levels of sulphide and strong alteration probably best developed at structural and/or lithological intersections.
Current results will be assessed in detail. However, zones that require immediate follow-up are evident especially where mineralised drill intersections offer potential for extensions. In these areas further sampling and mapping can quickly establish additional near surface drill targets.
The style and type of the sulphide mineralisation intersected in the drilling is amenable to exploration by geophysical methods such as electro-magnetics and IP which could greatly assist in sub-surface drill targeting. IP targets already exist and more IP is planned.
Additional target generation work is required throughout many areas of the prospective corridor and surrounds. This work will consist of grid based soil and rock-chip geochemical sampling and associated mapping especially along possible extensions of currently identified trends. Geophysics will assist in drill targeting.
Silver Mines are sponsoring an Honours study with the University of New South Wales to assist in documenting the mineralisation and alteration styles in the project area. This work should assist future exploration.
The Company looks forward to continuing exploration success at the Mole project and will update shareholders as the results of current and future work become available.
Please direct any queries regarding the content of this report to Charles Straw (CEO) on +61 2 9253 0900 or cstraw@silverminesltd.com.au.
Competent Person Declaration
The information in this Document that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr David Hobby, consulting Chief Geologist to SVL, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Hobby has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration' for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Hobby consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Hole ID East (MGA) North (MGA) Dip Azimuth Hole Depth Prospect
(MGA) (m)
-----------------------------------------------------------------------------------------------
EQRC001 386657 6765196 -60 51 64 Burra
-----------------------------------------------------------------------------------------------
EQRC002 386649 6765203 -60 51 60 Burra
-----------------------------------------------------------------------------------------------
EQRC003 386641 6765229 -60 56 60 Burra
-----------------------------------------------------------------------------------------------
EQRC004 386553 6765264 -60 31 63 Ecquador
-----------------------------------------------------------------------------------------------
EQRC005 386530 6765272 -60 314 60 Ecquador
-----------------------------------------------------------------------------------------------
EQRC006 386689 6765182 -60 51 51 Burra
-----------------------------------------------------------------------------------------------
HZRC001 383889 6770847 -60 237 40 Hazeldean
-----------------------------------------------------------------------------------------------
HZRC002 383895 6770808 -60 254 58 Hazeldean
-----------------------------------------------------------------------------------------------
HZRC003 383936 6770676 -60 267 70 Hazeldean
-----------------------------------------------------------------------------------------------
HZRC004 383899 6770699 -65 267 57 Hazeldean
-----------------------------------------------------------------------------------------------
HZRC005 383872 6770708 -60 270 58 Hazeldean
-----------------------------------------------------------------------------------------------
HZRC006 383940 6770619 -60 239 60 Hazeldean
-----------------------------------------------------------------------------------------------
HZRC007 383780 6770995 -60 102 60 Hazeldean
-----------------------------------------------------------------------------------------------
HZRC008 383878 6770885 -60 270 54 Hazeldean
-----------------------------------------------------------------------------------------------
HZRC009 383818 6770969 -60 267 57 Hazeldean
-----------------------------------------------------------------------------------------------
HZRC010 383384 6771193 -60 90 57 Hazeldean West
-----------------------------------------------------------------------------------------------
HZRC011 383406 6771192 -60 90 58 Hazeldean West
-----------------------------------------------------------------------------------------------
HZRC012 383420 6771254 -60 90 58 Hazeldean West
-----------------------------------------------------------------------------------------------
MMRC001 385050 6767608 -60 267 60 Mount Morgan
-----------------------------------------------------------------------------------------------
MMRC002 385022 6767598 -60 272 60 Mount Morgan
-----------------------------------------------------------------------------------------------
MMRC003 385053 6767557 -60 270 55 Mount Morgan
-----------------------------------------------------------------------------------------------
MMRC004 385058 6767507 -60 272 40 Mount Morgan
-----------------------------------------------------------------------------------------------
MMRC005 385054 6767472 -60 90 28 Mount Morgan
-----------------------------------------------------------------------------------------------
MMRC006 385049 6767400 -60 90 37 Mount Morgan
-----------------------------------------------------------------------------------------------
TORC001 384182 6766895 -60 271 61 Torny
-----------------------------------------------------------------------------------------------
TORC002 384195 6766935 -60 271 49 Torny
-----------------------------------------------------------------------------------------------
TORC003 384167 6766950 -60 89 45 Torny
-----------------------------------------------------------------------------------------------
TORC004 384188 6766974 -60 270 40 Torny
-----------------------------------------------------------------------------------------------
TORC005 384188 6767072 -60 91 40 Torny
-----------------------------------------------------------------------------------------------
TORC006 384189 6767159 -60 109 51 Torny
-----------------------------------------------------------------------------------------------
TORC007 384176 6767222 -60 82 56 Torny
-----------------------------------------------------------------------------------------------
Table 1: Drill hole location details.
----------------------------------------------------------------------------------------------------
HOLE ID from to Int# Ag Cu Pb Zn Sn As
(m) (m) (m) (g/t) (%) (%) (%) (%) (%)
----------------------------------------------------------------------------------------------------
EQRC001 2 12 10 3 0.3
EQRC001 16 17 1 20 0.6
EQRC001 24 27 3 6 0.8
----------------------------------------------------------------------------------------------------
EQRC002 0 12 12 1.4 0.3
EQRC002 25 26 1 8 2.0 0.8
----------------------------------------------------------------------------------------------------
EQRC003 3 21 18 4 0.2
EQRC003 3 4 1 16 0.09 0.06
EQRC003 12 13 1 10 0.9
----------------------------------------------------------------------------------------------------
EQRC004 7 8 1 18 0.4 0.8
EQRC004 30 52 22 20 0.5 1
EQRC004 30 31 1 41 0.2 0.2 4.6 0.3
EQRC004 37 38 1 18 0.6 0.1
EQRC004 44 52 8 46 1.3 1.9
EQRC004 48 49 1 199 5.9 7.3
----------------------------------------------------------------------------------------------------
EQRC005 1 9 8 <1 0.2
EQRC005 20 24 4 21 0.5 0.8
----------------------------------------------------------------------------------------------------
EQRC006 0 11 11 2 0.8
EQRC006 8 10 2 6 3.4
----------------------------------------------------------------------------------------------------
TORC001 5 34 29 7 0.5
TORC001 19 23 4 37 0.5 2.2
TORC001 21 22 1 88 0.1 1.3 6.9 0.5
----------------------------------------------------------------------------------------------------
TORC002 28 29 1 162 0.1 2.8 2.4 0.2
----------------------------------------------------------------------------------------------------
TORC003 13 25 12 3 0.2
TORC003 19 20 1 26 0.5 0.5
----------------------------------------------------------------------------------------------------
TORC004 3 21 18 8 0.3
TORC004 15 18 3 38 0.08 0.1 0.7 2.4
----------------------------------------------------------------------------------------------------
TORC005 12 16 4 28 0.3 0.7
----------------------------------------------------------------------------------------------------
TORC006 NSA
----------------------------------------------------------------------------------------------------
TORC007 16 28 12 20 0.2
TORC007 16 20 4 57 0.1 0.6 0.06 0.1
TORC007 18 19 1 119 0.6 1.1 0.2 0.1
----------------------------------------------------------------------------------------------------
HZRC001 7 15 8 19 0.3 0.1
----------------------------------------------------------------------------------------------------
HZRC002 4 22 18 12 0.2 0.2
HZRC002 5 6 1 37 0.3 0.1
HZRC002 17 18 1 127 1.8 1.2
HZRC002 46 48 2 42 0.6 0.6
------------------------------------------------------------------------------------------------------
Table 2: Assay results.
------------------------------------------------------------------------------------------------------
HOLE ID from to Int# Ag Cu Pb Zn Sn As
(m) (m) (m) (g/t) (%) (%) (%) (%) (%)
------------------------------------------------------------------------------------------------------
HZRC003 11 15 4 64 0.5 0.1
HZRC003 11 12 1 147 1.4 0.1
------------------------------------------------------------------------------------------------------
HZRC004 2 17 15 16 0.2 0.1
HZRC004 6 9 3 25 0.4
HZRC004 14 15 1 24 0.2 0.1
------------------------------------------------------------------------------------------------------
HZRC005 21 22 1 10 0.2 0.1
------------------------------------------------------------------------------------------------------
HZRC006 10 16 6 22 0.4 0.08
HZRC006 13 14 1 41 0.5
HZRC006 26 44 18 0.2
HZRC006 40 44 4 22 0.3 0.5
------------------------------------------------------------------------------------------------------
HZRC007 9 33 24 6 0.2
HZRC007 22 32 10 12 0.1 0.2
HZRC007 30 31 1 23 0.2 0.2
------------------------------------------------------------------------------------------------------
HZRC008 NSA
------------------------------------------------------------------------------------------------------
HZRC009 29 35 6 16 0.2 0.3 0.5
HZRC009 34 35 1 23 0.5 0.8
------------------------------------------------------------------------------------------------------
HZRC010 22 25 3 162 3.4 1.6
HZRC010 24 25 1 460 0.2 9.6 3.7 0.1
------------------------------------------------------------------------------------------------------
HZRC011 7 8 1 30 0.4
------------------------------------------------------------------------------------------------------
HZRC012 NSA
------------------------------------------------------------------------------------------------------
MMRC001 24 36 12 3 0.8
MMRC001 32 34 2 12 0.2 3.7 0.4
------------------------------------------------------------------------------------------------------
MMRC002 NSA
------------------------------------------------------------------------------------------------------
MMRC003 36 39 3 104 0.4 1.6 2.2 0.1 5.5
MMRC003 37 38 1 251 0.9 3.7 2.4 0.2 15.4
------------------------------------------------------------------------------------------------------
MMRC004 25 28 3 21 0.06 0.3 1.5
------------------------------------------------------------------------------------------------------
MMRC005 6 23 17 3 0.3
MMRC005 15 17 2 17 0.1 0.1 0.7 0.3
------------------------------------------------------------------------------------------------------
MMRC006 19 29 10 7 0.4
MMRC006 24 25 1 56 0.2 0.7 2.3 0.2 4.3
------------------------------------------------------------------------------------------------------
Table 2 continued.
Notes for Table 1.
All easting and northing data are located by handheld GPS which has an accuracy of
about +/- 5m. Units are in metres relative to the MGA grid. Dip and azimuth data is
predominantly derived from handheld compass and clinometers. Units are in degrees.
Notes for Table 2.
Samples sent for assay are derived from 'spearing' 1m RC samples. Samples weighing 2-3kg are dispatched by courier to ALS Chemex in Brisbane. Samples are dried then pulverised to 80%p 75 microns. Routine assaying is conducted by ALS Method ICP41. This is an Aqua Regia digest with an ICP-AES finish. When elements exceed upper detections limits of 100ppm for Ag and 1% for Cu, Pb and Zn they are reanalysed by and appropriate ore grade acid technique (ALS method OG46), and in the case of silver, occasionally using a gravimetric technique. Insertion of appropriate QA/QC samples ensures that laboratory accuracy and precision are monitored. Some lower grade zinc and lead assays are based on Niton Handheld XRF results taken on the 1m split sample from the drilling rig which weighs around 2kg. Readers should be aware that Niton Handheld XRF results should be viewed with caution and may differ from actual assays reported by ALS. However, SVL has conducted extensive testwork with the Niton XRF on all drilling programs and is confident yet cautious that it provides a very sound preliminary indication of target metal content.
#Downhole intersections are NOT true widths due to the geometry of the lodes and angle of intersection of the drill hole. True widths are estimated to be half to one third of downhole interval reported.
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Name of entity
------------------------------------------------------------------------------------------------------
SILVER MINES LIMITED
------------------------------------------------------------------------------------------------------
ABN Quarter ended ("current quarter")
---------------------------------- ----------------------------------
45 107 452 942 31 December 2012
---------------------------------- ----------------------------------
Consolidated statement of cash flows --------------------------------------------------
Current quarter Year to date (6
Cash flows related to operating activities $A'000 months)
$A'000
--------------------------------------------------
1.1 Receipts from product sales and related
debtors
1.2 Payments for (a) exploration & evaluation (498) (889)
(b) development
(c) production
(d) administration (252) (562)
1.3 Dividends received
1.4 Interest and other items of a similar nature 8 11
received
1.5 Interest and other costs of finance paid (2) (3)
1.6 Income taxes paid
1.7 Other (provide details if material) Pre paid
drilling
--------------------------------------------------
(744) (1,443)
Net Operating Cash Flows
--------------------------------------------------------------------------------------------------------
Cash flows related to investing activities
1.8 Payment for purchases of: (a) prospects
(b) equity investments - -
(c) other fixed assets (31) (34)
1.9 Proceeds from sale of: (a) prospects - -
(b) equity investments - -
(c) other fixed assets - -
1.10 Loans to other entities
1.11 Loans repaid by other entities
1.12 Other (provide details if material) --------------------------------------------------
(31) (34)
Net investing cash flows
--------------------------------------------------
1.13 Total operating and investing cash flows (775) (1,477)
(carried forward)
--------------------------------------------------------------------------------------------------------
1.13 Total operating and investing cash flows (775) (1,477)
(brought forward)
--------------------------------------------------------------------------------------------------------
Cash flows related to financing activities
1.14 Proceeds from issues of shares, options, etc. - 830
1.15 Proceeds from sale of forfeited shares
1.16 Proceeds from borrowings
1.17 Repayment of borrowings
1.18 Dividends paid
1.19 Other (provide details if material)
--------------------------------------------------
Net financing cash flows - 830
--------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash held (775) (647)
1.20 Cash at beginning of quarter/year to date 928 800
1.21 Exchange rate adjustments to item 1.20
--------------------------------------------------
1.22 Cash at end of quarter 153 153
--------------------------------------------------------------------------------------------------------
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
---------------
Current quarter
$A'000
---------------
1.23 Aggregate amount of payments to the parties included in item 1.2 21
---------------
1.24 Aggregate amount of loans to the parties included in item 1.10
----------------------------------------------------------------------------------------------------------
1.25 Explanation necessary for an understanding of the transactions
-------------------------------------------------------------------------------------------------
Director Fees
-------------------------------------------------------------------------------------------------
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated
assets and liabilities but did not involve cash flows
-------------------------------------------------------------------------------------------------
-
-------------------------------------------------------------------------------------------------
2.2 Details of outlays made by other entities to establish or increase their share in projects in
which the reporting entity has an interest
-------------------------------------------------------------------------------------------------
-
-------------------------------------------------------------------------------------------------
Financing facilities available
Add notes as necessary for an understanding of the position.
---------------------------------------
Amount available Amount used
$A'000 $A'000
---------------------------------------
3.1 Loan facilities
---------------------------------------
3.2 Credit standby arrangements
--------------------------------------------------------------------------------------------------------
Estimated cash outflows for next quarter -----------------------------------
$A'000
-----------------------------------
4.1 Exploration and evaluation (Note 1) -
-----------------------------------
4.2 Development
-----------------------------------
4.3 Production
-----------------------------------
4.4 Administration (Note 2) 100
---------------------------------------------------------------------------------------------------------
Total 100
---------------------------------------------------------------------------------------------------------
Note 1 - Future exploration as set out in the December 2012 Quarterly Activities Report is subject to
future fund raising. Silver Mines also has already prepaid for almost 5,000m of future RC
drilling. These metres will be used for upcoming RC drilling at Webbs subject to availability.
Note 2 - Administration costs have been cut pending future fund raising.
Reconciliation of cash
-------------------------------------------------
Reconciliation of cash at the end of the quarter (as Current quarter Previous quarter
shown in the consolidated statement of cash flows) to $A'000 $A'000
the related items in the accounts is as follows.
---------------------------------------------------------------------------------------------------------
5.1 Cash on hand and at bank 153 16
--------------------------------------------------
5.2 Deposits at call - 912
--------------------------------------------------
5.3 Bank overdraft - -
--------------------------------------------------
5.4 Other (provide details) - -
---------------------------------------------------------------------------------------------------------
Total: cash at end of quarter (item 1.22) 153 928
---------------------------------------------------------------------------------------------------------
Changes in interests in mining tenements
-----------------------------------------------------------------------
Tenement Nature of interest Interest Interest
reference (note (2)) at at end of
beginning quarter
of quarter
-----------------------------------------------------------------------
6.1 Interests in mining
tenements relinquished,
reduced or lapsed
-----------------------------------------------------------------------
6.2 Interests in mining
tenements acquired or
increased
-----------------------------------------------------------------------
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and
dates.
Total number Number quoted Issue price per Amount paid up per
security (see security (see note
note 3) (cents) 3) (cents)
---------------------------------------------------------------------------------------------------------
7.1 Preference
+securities
(description)
------------------------------------------------------------------------------
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital, buy-
backs,
redemptions
---------------------------------------------------------------------------------------------------------
7.3 +Ordinary 165,887,091 165,887,091
securities
------------------------------------------------------------------------------
7.4 Changes during
quarter
(a) Increases
through issues 1,890,000 1,890,000 6 cents 6 cents
(b) Decreases
through returns
of capital, buy-
backs
---------------------------------------------------------------------------------------------------------
7.5 +Convertible
debt securities
(description)
------------------------------------------------------------------------------
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through
securities
matured,
converted
---------------------------------------------------------------------------------------------------------
7.7 Options Exercise price Expiry date
(description and
conversion 14,140,343 - Unlisted Options Expiring 13 Nov
factor) exercisable at 2013
10 cents per
share
2,000,000 - Unlisted Options, Expiry 27 August
exercise price 40 2013. Vest - 27
cents, Expiry 27 August 2011
August 2013.
Vest - 27 August
2011
8,500,000 - Unlisted Employee Expiry Date 23
Options, exercise December 2015
price 50 cents,
Unlisted
5,000,000
Performance
Rights
------------------------------------------------------------------------------
7.8 Issued during 5,000,000 Performance
quarter Rights
------------------------------------------------------------------------------
7.9 Exercised during
quarter
------------------------------------------------------------------------------
7.10 Expired during 13,609,882 13,609,882 Listed Options Expiring 31 October
quarter exercisable at 2012
35 cents per
share
---------------------------------------------------------------------------------------------------------
7.11 Debentures
(totals only)
------------------------------------------------------------------
7.12 Unsecured notes (totals only)
----------------------------------------
Compliance statement
1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: ............................................................Date: 31 January 2013...............
(Company secretary)
Print name: ...Kevin Lynn......................................................
Notes
1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage
interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
== == == == ==
31st January 2013
To: The Company Announcement Officer
ACTIVITIES REPORT FOR THE QUARTER ENDED 31ST DECEMBER 2013
HIGHLIGHTS
- Approval received from the NSW Department of Trade and Investment - Resources and Energy Division (DRE) to re-commence drilling at Webbs Silver Project.
- 1,667m of drilling in 31 holes was completed at six prospects in the Mole Project area located 30- 40km north of Webbs. Several higher grade intersections were achieved such as 1m @ 460g/t Ag, 0.2% Cu, 9.6% Pb and 3.7% Zn.
WEBBS SILVER PROJECT
EL 5674
Silver Mines is pleased to advise that approval has been received from the NSW Department of Trade and Investment - Resources and Energy Division (DRE) to re-commence drilling at Webbs.
This approval has been a long time coming and has unfortunately precluded any drilling at the Webbs Silver Project for much of 2012. The approvals process has been protracted due to NSW State Government delays and has caused significant frustration for the Company during the year. However, the outcome is very positive and Silver Mines is confident that the planned drilling programs can now be implemented as designed so that the potential of Webbs can be realised.
Pending the availability of Silver Mines' contracted drill rig, drilling is expected to commence at Webbs in late February 2013. Drilling will be targeted at depth extensions beneath, and along strike from the current resource, where the deposit remains open at many locations. Drilling will also be undertaken to potentially extend some near surface mineralisation. Silver Mines' key focus at Webbs is to grow the current high grade resource.
Additional exploration will take place along the strike extensions of the Webbs trend which has now been traced for over 3km along strike. Closer spaced mapping and sampling as well as ground based geophysics are proposed in order to delineate drill targets.
Silver Mines has already prepaid for almost 5,000m of future RC drilling. These metres will be used for upcoming RC drilling at Webbs, subject to availability.
MOLE PROJECT
EL 6771 - EL 6114
During the quarter Silver Mines completed 1,667m in 31 shallow RC holes on SVL's 100% owned Mole project in northern NSW. Many holes intersected numerous zones of silver -base metal mineralisation at several prospects.
Exploration Licenses 6771 and 6114 are located approximately 30-40km north east of the Webb's Silver project and are part of a contiguous group of tenements known as the Mole Project. The project area hosts numerous documented metalliferous occurrences which occur along a broad northwest trend approximately 11km long and 2km wide (See Figure 1).
The drill targets were delineated from geochemical sampling, geological mapping and geophysics. Many targets occur proximal to old workings, most of which have never been drill tested.
Shallow drilling was undertaken at relatively close spacings along and across strike.
Higher grade, silver rich mineralisation is hosted in 1-4m wide, single or multiple lode zones with narrow sulphide +/- quartz veins, commonly enveloped by quartz-sericite altered host rocks with disseminated sulphides. The mineralised zones are structurally controlled.
Higher grade intersections include:
- 1m @ 460g/t Ag, 0.2% Cu, 9.6% Pb and 3.7% Zn from 24m in hole HZRC010;
- 1m @ 251g/t Ag, 0.9% Cu, 3.7% Pb and 2.4% Zn from 37m in Hole MMRC003; and
- 1m @ 200g/t Ag, 0.02% Cu, 5.9% Pb and 7.3% Zn from 48m in Hole EQRC004.
Many drill intersections remain open and many other targets in the area require additional exploration.
The style of mineralisation intersected in the drilling is similar to that occurring at the Webbs Silver deposit. That is higher grade silver-base metal lodes are enveloped by lower grade altered and mineralized country rock.
A full description of the results of this drilling program will be the subject of a separate announcement to be released 1 February, 2013.
METALLURGY
Some on-going testwork was completed during the quarter. This testwork was aimed at flotation optimisation and completion of testwork investigating the doré recovery circuit. Data obtained will be utilised in conceptual design work as part of the processing study,
PLANNED ACTIVITIES FOR THE MARCH QUARTER 2013
- The Webbs Silver Project will be the focus of renewed activity for Silver Mines in the upcoming Quarter with an emphasis on re-commencing the planned drilling program in order to grow the resource.
- A detailed assessment of the exploration drilling results from the Mole project will be completed. Additional follow-up work will be designed and planned and budgeted.
- The Conceptual/Scoping level metallurgy study will be completed.
Please direct any queries regarding the content of this report to Charles Straw (CEO) on +61 2 9253 0900 or cstraw@silverminesltd.com.au.
Competent Person Declaration
The information in this Document that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr David Hobby, consulting Chief Geologist to SVL, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Hobby has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Hobby consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
To view the map associated with this press release, please visit the following link:
http://media3.marketwire.com/docs/silvmap1.pdf
Contact
Silver Mines
www.silverminesltd.com.au
