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SVL_ASX_101025_Webbs_Resource Final Page 1 of 6
To: Company Announcements Officer Australian Securities Exchange
25th October, 2010
10.2 MILLION OZ’S OF SILVER AT WEBB’S SILVER PROJECT WITH SIGNIFICANT GRADE INCREASE.
Silver Mines Limited (ASX:SVL, PLUS:SVLP) is pleased to announce that independent consultants GeoRes have completed an updated resource estimate for the Webb’s Silver Project located on the Company’s 100% owned tenement (EL5674) in north‐eastern NSW. The new estimate has incorporated over 13,000m of drilling completed by SVL since 2007, as well as surface sampling and some historical sampling from underground workings. The new model is an important advance for the project and will assist in guiding the next drilling program scheduled to begin in two weeks plus allow Scoping studies to re‐commence .
HIGHLIGHTS.
Resource estimate of;
1.23 million tonnes at 256g/t silver (8.2 oz/t Ag), for 10.19 million ounces of silver plus
1.84% zinc, 0.79% lead and 0.28% Cu,
New contained silver resource is more than double the previous estimate which was 4.6 million
ounces of silver in the inferred category.
Average grade increased by 30% from 200g/t to 256 g/t Ag. Base metal grades also increased.
Cut off grade maintained at 70 g/t Ag.
A portion of the resource is now classified as Indicated.
Resource remains open to the south and at depth.
Near surface potential exists in undrilled areas along the trend and above deeper mineralised
intersections.
Additional drilling to commence shortly to further extend the mineralised area as well as upgrade
the existing resource to a higher JORC level.
Open pit optimizations will now be done as part of the Scoping study.
Metallurgical test‐work to be conducted on drill core from upcoming program.
SVL_ASX_101025_Webbs_Resource Final Page 2 of 6
The resource is reported in Table 1.
JORC Category Tonnes Ag g/t Cu % Pb % Zn % Contained Ag (M Oz)
Indicated 167,000 360 0.32 0.55 1.96 1.93
Inferred 1,066,000 240 0.27 0.83 1.83 8.20
TOTAL 1,233,000 256 0.28 0.79 1.84 10.19
Table 1: Resource estimate for Webb’s Silver Project at 70ppm Ag lower cut‐off.
The updated resource estimate continues to demonstrate that the Webb’s project is one of the highest grade
undeveloped silver deposits in Australia. Mineralisation extends from surface and is potentially amenable to
open cut mining with possible underground mining targeting higher grade, deeper mineralisation.
The Company has been exploring the Webb’s area since 2007, and in late 2008 released an Inferred Resource estimate for the project of 720 000 tonnes at 200g/t silver, for 4.6 million ounces of contained silver. Since then an additional 6,700m of drilling in 57 holes has been conducted. The results of this drilling as well as additional data generated by Silver Mines and previous explorers have been incorporated into the updated resource estimate. The Resource is contained in four centres of mineralisation occurring along a 1.2km long trend as shown in Figure 1. The most significant of these zones are Webb’s South and Webb’s Main, Figure 2. Mineralisation at Webb’s South remains open to the south and at depth. Additional potential also exists near surface above deeper drill intersections. Mineralisation at Webb’s Main remains open to the North and at relatively shallow depths.
FUTURE PLANS. The updated Resource estimate is another important milestone in the development of the Webb’s Silver Project. Ongoing drilling is likely to upgrade the resource in terms of both tonnage and JORC classification, and supports the Company’s view that there is real potential for a mining operation to be developed at Webbs. Silver Mines is recommencing Scoping to Pre‐feasibility level studies to investigate the potential economics of a mining operation at Webbs. A major component of this study will be detailed metallurgical test‐work. Diamond drilling, which is due to commence shortly will provide samples for this work. This drilling program will also provide geotechnical data to assist with mine design proposals as well as additional assay data to increase confidence levels of the current resource. Please direct any queries regarding the content of this report to Charles Straw (CEO) on +61 2 9455 0280 or [email protected].
6,751,000 mN
6,753,000 mN
35
8,5
00
mE
35
9,0
00
mE
35
9,5
00
mE
6,751,500 mN
6,752,500 mN
6,752,000 mN
300150
meters
0
Webbs Silver North
Webbs Silver Main
Webbs Silver Adit
Webbs Silver South
Webbs Silver South ExtendedTO BE DRILLED
Nov 2010
Figure 1 - Webb's Silver Project, SVL Drilling and Key Prospects
WEBBS SOUTH – Looking East (< N) WEBBS SOUTH – Looking West (N >)
WEBBS ADIT – Looking East (< N) WEBBS ADIT – Looking West (N >)
WEBBS MAIN – Looking East (< N) WEBBS MAIN – Looking West (N >)
l .......................... 400 Metres .......................... l l ................................ 400 Metres ................................. l...............................................................................................................................................................................................
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..............................................................................................................................................................................l20
0 M
etre
sl
l12
0 M
etre
sl
l15
0 M
etre
sl
l20
0 M
etre
sl
l ........... 200 Metres ........... l l ........ 400 Metres ........ l
l ........................ 350 Metres ........................ l l ........................ 400 Metres ........................ l
SVL_ASX_101025_Webbs_Resource Final Page 5 of 6
Notes on the Resource Estimate
RESOURCE ESTIMATION METHODOLOGY
The resource estimates has been reported for Silver Mines by the Company’s consultants, GeoRes Pty Ltd
(“GeoRes”) and their results are shown in Table 1.
The resource estimate has been produced from information derived from 111 drill holes, 95 of which were drilled
by Silver Mines, all being Reverse circulation (RC). The other 18 holes are all diamond core drilled by previous
explorers. Drill hole sampling for the RC holes is based on 1m splits through the mineralised zones. Diamond
drillhole sampling methods by previous explorers is unknown. Sample intervals are typically from 1‐3m.
Surface trench and outcrop traverse sampling have also been used in the resource estimate. This includes 13 such
zones derived from work by Silver Mines as well as the results from 10 surface trenches excavated and sampled by
previous explorers, some of which Silver Mines have sampled.
The resource estimate also contains 130 samples that were collected by previous explorers at various locations
from the Webbs Main underground workings extending to 200m below surface.
All Silver Mines samples are analysed by appropriate techniques at a commercial laboratory. Appropriate QA/QC
procedures are undertaken by Silver Mines, the results of which support the integrity of the assay database. Assay
methods by previous explorers are unknown.
All Silver Mines drill holes have been located by a Registered Surveyor and all have been down hole surveyed. The
location of trench and outcrop samples is derived from DGPS. Drill holes drilled by previous explorers have been
surveyed by DGPS. Where the drill collar has been destroyed the location was derived from plans generated by
previous explorers. Downhole survey data has not been found.
The location of the underground samples is derived from underground maps and plans generated by previous
explorers and transformed into the Silver Mines grid.
All drillhole, trench, outcrop and underground sampling data have been compiled into an Access database. Silver
Mines assume responsibility for the data.
Density data are based on the modelling of 95 individual specific gravity determinations from 1m assay pulps of
waste and representative mineralised material. This data was supported by a small number of density
measurements on 20cm lengths of drill core. Density has been modelled using polynomial formulas derived from
specific gravity measurements and applied to Cu, Pb, Zn and Ag assays.
SVL_ASX_101025_Webbs_Resource Final Page 6 of 6
A series of 3D geological shapes have been interpreted by GeoRes and Silver Mines from geological and assay data.
These shapes are constrained into domains or ‘lodes’. Three dimensional grade modelling within each domain
utilised the Inverse distance squared method with a series of different search ellipses reflecting dip, strike and
plunge controls of the mineralisation and information derived from geostatistics and variography applied to the
major domains of mineralisation. Previous production has not been subtracted – for the reason that the quantum is
believed to be small, largely outside the interpreted lodes.
The classification of the resources pursuant to the JORC Code as shown in Table 1 is derived from a combination of
data spacing, the perceived continuity of the geology and grade and confidence in the various data inputs which
constitute the resource database. Accordingly GeoRes has elected to report much of the resource as Inferred with
some in the Indicated Category.
The reporting is based on a 70g/t Ag lower cut off. The cut‐off grade is intended to reflect mineralisation potentially
mineable by open pit methods, given that approximately 75% of the resource lies above 100m below surface.
Competent Person Declaration.
The information in this Document that relates to Exploration Results, Mineral Resources or Ore Reserves is based
on information compiled by Robin Rankin, who is a Member of the Australasian Institute of Mining and Metallurgy
(MAusIMM) and registered as a Chartered Professional Geologist (CPGeo). Robin Rankin is Principal Consulting
Geologist and operator of the independent geological consultancy GeoRes. He has sufficient experience which is
relevant to the style of mineralization 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’ (the JORC Code). He consents to the
inclusion in the report of the matters based on his information in the form and context in which it appears.