Silver Mines : Increasing Gold and Zinc in Drilling at Bowdens Silver

Level 11, 52 Phillip St

Sydney NSW 2000

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28th March 2022

For personal use only

Company Announcement Officer ASX Limited

Exchange Centre 20 Bridge Street SYDNEY NSW 2000

Increasing Gold and Zinc in Drilling at Bowdens Silver

HIGHLIGHTS:

• • Visible gold intersected for the first time ever at Bowdens.

• • Greater tenor of gold in the system as drilling moves south and east at Bundarra.

• • The Bundarra Zone continues to deliver high-grade mineralisation within both quartz-sulphide and semi massive sulphide vein styles.

• • BD22004 (partial results) extends known mineralisation greater than 250 metres south at Bundarra.

Latest Results Include:

• • BD21044 - 116 metres @ 0.31 g/t gold from 223 metres including;

  • o 3.0 metres @ 327 g/t silver equivalent (25 g/t silver, 1.43% zinc, 0.91% lead and 2.44 g/t gold) from 280 metres (refer to page 4 for additional gold intercepts).

• • BD21048 - 1.8 metres @ 1,181 g/t silver equivalent (129 g/t silver, 9.46% zinc, 8.36% lead, 0.16% copper and 3.56 g/t gold) from 225 metres.

• • BD21039 - 10 metres @ 285 g/t silver equivalent (149 g/t silver, 2.18% zinc, 0.66% lead) from 168 metres.

• • BD21041 - 1.1 metres @ 613 g/t silver equivalent (53 g/t silver, 10.05% zinc, 1.10% lead and 0.18 g/t gold) from 292.2 metres.

• • BD21044 - 4.0 metres @ 280 g/t silver equivalent (29 g/t silver, 0.72% zinc, 0.70% lead and 2.38 g/t gold) from 193 metres.

• • BD21045 - 2.5 metres @ 339 g/t silver equivalent (49 g/t silver, 3.51% zinc, 2.43% lead and 0.37 g/t gold) from 255 metres.

• • BD22004 - 2.0 metres @ 231 g/t silver equivalent (23 g/t silver, 3.62% zinc, 0.44% lead and 0.12 g/t gold) from 490 metres, and

• • BD22004 - 3.0 metres @ 221 g/t silver equivalent (15 g/t silver, 3.86% zinc, 0.15% lead) from 496 metres.

Silver Mines Limited

ABN: 45 107 452 942

Page 1

For personal use only

Underground Scoping Study

• • Drilling nearing completion to deliver maiden underground Mineral Resource estimation as part of the initial Scoping Study of underground mining scenarios.

• • Resource estimate to be finalised in 2nd quarter 2022.

Introduction

Silver Mines Limited (ASX:SVL) ("Silver Mines" or "the Company") is pleased to announce recent assay results from the underground resource drilling program at the Bowdens Silver Project located near Mudgee in New South Wales.

Diamond drilling has continued to test mineralised zones for potential underground mining scenarios at the Bowdens Silver Deposit, with a recent focus on the Bundarra Zone. The Bundarra Zone is dominated by wide zones of high-grade zinc and lead mineralised lenses associated with gold, silver and more recently copper. Targets (Aegean, Northwest and Bundarra Zones) are situated below the bulk-tonnage open-pit Ore Reserve of the Bowdens Deposit. Results have been received for holes BD21039, BD21041, BD21042, BD21043, BD21044, BD21045, BD21046, BD21048 and BD22004 (refer toFigure 1). The resource drilling has focused on the Aegean and Northwest Zones through 2021, with recent drilling being focused on extending the Bundarra Zone south, west and east, as well as testing for greater economic gold potential at depth below the current open-pit Ore Reserve.

Figure 1. Reported drillhole locations and underground mining targets at the Bowdens Silver Project.

Silver Mines Limited

ABN: 45 107 452 942

Page 2

Bundarra Zone

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The Bundarra Zone is a series of base metal (zinc and lead) dominant, semi massive to massive sulphide lenses below the current silver-zinc-lead Ore Reserve. Drill holes testing the extent of mineralisation beneath a dacite intrusion have shown that mineralisation is open along major structures (Gully and Eastern Faults). The Bowdens System appears to be zoned around the dacite intrusion with silver (zinc and lead) deposited above and gold (silver, zinc, lead & copper) deposited below the dacite.

New drill results from BD22004 (partial results) establish the Bundarra Zone to have a strike extent of 500 metres north to south while results from BD21044 establish a width of 300 metres east to west while continuing down dip to the west for at least 475 metres to BD20001 (refer release dated 8th April 2020). The thickness ranges from a few metres to >20 metres.

BD21048 was drilled to test for western extensions from BD21042 and results from the upper Bundarra lens have established at least a 75-metre continuation of high-grade mineralisation down dip. Further assay results are pending in this hole, with the remainder of the hole intersecting mineralisation of quartz-sulphide veins.

Significant intercept includes:

• • 1.8 metres @ 1,181 g/t silver equivalent from 225 metres(Figure 2).

Figure 2. Intercept from BD21048 at 225 metres of quartz-sulphide mineralisation.

BD21039 and BD21043 were testing eastern extensions to BD17011. Both holes intercepted mineralisation above the Bundarra Zone within the current Ore Reserve, as well as continuous mineralisation below the dacite as part of the lower Bundarra lenses.

Silver Mines Limited

ABN: 45 107 452 942

Page 3

For personal use only

Figure 3. Bowdens Silver Project Long Section looking east.

Gold Zone

Gold intercepted in BD21044 in the east of the Bundarra Zone, in addition to results from BD21007 90 metres to the west (refer release dated 27th July 2021), is significant in terms of extent and grade within the Bowdens Deposit(Figure 4). Considering gold only, with a 0.1 g/t cut-off (10 metre internal dilution) and individual assays up to 6.75 g/t gold, intersections in BD21044 can be distinguished as:

• • 34 metres @ 0.16 g/t gold from 114 metres,

• • 4 metres @ 0.31 g/t gold from 175 metres,

• • 17 metres @ 0.67 g/t gold from 192 metres, including

  • o 4.0 metres @ 2.38 g/t gold,

• • 116 metres @ 0.31 g/t gold from 223 metres, including

  • o 1.0 metres @ 1.86 g/t gold from 256 metres &,

  • o 2.0 metres @ 1.81 g/t gold from 262 metres &,

  • o 3.0 metres @ 2.44 g/t gold from 280 metres,

• • 5.5 metres @ 0.65 g/t gold from 352.5 metres, including

  • o 2.0 metres @ 1.62 g/t gold from 355 metres, and

• • 2.2 metres @ 0.32 g/t gold from 389 metres.

Importantly, visible gold has been identified for the first time ever at the Bowdens Deposit at depth in BD22004(Figure 5). If the continuity of these results is established from ongoing drilling, this presents an excellent gold exploration target. Fire assays to date indicate a degree of coarse gold. Results from BD21044 provide significant evidence for potentially economic gold mineralisation, both associated with the Bundarra Zone but also as a separate mineralisation style associated with silver at depth and to the east. A substantial intercept of silver and gold from BD21018 (refer release dated 26th October 2021 andFigure 3)is approximately 575 metres directly south and up plunge of BD21044 with no other drilling present at least within a window of 200 metres.

Silver Mines Limited

ABN: 45 107 452 942

Page 4

For personal use only

Figure 4. Cross section showing significant gold in BD21044.

Figure 5. Visible gold. Sheeted calcite-sulphide-gold vein in HQ3 core (left) with a 20x magnification hand lens view (right), 405m in BD22004.

Silver Mines Limited

ABN: 45 107 452 942

Page 5