David Hobby – Silver Mines’ New England Strategy

& Webb’s Silver Deposit

David Hobby has been involved in the minerals industry for well over 20 years, having graduated with a B.App.Sci in Geology from the University of Canberra in 1989. David has been a Member of the AUSIMM for over 15 years.

David has worked extensively within Australia in Archaean (WA) and Palaeozoic terranes (NSW and Tasmania) with a focus the precious and base metal sectors. He has held a variety of geological positions for junior explorers through to Australian majors (past and present) as well as establishing a geological consultancy. More recently David has been providing services to companies exploring in Argentina, western USA, parts of Asia and Africa.

David joined Silver Mines in mid 2010 and fills the role of Exploration Manager. Tonight’s talk is titled Silver Mines’ – New England Strategy, focussing on the Webbs Silver deposit.

ABSTRACT

The Webb’s Silver Project is located in north-eastern NSW about 45km north of Glen Innes. Silver Mines hold a 100% interest in the project as well as several other projects in the region.

The Webb’s silver deposit was discovered in 1884 and has estimated production of around 55,000t @ 700g/t Ag. Historical work from 1946 has included mapping, sampling, drilling, geophysics and underground re-development in the early 1960’s. Minor work from 2000-2003 included the drilling of two RC holes.

Silver Mines Limited (ASX:SVL) acquired the project in 2006 and has since conducted several drilling campaigns totalling approximately 28,000m in 260 RC holes and 31 diamond holes. Several IP surveys, ground EM, mapping and sampling as well as historical data compilation have also been undertaken. So far this work has delineated resources of 1.46Mt @ 245g/t Ag (11.74 Moz Ag) plus accessory Cu, Pb and Zn. In addition to the current resource Silver Mines has delineated an exploration target of 14-45Moz of silver.

The Webbs deposit remains open at relatively shallow depths and has excellent potential for further discovery. Regional potential for similar deposits is also considered high and many targets are drill ready. Recent metallurgical testwork on Webbs indicates potential silver recoveries of over 90% to doré bars utilising the Albion Process^TM. A new drilling program is commencing in late 2012.

The NEO is a significant metallogenic province in Eastern Australia and hosts a variety of mineral deposits. Silver rich deposits are generally related to granitic intrusives and felsic volcanics. The dominant geological feature in the Webbs region is the early Triassic aged highly fractionated, reduced I-type Mole Granite which intrudes Permo-Carboniferous sedimentary and silicic volcanic rocks. The Mole Granite is related to district scale zoned mineralisation in the area. Silver-base metal mineralisation tends to occur outboard of the granite in surrounding meta-sediments, where as Sn-W-Bi- mostly occur within the granite itself. Many other silver deposits in the NEO are similar to Webbs.

Silver–base metal mineralisation at Webb’s is structurally controlled and developed in a narrow 3km long north trending zone. Mineralisation is hosted in steeply dipping lode zones of quartz-sericite-carbonate-chlorite altered meta-siltstone up to 15 m wide. Ore sulphides, tetrahedrite, sphalerite, galena and chalcopyrite occur as fracture-breccia fill veins and local dissemination with accessory arsenopyrite. Minor cassiterite and stannite also occur along with very minor amounts of other sulphide and alteration minerals. Sulphide paragenesis is consistent with an evolving system with early cassiterite-arsenopyrite overprinted by silver-base metal mineralisation.

Mineralisation at Webbs is similar to many other silver deposits in the area. That is: proximal to the Mole Granite or sub-surface apophysis, have a polymetallic nature with varying levels of Ag-Cu-Pb-Zn-As-Sb-Sn-Bi-W along with quartz-sericite-carbonate-chlorite alteration and are dominantly hosted in metasediments.

Silver Mines is actively exploring many of these targets using the Webbs model. This will include drilling many prospects that have never been drill tested.