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allotment of securities The Directors advise that the Company has issued a total of 16,500 fully paid ordinary shares. The shares were issued as follows:
An Appendix 3B form (New issue announcement, application for quotation of additional securities and agreement) detailing the issue is attached. Yours faithfully, Garry Edwards
Letters to SHAREHOLDERS AND MMNO optionHolders Dear Shareholder, I am writing to you in regard to the Macmin Entitlements Issue which closed on 19th September 2008. The Issue was undersubscribed, largely due, I believe, to the turmoil in share markets around the world, and substantial drop in the silver price. Under the terms of the Prospectus, Macmin now intends to place the shortfall. If you have subscribed already I thank you for your support. You now have a further chance to subscribe for any amount of shares that you wish, at the original price of 7 cents (AUD) for a package of one Share and one free attaching 2011 Option exercisable at 8 cents. The 2011 options are listed on the ASX as MMNOB and have initially traded at 3.1 cents giving the package a market value as at the opening of trading on 1st October 2008 of 7.9 cents. The silver price appears to be recovering and as at 1st October was approximately AUD$15/oz. We need your support to ensure that the current upgrade at the Twin Hills Silver Mine is completed so that silver production can increase. In the interim, Macmin, on 23rd September sold 7 million New Guinea Gold shares through Bolder Investment Partners of Vancouver to net approximately AUD$1.75 million. These funds will supplement the funds received from the Issue and subsequent placement. Further sales could be made if necessary. The Entitlements Issue to shareholders was to raise a maximum of AUD$11.5M by the issue of up to 164 million Shares and 164 million 2011 Options. The proceeds were primarily to be used to upgrade the Twin Hills Silver Mine at Texas, in Queensland, Australia, increase silver production at that mine, repay debt to Cornell Capital, and exploration and working capital. Approximately 150 million Shares and 150 million 2011 Options are available for placement, which, if the present 2008 Options are ignored (unlikely to be converted to shares) would represent approximately 23% of Macmin’s issued capital as at the end of 2008. Further, if the 2011 Options are assumed to be converted to Shares, the present shortfall represents 36% of Macmin’s fully diluted capital (excluding approximately 20 million unlisted out of the money options) as at the end of 2008. This represents an excellent opportunity for an incoming major shareholder. This shortfall placement offers investors, shareholders and existing optionholders the chance to acquire additional Shares and 2011 Options in Macmin Silver at, in my opinion, a very favourable price. Details of the Entitlements Issue are set out in the Prospectus (originally mailed to you), or available at www.macmin.com.au. If you wish to discuss this offer please contact Bob McNeil or Garry Edwards on Applications may only be made on the shortfall application form which will be forwarded with a copy of the prospectus – please contact Coralie Mansell-Simon on +61 7 5592 2274 or email cmansellsimon@macmin.com.au for an application form. To indicate their confidence in the company, Bob McNeil and Rosemary McNeil have subscribed AUD $42,000 to the Issue. Yours sincerely,
R.D. McNeil
03 October 2008 Dear Optionholder, I am writing to you in regard to the Macmin Entitlements Issue which closed on 19th September 2008. The Issue was undersubscribed, largely due, I believe, to the turmoil in share markets around the world, and substantial drop in the silver price. Under the terms of the Prospectus, Macmin now intends to place the shortfall. This is now an opportunity for you to subscribe to the Issue. You may subscribe for any amount of shares that you wish, at the original price of 7 cents (AUD) for a package of one Share and one free attaching 2011 Option at 8 cents. The 2011 options are listed on the ASX as MMNOB and have initially traded at 3.1 cents giving the package a market value as at the opening of trading on 1st October 2008 of 7.9 cents. The silver price appears to be recovering and as at 1st October was approximately AUD$15/oz. We regret that the existing 2008 Options are unlikely to be “in the money” on the expiry date. As the holder of some 2008 Options myself, I can understand your concern in this matter, but can only suggest that this is an opportunity to acquire new long-term options with a low exercise price. We need your support to ensure that the current upgrade at the Twin Hills Silver Mine is completed so that silver production can increase. In the interim, Macmin, on 23rd September, sold 7 million New Guinea Gold shares through Bolder Investment Partners of Vancouver to net approximately AUD$1.75 million. These funds will supplement the funds received from the Issue and subsequent placement. Further sales could be made if necessary. The Entitlements Issue to shareholders was to raise a maximum of AUD$11.5M by the issue of up to 164 million Shares and 164 million 2011 Options. The proceeds were primarily to be used to upgrade the Twin Hills Silver Mine at Texas, in Queensland, Australia, increase silver production at that mine, repay debt to Cornell Capital, continuing exploration and working capital. This shortfall placement offers investors, shareholders and existing optionholders the chance to acquire additional Shares and 2011 Options in Macmin Silver at, in my opinion, a very favourable price. Details of the Entitlements Issue are set out in the Prospectus available at www.macmin.com.au. If you wish to subscribe, or discuss the placement, please contact Bob McNeil or Garry Edwards on +61 7 5592 2274 or email rdmcneil@macmin.com.au, or gedwards@macmin.com.au. Applications may only be made on the shortfall application form which will be forwarded with a copy of the prospectus – please contact Coralie Mansell-Simon on +61 7 5592 2274 or email cmansellsimon@macmin.com.au for an application form. To indicate their confidence in the company, Bob McNeil and Rosemary McNeil have subscribed AUD $42,000 to the Issue. Yours sincerely,
R.D. McNeil
EXPIRY 30 OCTOBER 2008 OPTIONS ("MMNO") In compliance with paragraph 6.1 of Appendix 6A of the ASX Listing Rules, the Company advises that it will not send option expiry notices to optionholders whose options expire on 30 October 2008. We further state that:
By order of the Board R.D. MCNEIL tWIN HILLS SILVER MINE UPGRADE The initial upgrade at the Twin Hills Silver Mine is almost complete. The existing crushing circuit will shut down for three days this week to allow the new components of the circuit to be integrated with the existing circuit. Commissioning of the upgraded circuit should commence in the near future. Improvements to the heap irrigation system are also being implemented to achieve more comprehensive leaching coverage, particularly to the sloped sides of the heaps. Together with additional ore that has now been placed on Heap Two, a further 60,000 tonnes of unleached ore is expected to be under irrigation within the next week. Yours faithfully, R.D. MCNEIL Macmin Silver Ltd is a silver focused company that has been listed on the ASX since 1993, whose primary projects are the Texas Silver Project, South-East Queensland, Australia where the Twin Hills Silver Mine is located, and the Tally Ho and Mt Scott Projects near Mackay, Central Queensland. The Company aims to utilise its accumulated knowledge and skilled team of staff to consolidate a position as the premier silver focussed company in Australia. This objective is based on our belief that rising silver prices herald a recognition that silver in the 21st Century will be a fundamental metal in technological advances and an important investment asset. Macmin has exposure to gold by way of an investment of 17.8 million shares in New Guinea Gold Corporation (NGG) and a 1% NSR royalty on production by NGG. In addition, Macmin maintains equity investments in junior Australian explorers, Malachite Resources NL and Frontier Resources Ltd. Further information is available at www.macmin.com.au. ALLOTMENT - ENTITLEMENTS ISSUE As advised to ASX on 24 September 2008, the Entitlements Issue (Prospectus dated 19 August 2008) that closed on Friday 19 September 2008 received applications for 13,356,503 shares with 13,356,503 free attaching options, raising a total of $934,955.21. Allotment of these shares and options has been processed today and holding statements will be despatched by the Share Registry today as scheduled. Appendix 3Y “Change of Directors Interest Notice” for one director is attached. The Top 20 Shareholders and MMNOB Optionholders and the Distribution Schedules are attached in relation to the Entitlements Issue Appendix 3B that was lodged on 19 August 2008. Yours faithfully,
Garry Edwards
ANNUAL REPORT FOR YEAR ENDED 30 JUNE 2008 We enclose the Annual Report for the year ended 30 June 2008. The Annual General Meeting of Shareholders will be held at The Paradise Room, Gold Coast Turf Club, Racecourse Drive, Surfers Paradise, Queensland on Wednesday 19th November 2008 at 10.00am. Yours faithfully,
Garry M. Edwards Encl. SALE OF SHARES IN NEW GUINEA GOLD BY MACMIN The Company has today sold 7 million of the shares it held in New Guinea Gold Corporation (NGG), which is listed on the TSX venture exchange. The sale raised approximately AUD$1.75M net and reduces the Company’s holding to approximately 11 million shares or 7% of NGG. The Company holds a 1% royalty on gold sales by NGG and also retains an equity bonus entitlement equivalent to 9% of NGG’s issued capital if gold production exceeds 50,000oz in a year. NGG contemplates the development of additional mines in Papua New Guinea and it is possible that the 50,000oz per annum could be achieved if those developments proceed. Funds raised from the sale will be applied to the Twin Hills Silver Mine and will supplement the funds raised from the recent Entitlements Issue. Yours faithfully,
Garry Edwards
entitlements issue closed The Entitlements offer contained in the Prospectus dated 19 August 2008 closed on 19 September 2008 and 13,356,503 shares and free attaching 2011 MMNOB options have been allotted, raising $934,955.21. Chairman and CEO Bob McNeil and Mrs Rosemary McNeil subscribed $42,000 to the entitlements issue. The new Shares and Options will be issued and holding statements despatched by the Share Registry on Monday 29 September 2008, subject to clearance of funds, and trading will commence on 30 September 2008. The Company has reserved the right to issue the shortfall and is discussing placement of part of the shortfall with interested investors. Persons interested in acquiring securities under the same terms as the Entitlements Issue Prospectus are invited to contact the Company for a prospectus and shortfall application form. An Appendix 3B in relation to the Entitlements Issue was lodged on 19 August 2008. Yours faithfully
Garry Edwards
issue of shares The Company has issued a total of 6,403,147 fully paid ordinary shares, being the fourth of five tranches, announced on 1 May 2008 “Proposed Issue of Shares”, to YA Global Investments, L.P. (trading as Cornell Capital Partners Offshore, LP) under the terms of the Convertible Note dated 29 October 2007. Appendix 3B is attached. The Company seeks to rely on case 1 in Section 708A(5) of the Corporations Act (“Act”) in respect of the issue of those shares. The Company gives notice under paragraph (5) (e) of Section 708A of the Act to confirm that:
Yours faithfully, arry Edwards
Mailout To Shareholders A Prospectus containing a 1 for 3 non-renounceable Entitlements Issue of Shares at 7 cents each, with one free option accompanying every New Share allotted, a copy of which was included in an ASX announcement dated 19 August 2008, was mailed to shareholders today along with personalised Entitlement and Acceptance Forms.
Yours faithfully,
Garry M. Edwards
TWIN HILLS SILVER MINE Sufficient ore has now been placed on Leach Pad 2 (West Pad) for leaching of silver to commence. Approximately 60,000 tonnes of ore at an estimated grade of approximately 95g/t silver has been placed. Initial capacity of Pad 2 is estimated at 440,000 tonnes. This capacity may be increased in the future if the ultimate height of the pad is raised to 16 metres. In addition to Pad 2 there are at present approximately 220,000 tonnes of partially leached ore in process on Pad 1 or East Pad. Further ore is presently being placed on Pad 1 which will increase its near term capacity to 240,000 tonnes. Bob McNeil Chairman and CEO commented: “Commencement of leaching from Pad 2, which will augment production from Pad 1 (leaching of Pad 1 continues), is a significant milestone.” Yours faithfully
R.D. MCNEIL Macmin Silver Ltd is a silver focused company that has been listed on the ASX since 1993, whose primary projects are the Texas Silver Project, South-East Queensland, Australia where the Twin Hills Silver Mine is located, and the Tally Ho and Mt Scott Projects near Mackay, Central Queensland. The Company aims to utilise its accumulated knowledge and skilled team of staff to consolidate a position as the premier silver focussed company in Australia. This objective is based on our belief that rising silver prices herald a recognition that silver in the 21st Century will be a fundamental metal in technological advances and an important investment asset. Macmin has exposure to gold by way of an investment of 17.8 million shares in New Guinea Gold Corporation (NGG) and a 1% NSR royalty on production by NGG. In addition, Macmin maintains equity investments in junior Australian explorers, Malachite Resources NL and Frontier Resources Ltd. Further information is available at www.macmin.com.au.
1. ALLOTMENT OF SECURITIES 1. The Directors advise that the Company has issued a total of 13,179 fully paid ordinary shares. The shares were issued as follows:
An Appendix 3B form (New issue announcement, application for quotation of additional securities and agreement) detailing the issue is attached. 2. An Appendix 3Y Change of Director’s Interest Notice is also attached forMr R.D. McNeil. Mr McNeil has advised that the entire net funds from this sale will be used to subscribe for securities in the current Macmin Silver Ltd Entitlements Issue. Yours faithfully, Garry M. Edwards Company Secretary
Associate Company: New Guinea Gold Corporation Announces Sinivit drilling intersects further oxide gold results such as 20m at 17.2g/t gold New Guinea Gold Corporation, in which Macmin Silver Ltd holds approximately 18 million shares, issued the following press release in Canada on 20 August 2008. Yours faithfully
R.D. MCNEIL The information in the report to which this statement is attached that related to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Robert McNeil, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Robert McNeil is employed by Macmin Silver Ltd. Robert McNeil 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’. Robert McNeil consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Associate Company: New Guinea Gold Corporation Announces Mine Development Strategy - Tellurium A Possible Bonus at Sinivit New Guinea Gold Corporation, in which Macmin Silver Ltd holds approximately 18 million shares, issued the following press release in Canada on 19 August 2008. Yours faithfully
R.D. MCNEIL The information in the report to which this statement is attached that related to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Robert McNeil, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Robert McNeil is employed by Macmin Silver Ltd. Robert McNeil 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’. Robert McNeil consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Drilling Commences at Silver Spur, Texas District Macmin Silver Ltd has commenced drilling on the Silver Spur Mine Lease to explore the potential for silver, zinc lead sulphide mineralisation below the final mined depth for the Silver Spur Mine. Historically Silver Spur was mined for silver in the late 1800’s early 1900’s. Approximately 2 million ozs of silver was recovered from 100,000 tonnes of ore mined at an average mined grade of 800g/t silver, 25% zinc, 13% lead at 1.5g/t gold (historical record from Rimfire Pacific Mining N.L. prospectus). The mine closed at the advent of World War 1. The Twin Hills Silver Mine is situated approximately 1.5 kilometres north west of Silver Spur. The present Inferred Mineral Resource at Silver Spur based on mine workings and historical drill holes is 808,000t at 2.25 ozs/t silver, 3.56% zinc, 1.25% lead, 0.17% copper and 0.09g/t gold. The present diamond core hole (SSD5) is planned for a final depth of 250m and should intercept the Silver Spur sulphide zone between 180 and 200m down hole. The hole is at present at approximately 90m depth. Yours faithfully,
R.D. McNeil The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Denis O’Neill, who is a Member of the Australian Institute of Mining & Metallurgy. Denis O’Neill is a part time employee of the Company has sufficient experience which is relevant to the type 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’. Denis O’Neill consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
ASX Announcment - Lodgement of prospectus Macmin Silver Ltd has lodged a prospectus with ASX and ASIC for a 1 for 3, non-renounceable Entitlements Issue of shares at 7 cents, with one free option accompanying every New Share allotted, to raise a maximum of approximately $11.5 million. The record date is 28 August 2008 and the issue will close on 19 September 2008. The purpose of the issue is to allow the Company to continue with upgrades and improved production at the Twin Hills Silver Mine, continue ongoing exploration to increase the silver resource base of the Company and possibly reduce debt which is currently being repaid by the issue of shares. The attached initial advice to shareholders contains further details and will be mailed to each shareholder on 21 August 2008. Optionholders will be given preference, after shareholders, in respect of applications for any shortfall. Investors who are not currently shareholders may become eligible to participate by purchasing shares on or before 21 August 2008 or may apply to the Company to purchase shares with free attaching options from any remaining shortfall. An Appendix 3B in respect of the issue is also attached. Yours faithfully, Garry M. Edwards Company Secretary
ASSOCIATE COMPANY: NEW GUINEA GOLD CORPORATION ANNOUNCES SINIVIT DRILLING INTERSECTS 20m at 25.7g/t GOLD and 2.19% COPPER INCLUDING 2m at 158.0g/t GOLD and 4.32% COPPER New Guinea Gold Corporation, in which Macmin Silver Ltd holds approximately 18 million shares, issued the following press release in Canada on 14 August 2008. Yours faithfully,
R.D. McNeil The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by, or compiled under the supervision of Robert D. McNeil Fellow of AustIMM and Denis O’Neill, Member of the AustIMM. Robert McNeil and Denis O’Neill are employed by Macmin Silver Ltd and have sufficient experience which is relevant to the type of mineralisation and type of deposit under consideration to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code of Reporting Exploration Results, Mineral Resources and Ore Resources. Robert McNeil and Denis O’Neill consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.
CRUSHER UPGRADE CONSTRUCTION UNDERWAY AT TWIN HILLS SILVER MINE Most components for the Crushing Circuit Upgrade are now on site at the Twin Hills Silver Mine, at Texas in South East Queensland, Australia with the remainder scheduled to arrive on Monday 18th August 2008. Construction is underway and should be completed within the next few weeks, with commissioning projected to be completed by mid September. The crushing circuit at the Twin Hills Silver Mine has been a significant impediment to a substantial increase in silver production over the past six months. The upgraded circuit should allow crushed product to increase initially to 60,000t/month and by the end of 2008 to 100,000t/month. By comparison, in July, the present circuit crushed 28,000 tonnes. Bob McNeil Chairman and CEO commented: “We are pleased to be able to report that the crushing circuit site construction upgrade is underway - about some four and a half months late. Silver production, without benefit of the upgrade, increased to some 43,000 ozs in July, and as at the end of July we had approximately 125,000 ozs silver in various metal accounts available for sale at a time of our choosing. Some silver is presently sold ex mine (as is) and the remainder is processed to 99.9% silver and sold as bullion.
The bar chart above shows the steady improvement in silver production, by quarter, for the past twelve months, again without benefit of the crushing circuit upgrade. This improvement should substantially accelerate in the last quarter of 2008 and early 2009.” Yours faithfully, MACMIN SILVER LTD R.D. McNeil
Macmin Silver Ltd is a silver focused company that has been listed on the ASX since 1993, whose primary projects are the Texas Silver Project, South-East Queensland, Australia where the Twin Hills Silver Mine is located, and the Tally Ho and Mt Scott Projects near Mackay, Central Queensland. The Company aims to utilise its accumulated knowledge and skilled team of staff to consolidate a position as the premier silver focussed company in Australia. This objective is based on our belief that rising silver prices herald a recognition that silver in the 21st Century will be a fundamental metal in technological advances and an important investment asset. Macmin has exposure to gold by way of an investment of 17.8 million shares in New Guinea Gold Corporation (NGG) and a 1% NSR royalty on production by NGG. In addition, Macmin maintains equity investments in junior Australian explorers, Malachite Resources NL and Frontier Resources Ltd. Further information is available at www.macmin.com.au.
Issue of SHARES The Company has issued a total of 4,962,976 fully paid ordinary shares, being the third of five tranches, announced on 1 May 2008 “Proposed Issue of Shares”, to YA Global Investments, L.P. (trading as Cornell Capital Partners Offshore, LP) under the terms of the Convertible Note dated 29 October 2007. Appendix 3B is attached. The Company seeks to rely on case 1 in Section 708A(5) of the Corporations Act (“Act”) in respect of the issue of those shares. The Company gives notice under paragraph (5) (e) of Section 708A of the Act to confirm that:
Yours faithfully,
Garry Edwards
Macmin Silver Ltd is a silver focused company that has been listed on the ASX since 1993, whose primary projects are the Texas Silver Project, South-East Queensland, Australia where the Twin Hills Silver Mine is located, and the Tally Ho and Mt Scott Projects near Mackay, Central Queensland. The Company aims to utilise its accumulated knowledge and skilled team of staff to consolidate a position as the premier silver focussed company in Australia. This objective is based on our belief that rising silver prices herald a recognition that silver in the 21st Century will be a fundamental metal in technological advances and an important investment asset. Macmin has exposure to gold by way of an investment of 17.8 million shares in New Guinea Gold Corporation (NGG) and a 1% NSR royalty on production by NGG. In addition, Macmin maintains equity investments in junior Australian explorers, Malachite Resources NL and Frontier Resources Ltd. Further information is available at www.macmin.com.au.
tally ho prospect update Metal Equivalents In the case of a polymetallic deposit such as Tally Ho, where, in the event mining occurs, the value of the product produced is the sum of individual metals values, management considers that metal equivalents are appropriate for both cut-offs and in reporting average grades for the resource. In this instance, as silver is the predominant metal, the metal equivalents are expressed in silver equivalents*. The metal equivalents were calculated using metal equivalent calculations as illustrated in the table below. Management cautions that silver equivalent* values will change as metal prices change.
No metallurgical studies have been completed but initial petrological studies show the metals are hosted within the following sulphide species; tetrahedrite, sphalerite, chalcopyrite, galena and pyrite. These sulphide species are all relatively course grained and as such should be able to be liberated easily by comparison to other similar deposits, attaining recoveries of plus 90%. The Resource is currently classified as Inferred for the following reasons: Variography was carried out on all elements within all domains where there were sufficient data points to get a meaningful variogram. Both absolute and median indicator variograms were investigated, with final modelling parameters being determined from the median indicator variograms. Each element was modelled with its own unique set of parameters within the main geological and geochemical domains. FJ Hughes and Associates used GEMS software to undertake 3D block modelling of the resource using Ordinary Kriging techniques with a 98.5% top-cut to minimise the effects of high-grade outliers. Block models were created for the following elements: Silver (Ag), Gold (Au), Copper (Cu), Lead (Pb) and Zinc (Zn). All elements were coded for specific geological and geochemical domains, and interpolated within these individual domains. The Resource is visually depicted in the diagram below:
Current RC Drilling Program Our latest program of RC (reverse circulation) drilling at the Tally Ho prospect commenced on 20 June 2008. This program will allow the initial drill testing of seven target areas which have been identified by a combination of soil sampling, rock chip sampling and field mapping in the area surrounding the central Tally Ho prospect (Figure 2 – target numbers do not represent a relative prospectivity / priority). To date 1,500m of drilling in 16 holes has been completed. All assays will be reported at the conclusion of the program. These target areas all fall within a regional scale NE-SW trending structural corridor, observable on the regional aeromagnetic data and satellite imagery of the greater Tally Ho Project. This structural corridor is interpreted to be a long lived, deep seated feature which has seen various episodes of activation, making it a favourable location for the emplacement of young metal rich intrusive bodies and associated mineralising systems (Intrusion Related Mineralising Systems) which have the potential to form economic metal concentrations. The central Tally Ho prospect/breccia unit has a current strike extent of approximately 200m which also trends NE-SW. The targets to be tested by our current RC drilling programme represent areas which are along strike of or parallel to, the central Tally Ho prospect. The current seven targets to be drilled fall within the 1.5 x 1.5 km (2.25 sq km) area covered by our soil sampling results within the greater Tally Ho Project area which comprises a total of 147 sq km. There are at least three further target areas within the area covered by the soil sampling which warrant drill testing, but are not planned to be tested at this stage due to budgetary constraints. The Inferred Resource at Tally Ho was estimated by Ms Felicity Hughes BSc(Hons) MAusIMM, MAIG, a fulltime employee of F Hughes & Associates, under the supervision of R. McNeil, D. O’Neill and Paul Abbott (CEO/Chairman, Exploration Director and Exploration Manager of Macmin Silver Ltd respectively), using GEMS geological modelling software. Ms. Hughes has considerable experience in the estimation of resources over a wide variety of commodities. Yours faithfully,
R.D. McNeil The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by, or compiled under the supervision of Robert D. McNeil Fellow of AustIMM and Denis O’Neill, Member of the AustIMM. Robert McNeil and Denis O’Neill are employed by Macmin Silver Ltd and have sufficient experience which is relevant to the type of mineralisation and type of deposit under consideration to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code of Reporting Exploration Results, Mineral Resources and Ore Resources. Robert McNeil and Denis O’Neill consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. Notes: Figure 1
Figure 2
issue of shares The Company has issued a total of 3,464,559 fully paid ordinary shares, being the second of 5 tranches, announced on 1 May 2008 “Proposed Issue of Shares”, to YA Global Investments, L.P. (trading as Cornell Capital Partners Offshore, LP) under the terms of the Convertible Note dated 29 October 2007. Appendix 3B is attached. The Company seeks to rely on case 1 in Section 708A(5) of the Corporations Act (“Act”) in respect of the issue of those shares. The Company gives notice under paragraph (5) (e) of Section 708A of the Act to confirm that:
Yours faithfully,
Garry Edwards Macmin Silver Ltd is a silver focused company that has been listed on the ASX since 1993, whose primary projects are the Texas Silver Project, South-East Queensland, Australia where the Twin Hills Silver Mine is located, and the Tally Ho and Mt Scott Projects near Mackay, Central Queensland. The Company aims to utilise its accumulated knowledge and skilled team of staff to consolidate a position as the premier silver focussed company in Australia. This objective is based on our belief that rising silver prices herald a recognition that silver in the 21st Century will be a fundamental metal in technological advances and an important investment asset. Macmin has exposure to gold by way of an investment of 17.8 million shares in New Guinea Gold Corporation (NGG) and a 1% NSR royalty on production by NGG. In addition, Macmin maintains equity investments in junior Australian explorers, Malachite Resources NL and Frontier Resources Ltd. Further information is available at www.macmin.com.au.
ASSOCIATE COMPANY: NEW GUINEA GOLD CORPORATION ANNOUNCES INFERRED MINERAL RESOURCE FOR ITS IMWAUNA PROJECT OF 1.8MT AT 12.2G/T GOLD AND 20G/T SILVER FOR CONTAINED METAL OF 706,000OZS GOLD AND 1,160,000OZS SILVER New Guinea Gold Corporation, in which Macmin Silver Ltd holds approximately 18 million shares, issued the following press release in Canada on 12 June 2008. Yours faithfully, R.D. McNeil The information in the report to which this statement is attached that related to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Robert McNeil, who is a Fellow of the Australasian Institute of Mining and Metallurgy. Robert McNeil is employed by Macmin Silver Ltd. Robert McNeil 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’. Robert McNeil consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
ISSUE OF SHARES The Directors advise that the Company has issued a total of 2,647,375 fully paid ordinary shares, being the first of 5 tranches, announced on 1 May 2008 “Proposed Issue of Shares”, to YA Global Investments, L.P. (trading as Cornell Capital Partners Offshore, LP) under the terms of the Convertible Note dated 29 October 2007. Appendix 3B is attached. The Company seeks to rely on case 1 in Section 708A(5) of the Corporations Act (“Act”) in respect of the issue of those shares. The Company gives notice under paragraph (5) (e) of Section 708A of the Act to confirm that: Yours faithfully, Garry Edwards COMPANY SECRETARY
TWIN HILLS MINE UPDATE - TEXAS SILVER PROJECT The Twin Hills Silver Mine continues to progress towards increased silver production. A second crusher is now installed and operating. This contract crushing circuit is additional to the previously announced upgrade of Macmin’s existing crushing circuit. At present this contract crusher is crushing 100,000t medium grade ore which is on stockpile, to a size grade of 100% minus 20mm. When the upgraded Macmin crushing circuit is completed this product will be fed into the upgraded circuit, with the minus 4mm material being directly screened out and placed on the heaps and the remaining product will be further crushed to 100% minus 4mm and then placed on the heaps. The Macmin crusher upgrade is proceeding, but as previously announced this will not be completed until the end of June and it is unlikely that full capacity will be reached until late July or early August. The Macmin crushing circuit is presently crushing in excess of 20,000t/month to the required minus 4mm. Planning is proceeding to move to extended crushing hours, probably two eight hour shifts, but is still restricted by difficulty in hiring suitable personnel. The initial batch of silver powder has been upgraded by removing impurities and is presently being converted to silver dore bars. Further batches of silver powder will be upgraded on a regular/semi continuous basis. Heap Leach Pad One is now effectively completed with approximately 220,000 tonnes of ore stacked to an average height of 8 metres. This pad is approximately 55% under cyanide irrigation and is expected to progress to 100% under irrigation over the next few weeks. This should result in a substantial increase in silver leaching and subsequent silver powder production. Although this pad has been under construction for more than 12 months and has been partially leached of silver, irrigation and leaching, for various reasons, has not been continuous. To achieve continuous and complete irrigation of Pad One is a significant milestone. Heap Leach Pad Two is approximately four weeks behind schedule and is presently being covered with a protective layer of fine material and a coarse drainage layer. Stacking of crushed ore will commence in the near future. This pad has a capacity to an 8 metre height of approximately 440,000 tonnes of ore. Irrigation and leaching of this pad cannot commence until a significant part of the pad has been built to the 8 meter height which may take two months. The Merrill Crowe plant is presently being commissioned and initially will produce approximately one tonne of silver as a commissioning exercise to determine quality and characteristics of the product. Bob McNeil Chairman and CEO commented: “Firstly I would like to welcome Ian Gibson to the position of Chief Operating Officer. I am sure that Ian, together with other dedicated staff including John Magnussen, Warren Beynon, Mark Morrison and all the supervisors and employees at the Twin Hills site are making every effort to increase silver production at the mine. I thank them for their efforts and dedication. We have had numerous requests by phone and email for details of the Twin Hills progress. Although these have been reported before we have described all aspects of the progress at the mine and the process including problems that have developed during commissioning, below. Firstly a brief description of heap leaching is probably appropriate. Heap leaching was introduced in the 1970’s as a means to drastically reduce gold recovery costs. It is also effective with silver in certain circumstances. This process has literally made many mines by taking low grade resources and transforming them into a viable mine. Heap leaching involves placing crushed or run of mine ore in a pile built upon an impervious liner. Cyanide solution is distributed across the top of the pile and the solution percolates down through the pile and leaches out the silver/gold. The silver/gold laden pregnant solution drains out from the bottom of the pile and is collected for recovery by either carbon adsorption, zinc precipitation (Merrill Crowe), or in Macmin’s case by Electrowinning. The barren solution is then recycled to the pile. Heap leaching generally requires 60 to 150 days for processing ore that could be leached in 24 hours in a conventional agitated leach process. Recovery is typically about 70% as compared with 90% in an agitated leach plant. Even with this lower recovery performance, the process has found wide favour, due to the vastly reduced processing costs compared with agitated leaching.” Resources were defined by earlier drilling and were used as part of the feasibility study. Grade Control drilling is/has been carried out to guide the accurate mining of silver ore. In some projects there are significant differences between original resources and mined ore. In the case of Twin Hills grade control drilling and mining has confirmed the original estimates of silver content of the ore. No problems have been identified with the resource. Mining is carried out using hired equipment operated, supervised and directed by Macmin Staff. Mining of ore and waste is proceeding to plan and there are no problems in this department. To achieve satisfactory leaching/recovery of silver from the rock, the ore must be crushed or converted to size fractions of 100% minus 4mm size, including 50% minus 1mm size, either by crushing or during blasting of the ore prior to mining. At this ore sizing, feasibility studies suggested that 70/72% of the silver would be recovered. The minus 4mm fraction is then agglomerated or mixed with cement and lime to achieve a better product for leach solution percolation and the required pH of 10. It is then stacked on the heap or heaps for leaching. The commissioning showed that the crushing circuit as specified by the feasibility study, and operated on a single shift basis was inadequate to achieve sufficient crushed material. The reasons were: maintenance problems with the crushing circuit; the inability to hire sufficient trained operators to run more than a single day shift; and inadequate screens to remove the fine fraction early in the crushing process. For example, when blasted, the ore contains 15 to 30% of the required size (i.e. less than 4mm) which does not require further crushing. However, the present circuit required all that material to traverse the crushing circuit as the size screens incorporated in the current circuit were inadequate to remove the fines at an early stage in crushing. This resulted in “clogging up” of the circuit and maintenance problems. Alternatively, if crushing could have been maintained on a 24 hour basis this problem could have been partly offset. Because of intense competition for trained operators in the mining industry at present, we can not hire sufficient trained personnel and consequently we have had to train our own operators. This is time consuming. A further unanticipated problem is that the ore is harder and more abrasive than predicted.These problems have been resolved in several ways: Our initial target is to place 60,000 tonnes of minus 4mm material on heaps/month, moving to 100,000/120,000 tonnes/month as ore grades decrease. This latter target may require further crushing capacity. The timing of achieving the initial objective of 60,000 tonnes/month on to the heaps is difficult to predict, but unlikely to occur before August 2008. Stacking of ore on the heaps using conveyers and “grasshoppers” was found to be unsatisfactory, and we have moved to stacking by trucks. This does not appear to impede solution circulation. After being placed on heaps 8 metres high, the ore is saturated with cyanide leaching solution which dissolves the silver. The solution (pregnant solution) with the dissolved silver is collected and stored in specially constructed and covered ponds. To date, leaching has not been continuous. This was caused by several factors: the fact that Leach Pad One is only now being completed; because of experimentation with various ways of applying the leach solution such as sprinklers and drippers; use of different volumes of solution; accumulation of silt in the ponds caused by early rain events; and other minor factors. All these factors have now been remedied and we will commence complete and continuous leaching of Pad One within the next two weeks. Leach rates are still uncertain because of the irregular irrigation of parts of Heap One, however, tests suggest that leaching rates will be slower than predicted in the feasibility study and it may take more than the six months predicted in the Feasibility Study to extract the predicted 70/72% silver from the heaps. At this stage we have no evidence to suggest that recoveries of 70/72% will not be ultimately achieved. The problem in slower leach rates is that we will not be able to proceed with a second lift to the pads, as originally planned, as early as anticipated (to a height of say 16 metres). Thus additional leach pads may need to be constructed for continued silver production. The silver is extracted from pregnant solutions using an electrowinning process. This EMEW plant contains 180 cells, is modular, and can be relatively easily increased in capacity. The EMEW plant is now running on a 24 hour/7day schedule. Each cell in the plant has not produced at the rate specified by the manufacturers, Electrometals Ltd, but by experimentation, its capacity is gradually being increased. Problems have also arisen with the coatings on some anodes and these have now been replaced. As the plant was designed with at least 50% overcapacity, the reduced capacity of each individual EMEW cell is not expected to be a problem with production in the near term, but could restrict expansion. The leaching solutions from the heap carry 60 to 90g/t silver. The EMEW plant has shown to be inefficient in extracting or reducing the silver in leach solutions below 40g/t silver. These “barren” solutions which still contain 40g/t silver are then recycled to the heap, with further dissolved silver rebuilding the solutions to 60 to 90g/t silver. There is a concern that it is inefficient to recycle solutions with as much as 40g/t contained silver. Consequently a Merrill Crowe plant has been installed to remove further silver to much lower concentrations. The intent is that silver will be reduced to 40g/t by electrowinning, then pass through the Merrill Crow which will reduce silver content to less than 10g/t. This “barren” solution will then be recirculated to the heaps. Alternatively, at present, as we ramp up irrigation, the barren solution is diluted with additional fresh water to reduce the silver content to acceptable levels. The Merrill Crowe plant is presently being commissioned and should be “on line” in the near future. The silver powder produced is very fine grained with a size range of 72% less than 20 microns. Some of the silver powder is presently being sold “as is” for specific applications. However an unexpected side effect of the EMEW plant is that it also extracts some other metals and the silver powder produced to date contains contaminants which are unacceptable to some buyers. These are removed before smelting and this being done successfully in Melbourne, Australia. The silver powder can then be smelted, refined and sold. Alternatively we are still discussing offers to purchase the powder “as is”. In this matter we are attempting to maximise the return to the Company. Yours faithfully, R.D. McNeil
Bob McNeil Appointed Chief Executive Officer Mr Garry Edwards has resigned as Chief Executive Officer (CEO) for Macmin Silver Ltd. Mr Edwards feels that the ongoing development of the Twin Hills Mine requires a CEO with broader mining and technical experience. Mr Edwards served as Chief Financial Officer (CFO) from 1995 to 2007 and the Board would like to thank Garry for his considerable efforts and dedication over the past twelve years on behalf of Macmin including his time as CEO. Bob McNeil, currently Chairman, has assumed the role of Executive Chairman and CEO until a permanent appointment is completed. He will be assisted by Denis O’Neill and Garry Edwards over the coming few months to fulfil this role. Ian Gibson, currently General Manager, Twin Hills Silver Mine Project, has been promoted to Chief Operating Officer with full authority over the Twin Hills Silver Mine Project. Mr Gibson will report directly to Bob McNeil, or in his absence to Denis O’Neill. I welcome Ian to this senior and responsible management role.
Yours faithfully, R.D. McNeil
ALLOTMENT OF SECURITIES The Directors advise that the Company has issued a total of 24,820 fully paid ordinary shares. The shares were issued as follows: • 24,820 at $0.25 per share pursuant to the exercise of MMNO listed options. An Appendix 3B form (New issue announcement, application for quotation of additional securities and agreement) detailing the issue is attached. Yours faithfully, Garry Edwards
APPENDIX 3Y, CHANGE OF DIRECTOR'S INTEREST NOTICE - robert Donald MCNEIL
PROPOSED ISSUE OF SHARES The Company has advised YA Global Investments, LP (trading as Cornell Capital Partners Offshore, LP) that the first repayment of US$1.5M of the Convertible Note (announced 19 September 2007) is to be by the issue of shares as provided for in the Convertible Note. Shares will be issued in five tranches over 5 months and the price will be calculated by reference to the weighted average price of the shares in the period prior to each tranche. Once the number of shares is determined this will be announced and an Appendix 3B lodged with ASX. The first issue will occur on 3 June 2008 and subsequent issues will be announced as and when they occur.
Yours faithfully, Garry Edwards The Company Macmin Silver Ltd is a silver focused company that has been listed on the ASX since 1993, whose primary projects are the Texas Silver Project, South-East Queensland, Australia where the Twin Hills Silver Mine is located, and the Tally Ho and Mt Scott Projects near Mackay, Central Queensland. The Company aims to utilise its accumulated knowledge and skilled team of staff to consolidate a position as the premier silver focussed company in Australia. This objective is based on our belief that rising silver prices herald a recognition that silver in the 21st Century will be a fundamental metal in technological advances and an important investment asset. Macmin has exposure to gold by way of an investment of 17.8 million shares in New Guinea Gold Corporation (NGG) and a 1% NSR royalty on production by NGG. In addition, Macmin maintains equity investments in junior Australian explorers, Malachite Resources NL and Frontier Resources Ltd. Further information is available at www.macmin.com.au.
ALLotment of securities The Directors advise that the Company has issued a total of 909 fully paid ordinary shares. The shares were issued as follows:
An Appendix 3B form (New issue announcement, application for quotation of additional securities and agreement) detailing the issue is attached. Yours faithfully, Garry Edwards TALLY HO SILVER PROJECT - UPDATE Earthworks, comprising track and pad construction and the associated cultural heritage clearance will begin next week to provide access for the next phase of drilling on the Tally Ho Project. A contract for 3,000m of Reverse Circulation (RC) drilling was awarded to Aqua Drilling of Melbourne, to commence drilling at the beginning of June. The aim of the drilling is to test at least five new targeted areas that have been generated by the recently completed soil geochemical and rock sampling programmes (Figure 1). This recently investigated area comprises 1.5km by 1.5km and has revealed mineralised breccia zones and basemetal and precious metal anomalism extending off the margins of the area. One of the target areas to be drilled occurs in the south-west corner of the area (approximately 750m south-west of the initial drill area) where rock chip sampling of 2 breccia outcrops (75m apart) produced results of 8m at 14g/t silver, 0.94g/t gold and 4m at 22g/t silver and 1.57g/t gold. These are the first outcrops where gold has been found associated with silver and base metals in surface outcrops. Groundwork EMS Pty Ltd, the resource consultancy contracted to complete a reserve estimate at Tally Ho, has advised that it is unable to complete the resource modeling in the agreed timeframe due to serious health issues associated with their resource consultant. Macmin sincerely regrets this delay in completing the Tally Ho resource estimate but unfortunately the delay is completely out of our control. Macmin has appointed F.J. Hughes and Associates to undertake this resource estimation work. Based on the consultant’s advice we expect to be able to announce this estimate in June. The aim of the drilling is to test at least five new targeted areas that have been generated by the recently completed soil geochemical and rock sampling programmes (Figure 1). This recently investigated area comprises 1.5km by 1.5km and has revealed mineralised breccia zones and basemetal and precious metal anomalism extending off the margins of the area. One of the target areas to be drilled occurs in the south-west corner of the area (approximately 750m south-west of the initial drill area) where rock chip sampling of 2 breccia outcrops (75m apart) produced results of 8m at 14g/t silver, 0.94g/t gold and 4m at 22g/t silver and 1.57g/t gold. These are the first outcrops where gold has been found associated with silver and base metals in surface outcrops. Groundwork EMS Pty Ltd, the resource consultancy contracted to complete a reserve estimate at Tally Ho, has advised that it is unable to complete the resource modeling in the agreed timeframe due to serious health issues associated with their resource consultant. Macmin sincerely regrets this delay in completing the Tally Ho resource estimate but unfortunately the delay is completely out of our control. Macmin has appointed F.J. Hughes and Associates to undertake this resource estimation work. Based on the consultant’s advice we expect to be able to announce this estimate in June. Yours faithfully, Garry Edwards The information in this report that relates to Exploration Results is based on information compiled by Denis O’Neill, who is a Member of The Australasian Institute of Mining and Metallurgy. Denis O’Neill is employed by Macmin Silver Ltd. Denis O’Neill 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’. Denis O’Neill consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 
HIGH SILVER PRODUCTION AND SILVER POWDER UPGRADED Silver Powder Production of silver powder from the Twin Hills Mine at Texas, Queensland, for the quarter to March was the highest to date, at 2,820kg (containing approx 73,000oz of silver) (December 2007 Quarter 48,000oz). In January the Company announced that it was investigating processes to upgrade the silver powder product to widen its market appeal. A successful trial has now been completed in Melbourne which has removed most of the impurities. Marketing and smelting trials of the upgraded powder will now be undertaken and approximately 3,000kg of raw powder (approx. 78,000oz contained silver) will be shipped to Melbourne to undergo the same upgrade process. Marketing and Product Development Manager, Bill Guthrie, noted that the upgrade of the powder opens up much greater marketing avenues for the Twin Hills production. Cost of the powder upgrade process is estimated at approximately 2% of the silver content value. Sales of powder in raw form continue, with orders for 800kg of powder (approximately 21,000oz contained silver) currently being prepared for consignment. Electrowinning
Crushing Circuit
Merrill Crowe Plant
Tally Ho Project Resource Estimate
Opes Prime
Based on information obtained from the Receiver and Manager of OPES, less than 0.01% of Macmin’s securities on issue were the subject of agreements between OPES and its customers. Yours faithfully, Garry Edwards
ALLOTMENT OF SECURITIES The Directors advise that the under the terms and conditions of the Convertible Note funding announced on 19th September 2007, the Company has issued the subscriber a total of 5,000,000 48 cent unlisted non transferable Options exercisable on or before 9 November 2012. The Company has also issued a total of 1,058 fully paid ordinary shares at $0.25 per share pursuant to the exercise of MMNO listed options. An Appendix 3B form (New issue announcement, application for quotation of additional securities and agreement) detailing the issue is attached. Yours faithfully, Garry Edwards
ALLOTMENT, ENTITLEMENTS ISSUE As advised to ASX on 22 February 2008, the Entitlements Issue (Prospectus dated 20 December 2007) that closed on Wednesday 20 February 2008 received applications for 17,791,943 shares with 8,895,941 free attaching options, raising a total of $3,558,388.60. An interim allotment of 7,088,400 shares and 3,544,200 options was processed on 6 February 2008. A final allotment of 10,703,543 shares and 5,351,741 options has been processed today and holding statements will be despatched today as scheduled. An Appendix 3B in relation to the Entitlements Issue was lodged on 20 December 2007.
Yours faithfully, Garry M. Edward CHIEF EXECUTIVE OFFICER ENTITLEMENTS ISSUE RAISES $3.5 MILLION The Entitlements Issue (Prospectus dated 20 December 2007) that closed on Wednesday 20 February 2008 received applications for 17,791,943 shares, with approx. 8,895,971 (subject to rounding) free attaching options, raising a total of $3,558,388.60. An interim allotment of 7,088,400 shares and 3,544,200 options was processed on 6 February 2008. The final allotment of 10,703,543 shares and approx. 5,351,771 options will be processed on 27 February 2008, subject to clearance of funds. Holding statements will be despatched by the Share Registry the same day. The capital raised will enable the Company to increase production at the Twin Hills Silver Mine and fund exploration/mine development activity in the areas surrounding the Twin Hills Silver Mine and in new prospective areas such as Tally Ho. Appendix 3Y Change of Directors Interest Notices� for 3 directors are attached. Bob McNeil, Chairman, commented �These funds further enhance Macmin�s financial position and will assist in the completion of the Twin Hills Mine plant upgrade and increased exploration in the Texas area and at Tally Ho. The plant upgrade, which is underway, is expected to lead to substantially increased silver powder production by the end of the second quarter 2008. Macmin�s associate company, New Guinea Gold Corporation (NGG), in which Macmin owns 17.8 million shares, is also in a strong financial position with increasing gold production in Papua New Guinea and having raised approximately CAD$8 million since 1st January 2008 by exercise of warrants. NGG�s share price closed at approximately AUD$0.50 on 21st February 2008. I would also like to thank shareholders who subscribed to the issue for their ongoing support for the Company.� Yours faithfully, Garry M. Edward CHIEF EXECUTIVE OFFICER
APPENDIX 3Y - CHANGE OF DIRECTOR'S INTEREST NOTICE - DENIS MICHAEL O'NEILL APPENDIX 3Y - CHANGE OF DIRECTOR'S INTEREST NOTICE - ROBERT DONALD MCNEIL ROCK CHIP SAMPLES TO 1,660g/t SILVER, 8.19g/t GOLD AND 13.55% LEAD AT RIVERTREE Rivertree is located in northern NSW, Australia and forms part of a joint venture between Macmin (75%) and Malachite Resources NL (25%). Stream Sampling Results from the stream sediment sampling programme completed late last year have recently been received. The results highlight a north-east trending zone approximately 3km wide and 8km long of coincident metal anomalism associated with the historic lodes and workings of the Rivertree mineral field. Areas outside of this zone have returned low order metal values. One stream on the southern margin of the northeast trending zone, which drains an area of no known historic workings has returned a very anomalous gold result of 256ppb (the next highest gold result being 61ppb coming from an area of historic workings). Within the dataset gold values greater than 10ppb are considered to be highly anomalous, and have only been returned (other than the above discussed sample) from streams which drain areas of known historic workings. Follow-up stream sediment sampling, rock chip sampling and prospecting will be undertaken in this area over the coming months. Rock Sampling As part of the above stream sediment sampling programme, a number of rock chip samples were also collected; some from historic workings/lodes and others from previously un-sampled areas. The best results are displayed in Table 1, with the best silver result of 1660g/t coming from the Phoenix North workings and the best gold result of 8.19g/t coming from the Phillipines Lode. Table 1: Rock chip samples with Silver values >30g/t and Gold values >0.5g/t
There are at least 8 workings/diggings, over a strike length of 700m associated with the Phillipines Lode. All samples from these have returned very encouraging silver and gold values, with some samples also showing strong zinc and lead values (samples numbers 100206, 100207, 100209 & 100210). One sample collected from the Phoenix North workings has returned an extremely strong silver value of 1660g/t, with a second sample returning strong values for both silver (701g/t) and gold (5.07g/t). In the coming months further prospecting and mapping of these areas will be undertaken with the view to drill test these prospects and the Big Block prospect. The Company Macmin Silver Ltd is a silver focused company that has been listed on the ASX since 1993, whose primary projects are the Texas Silver Project, South-East Queensland, Australia where the Twin Hills Silver Mine is located, and the Tally Ho and Mt Scott Projects near Mackay, Central Queensland. The Company aims to utilise its accumulated knowledge and skilled team of staff to consolidate a position as the premier silver focussed company in Australia. This objective is based on our belief that rising silver prices herald a recognition that silver in the 21st Century will be a fundamental metal in technological advances and an important investment asset. Macmin has exposure to gold by way of an 14% equity in New Guinea Gold Corporation (NGG) and a 1% NSR royalty on production by NGG.� In addition, Macmin maintains equity investments in junior Australian explorers, Malachite Resources NL and Frontier Resources Ltd. Further information is available at www.macmin.com.au. Yours faithfully, MACMIN SILVER LTD
Garry M. Edward CHIEF EXECUTIVE OFFICER Stream & Rock Sampling & Assaying Details Stream sediment samples consist of approximately 100g of 180�m material collected from the fine silt fraction of the active drainage. Rock samples are typically 1-2kg in size. Assaying is carried out by ALS Chemex in Brisbane using an aqua regia digest which is analysed with the ICP technique for silver, copper, lead, zinc, arsenic and antimony and analysed by the ICPMS technique for Gold. The information in this report that relates to Exploration Results is based on information compiled by Denis O’Neill, who is a Member of The Australasian Institute of Mining and Metallurgy. Denis O’Neill is employed by Macmin Silver Ltd.
PROSPECTIVE AREA AT TALLY HO SUBSTANTIALLY ENHANCED Macmin Silver Ltd has recently engaged Groundwork EMS Pty Ltd, a resource consultancy based in Brisbane, to complete a resource estimate at our Tally Ho Project. This work will utilise drilling data generated from our programmes completed in 2006/2007 [Figure 1]. Groundwork EMS Pty Ltd has given an undertaking to have this work completed by the end of March 2008 and will employ suitably qualified staff to complete the resource estimate in accordance with the guidelines of the JORC Code (2004). It should be pointed out that the area on which the resource estimation will be conducted only represents a small portion of the total area which has been subjected to the recent soil sampling and mapping (ASX release dated 16 January 2008). The geochemical survey and mapping have significantly expanded the prospective area of interest and identified additional zones of coincident metal anomalism of similar magnitude to that seen over the central Tally Ho prospect (the area drilled to date) thus providing drill targets to be drill tested once the wet season has abated. Recently received rock chip results from newly identified outcrops of breccia have also returned some very encouraging results. Table 1 displays results of rock chip samples with greater than 1g/t silver. Samples (650977, 650978, 650981 & 650982) collected 750m south-west of the drill area have similar magnitude silver values but much stronger gold values (up to 2.58g/t gold) to that seen in samples returned from the central Tally Ho prospect area. This area along with a number of coincident soil anomalies, as mentioned above will be drill tested once the wet season is over. Additional mapping, soil sampling and rock chip sampling will also be carried out beyond the area sampled and mapped to date. Yours faithfully, MACMIN SILVER LTD
Garry M. Edward CHIEF EXECUTIVE OFFICER TABLE 1 : Rock chip samples with silver values greater than 1 g/t
Rock Sampling & Assaying Details Rock samples are typically 1-2kg in size. Assaying is carried out by ALS Chemex in Brisbane using an aqua regia digest which is analysed with the ICP technique for silver, copper, lead, zinc, arsenic and antimony and analysed by the ICPMS technique for Gold
LETTER TO SHAREHOLDERS The following letter will be printed and mailed to shareholders. Dear Shareholder, I have enclosed an ASX Release dated 7th February 2008 which summarises progress in the silver production upgrade at the Twin Hills Silver Mine . As you are probably aware the Macmin Silver Entitlements Issue closes on 20 February 2008.� We do not intend to extend this closing date.� The purpose of the Entitlements Issue and the Convertible Note referred to in the ASX Release is two-fold: I suggest you read the prospectus for the Entitlements Issue (see www.macmin.com.au or call Coralie on (07) 5592 2274 to receive another copy) and that you can see your way clear to subscribe. I am aware that shareholders have been very supportive in the past and I hope you will support us again now to enable your Company to be successful at both silver mining and further exploration/development. I will be personally supporting the Issue as will some of the other directors and senior management. Again, thank you for your support, it is much appreciated. Yours sincerely, MACMIN SILVER LTD R.D.McNeil CHAIRMAN FUNDING TO ASSIST IN SILVER PRODUCTION UPGRADE As reported on the 15th October 2007, the plant commissioning process in 2007 revealed a number of areas where further capital would need to be deployed before the stated silver production could be achieved. 1. Crushing and Screening Upgrade The initial upgrade, announced 19th December 2007 is on schedule for completion in May 2008. Originally, it was anticipated that this upgrade could be achieved by March 2008, but the tight market for such equipment meant the completion date was unfortunately pushed out to May 2008. A senior crushing expert, supplied by the crushing upgrade contractor, will commence duties on site this week. In addition to preparing for the installation of the initial upgrade, he will review existing crushing operations with the objective of increasing the crushing rate using the existing crushing circuit. When sufficient funds are available a further upgrade to allow production to exceed 180,000ozs silver/month may be implemented. 2. Silver Powder Production Silver powder is produced by an electrowinning process (EM-EW Plant) from “pregnant” solutions derived from the heap leaching extraction process of the silver ore.� The heap leach process produces solutions which contain between 50 and 150g/t silver, depending on the grade of ore and the length of time a heap has been leached. Commissioning of the EM-EW plant resulted in a number of modifications which, coupled with running the plant on a 24 hour/7 day schedule, has led to considerable improvement in silver powder production. As announced on 19th December 2007, to strip the remaining silver (less than 50g/t solution from the pregnant solutions after electrowinning), a Merrill Crowe plant is being installed. This should allow the pregnant solution to be stripped to less than 10g/t before being re-circulated through the heap. The construction of the first module of the Merrill Crowe plant is on schedule for completion in March 2008, which will be followed by commissioning. 3. Additional Leach Pads A new pad for approximately 400,000t of ore is approaching completion and loading will begin in the near future. The existing pad, to a height of 8m, has a capacity of 200,000t of ore. Both pads can hold more ore than the figures above as it is anticipated they will be extended to their approved height of 16m. 4. Silver Powder Sale Approximately 2,650kg of silver powder, estimated to contain 69,000ozs of silver has been produced. The silver powder is a unique product and can be immediately sold for some applications. However, to obtain maximum benefit and price for the product, the Company is conducting further tests to determine possible upgrading processes for the silver powder. To date 15,500ozs of silver have been sold and further sales will be made in the near future. As mentioned above, in addition to the 69,000ozs of silver produced, a further 39,000ozs of silver are in solution at site and it is anticipated most of this silver will be recovered through the Merrill Crowe plant. Bob McNeil commented: “The commissioning identified a number of areas where improvements were needed, some of which we are still researching. In particular it has become obvious that for the project to reach a satisfactory production rate additional capital would need to be raised and expended. This is one of the reasons for the convertible note financing and the current Entitlements Issue. The other reason is that we would, in the current high silver price regime, like to fast track some of our exploration projects in the immediate Texas area and the Tally Ho project in Central Queensland. The Entitlements Issue to shareholders gives existing shareholders access to additional equity in Macmin at a reduced share price. The Company is in a sound financial position and expects to achieve the stated plant upgrade by May 2008. Once this upgrade is commissioned the Company will consider a further upgrade to raise production levels above 180,000 ozs/month of silver. The silver price continues to enhance the project with the current price in Australian dollars at a 27 year high.” The Company Macmin Silver Ltd is a silver focused company that has been listed on the ASX since 1993, whose primary projects are the Texas Silver Project, South-East Queensland, Australia where the Twin Hills Silver Mine is located, and the Tally Ho and Mt Scott Projects near Mackay, Central Queensland. The Company aims to utilise its accumulated knowledge and skilled team of staff to consolidate a position as the premier silver focussed company in Australia. This objective is based on our belief that rising silver prices herald a recognition that silver in the 21st Century will be a fundamental metal in technological advances and an important investment asset. Macmin has exposure to gold by way of an 14% equity in New Guinea Gold Corporation (NGG) and a 1% NSR royalty on production by NGG. In addition, Macmin maintains equity investments in junior Australian explorers, Malachite Resources NL and Frontier Resources Ltd. Further information is available at www.macmin.com.au. Yours faithfully,
Garry M. Edward CHIEF EXECUTIVE OFFICER INTERIM ALLOTMENT, ENTITLEMENTS ISSUE Pursuant to the Entitlements Issue (prospectus dated 20 December 2007), an interim allotment, to those shareholders who applied for New Shares prior to 5pm on 30 January 2008, of 7,088,400 shares and 3,544,200 free attaching 25 cent, 30 October 2008 options has been processed today. These securities are not able to trade until 21 February (on a deferred settlement basis). Holding statements will be despatched today. An Appendix 3B in relation to the Entitlements Issue was lodged on 20 December 2007. A final allotment of securities, for those shareholders who apply for New Shares between 31 January and 20 February 2008, pursuant to the Entitlements Offer, will be processed on 27 February 2008. Yours faithfully,
Garry M. Edward CHIEF EXECUTIVE OFFICER FINANCIAL REPORT FOR THE QUARTER ENDED DEC 2007
ALLOTMENT OF SECURITIES The Directors advise that the Company has issued a total of 5,066 fully paid ordinary shares. The shares were issued as follows: An Appendix 3B form (New issue announcement, application for quotation of additional securities and agreement) detailing the issue is attached. Yours faithfully, Garry M. Edward CHIEF EXECUTIVE OFFICER REVISED TIMETABLE FOR ENTITLEMENTS ISSUE As previously advised, the Entitlements Offer dated 20 December 2007, which was scheduled to close on 30 January, has been extended to close on Wednesday 20 February 2008. A revised timetable is as follows: Allotment of New Shares and New Options applied for prior to 30 January* 6 February 2008 Entitlement Issue Closes: 20 February 2008 Last day for allotment of New Shares and New Options: 27 February 2008 Despatch of holding statements for New Shares and Options : 27 February 2008 Normal trading commences for New Shares and New Options on ASX: 28 February 2008
*New Shares and New Options allotted on 6 February 2008 are not able to trade until 21 February (on a deferred settlement basis). Yours faithfully,
Garry M. Edward CHIEF EXECUTIVE OFFICER EXTENSION OF OFFER CLOSING DATE The Entitlements Offer dated 20 December 2007, which was scheduled to close on 30 January, has been extended to close on Wednesday 20 February 2008. Extreme overall market conditions have overshadowed the rising silver price and an extension will allow investors further time to assess the offer, hopefully in a more stable market context. All applications received by 30 January will be processed in the interim, and the shares with free attaching options will be allotted within the original timeframe. Yours faithfully,
Garry M. Edward CHIEF EXECUTIVE OFFICER
The following letter will be printed and mailed to shareholders. Dear Shareholder
By now you should have received a prospectus and entitlements form in relation to the issue which will close on 30 January 2008. The new shares have been offered at a discount to market and the issue includes the added incentive of one free option for every two new shares subscribed for. I believe the pricing of the offer represents a favourable opportunity for existing shareholders to participate further in the future of the Company at a time when the price of silver is at a 27-year high and the outlook for silver in 2008 is very positive. In this context, I encourage you to take up your entitlement and to consider applying for shares in excess of your entitlement. A copy of the December Quarterly Report* is attached for your information. If you have not received an offer document please call Registries Limited on +61 (0) 2 9290 9600 to have a replacement copy mailed to you. Yours faithfully,
Garry M. Edward CHIEF EXECUTIVE OFFICER
SUMMARY TEXAS PROJECT Mt Gunyan Prospect Macmin Silver Ltd has recently received assay results for 4 drill holes as part of our ongoing resource definition drilling programme at Mt Gunyan. Diamond drilling in the northern portion of the Mt Gunyan prospect has confirmed the previously interpolated strike length of the northern mineralised zone. Highlights of the drill holes are as follows: MGD004 2m (16-18m) @ 106g/t silver and 0.16% lead 1m (95-96m) @ 116 g/t silver and 3.16 g/t gold MGD007 6m (40-46m) @ 60 g/t silver, 0.1g/t gold, 0.14% lead and 0.11% zinc Table 1 shows the better results from the four holes. Further drilling, targeting the shallow areas of mineralisation at Mt Gunyan, will be ongoing in the January-March 2008 quarter. The style of mineralisation encountered in the shallow areas of the Mt Gunyan prospect show some similarities to the ore material currently being mined at Twin Hills. Follow-up deep diamond drilling targeting the massive sulphide mineralisation recently encountered at Mt Gunyan (ASX release dated 13 November 2007) is also planned for the upcoming quarter. TABLE 1 Best Intercepts
TABLE 2 Hole locations for Table 1 data.
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