Disposals

SILVERMINES GROUP PLC
23 September 1999

                             Silvermines Group plc
                                       
                   Disposal of the UK Aerospace Division and 
                       Disposal of the Electrical Division

Introduction

Silvermines Group plc ('Silvermines' or 'the Company') announces proposals 
to dispose of the Group's UK Aerospace Division and its Electrical Division.

The Company has conditionally agreed to dispose of the UK Aerospace Division
to Esterline Technologies Limited (a wholly owned subsidiary of Esterline
Technologies Corporation) for £12.8 million, comprising consideration of 
£10.8 million  payable in cash on completion of the sale and repayment on
completion of indebtedness due to the Group of £2.0 million in respect of a 
pre-sale dividend.

The Company has also conditionally agreed to dispose of the Electrical
Division to its management for £5.5 million, comprising consideration of
£1.875 million, to be satisfied as to £1.525 million in cash on completion 
and as to £0.35  million  by the issue of interest free, unsecured  loan 
stock, repayable at par on 30 June 2000, and repayment on completion of
indebtedness due to the Group of £3.625 million, of which £3.5 million 
relates to a pre-sale dividend.

In view of their size and the fact that the disposal of the Electrical
Division is a related party transaction, each of the disposals is conditional
upon the approval of shareholders.

An Extraordinary General Meeting will be convened to seek the approval of
shareholders for the disposals.

Information on the UK Aerospace Division

The UK Aerospace Division consists of two companies: Muirhead Vactric
Components Limited ('MVCL')and Norcroft Dynamics Limited ('NDL'). Within
these companies there are two businesses: motion technology and avionics  
and accessories.

The motion technology business designs, manufactures and supplies electro-
mechanical, electro-optical servo-components providing signals of angular  
and linear position, velocity, direction and displacement. The avionics and
accessories business provides maintenance, repair, overhaul, modification  
and calibration for avionics equipment.

For the year ended 31 December 1998, the UK Aerospace Division reported  
pre-tax profit of £1.6 million (1997: £3.9 million), on turnover of £25.3
million (1997: £18.0 million). The net assets at the date were £7.5 million. 
In the six months ended 30 June 1999, the UK Aerospace Division made an
unaudited pre-tax profit of £12,000 (1998: £1.3 million) on turnover of 
£9.3 million (1998:£13.1  million). Unaudited net assets at that date were
£7.0 million after payment of an inter-company dividend.

Reasons for the Aerospace Disposal

The disposal of the UK Aerospace Division is part of Silvermines' strategy  
to dispose of non-core activities.  This reflects Silvermines' view that  
the aerospace industry as a whole is currently undergoing consolidation
particularly amongst the supplier base.  In the opinion of the Board, there
are many small aerospace component manufacturers in a market that remains
competitive.  This has been reflected in the UK Aerospace Division,in a slow
down in orders and reduced trading results.

Aerospace Sale Agreement

The Company has conditionally agreed to dispose of the UK Aerospace  
Division to Esterline Technologies Limited by way of the sale of the entire 
issued share capitals of MVCL and NDL for £10.8 million,  payable in cash on
completion of the sale.

Under the sale agreement, Esterline Technologies Limited has agreed, on
completion of the disposal, to procure the repayment of £2.134 million of 
debt due to the Group by MVCL, £2.0 million of which arose as a result of a 
pre-sale dividend which was declared by MCVL on 10 September 1999 and 
£134,000 of which relates to other dividends, all of which remain unpaid.

Information on the Electrical Division

The Electrical Division, being Elequip Projects Limited ('Elequip'), is
engaged in the design, manufacture and installation of control equipment,
power generation and distribution systems, stand-by power systems and
electrical installations principally for the automotive, oil and gas,
petrochemical and traction markets.

For the year ended 31 December 1998, the Electrical Division reported 
pre-tax profits of £1.3 million (1997:£0.95 million), after Group charges 
of £125,000 (1997 - £nil), on turnover of £27.9 million (1997:£21.0 million).
The net assets of the Elequip at that date were £6.5 million. In addition, a 
£0.6 million  revaluation of Elequip's freehold land and buildings is
reflected in the consolidated accounts of Silvermines but not reflected in 
the statutory accounts  of  Elequip.  In the six months ended 30 June 1999, 
the Electrical Division made an unaudited pre-tax profit, prior to Group
charges, of £83,000 (1998: £0.6 million) on turnover of £9.7 million (1998:
£12.5 million). The unaudited net assets being disposed of, at that date, 
were £7.0 million (including the £0.6 million land and buildings revaluation
reflected in the Group's accounts).

Reasons for the Electrical Disposal

The disposal of the Electrical Division recognises the Board's  view of the
cyclical nature of  the Electrical Division's markets and their continuing
competitiveness.  The Board considers that the opportunity for growth in 
these markets is limited.  The 1998 results of the Electrical Division
reflected major contracts secured in the previous year in the Middle East 
and in particular Egypt, including the £7.5 million Obaiyed contract.

Electrical Sale Agreement

The Company has conditionally agreed to dispose of the Electrical Division  
by way of the sale of the entire issued share capital of Elequip to a
management buy-out team which comprises Messrs. F W Hull, P G Alvey, T Ward 
and W V Matts.  Messrs  F W Hull, P G Alvey and T Ward are currently 
directors of Elequip and all the members of the management buyout team are
employees of Elequip.

The management buyout team has incorporated Foray 1237 Limited for the
purpose of making the acquisition of the Electrical Division.  Messrs F.W.
Hull, P G Alvey and T Ward, as directors of Elequip, are related parties under
the Listing Rules because together they exercise or control the exercise of 
30 per  cent. or more of the votes able to be cast at general meetings of 
Foray 1237 Limited on all, or substantially all, matters. In view of this, 
the disposal of the Electrical Division is deemed, under the Listing Rules, 
to be a related party transaction also requiring shareholder approval.

The consideration payable by Foray 1237 Limited for the share capital of
Elequip is £1.875 million, of which £1.525 million is payable in cash on
completion of the sale and £0.35 million will be satisfied by the issue by
Foray 1237 Limited on completion of interest free, unsecured loan stock.  
The loan stock will be redeemable at par on 30 June 2000.  In addition, 
Foray 1237 Limited  has agreed to procure the repayment of £3.625 million 
owed by Elequip to  the Group.  Of this indebtedness, £3.5 million arose as 
a result of a pre- sale dividend declared by Elequip on 14 September 1999 
and £125,000 relates to Group charges in 1998, both of which remain unpaid.

Use of Disposal Proceeds

The net cash proceeds from the disposals will be used to eliminate
substantially the Group's borrowings with the remaining funds put on deposit.