Dear Shareholder,

I am pleased to provide an exploration and corporate update for Silver Bull Resources.

This past year has seen a significant increase in the volatility and uncertainty of the global markets which has overshadowed the strong progress the Silver Bull team has made in advancing our flagship silver-zinc project at Sierra Mojada, Mexico.

Much has happened since my stepping into the role of CEO in February 2011, we have;

Technical Achievements

• Released three NI43-101 resource updates over a period of 12 months, increasing the size of the silver resource to 72.1Moz silver in the “measured and indicated” category, and 10.4 Moz of silver in the “inferred” category. On average we have increased the silver resource approximately 40% every 6 months.


• Discovered the “Centenario Zone”, a new zone of silver mineralization with numerous intercepts over 100 meters in length and containing shorter intervals grading up to 417g/t silver.


• Discovered a structurally controlled massive sulphide zone which recorded 16.98% zinc, 5.45% lead, and 57g/t silver over 8.45 meters.


• Increased the understanding of the genesis of the mineralization seen at Sierra Mojada allowing us to better model the deposit and to better identify areas with high prospectivity for exploration.


• Began a significant metallurgy program lead by our Vice President of Metallurgy George Rawsthorne. The goal of this program will be to test the silver for heap and agitation cyanide leach methods. We will also look to see how any low grade zinc (<1%) which reports with the silver mineralization can be recovered.


• Completed a first phase regional reconnaissance of other promising prospects in the area.

Corporate Achievements

• Developed an excellent team of individuals who continue to push the technical and corporate program forward, and instilled a strong culture of professionalism and health and safety.


• Negotiated option agreements with various mineral claim owners, tying together the patch work of mineral titles in the area to allow the development of the mineralization at Sierra Mojada.


• Strengthened ties with the local communities and provided support to local Ejido farmers by providing water for their livestock (the area has been in drought for over 3 years now). We also remain the largest employer of local people in the area.


• Successfully began to collect historical value added tax balances from the Mexican government.


• Streamlined the corporate structure of the company in Mexico.

Project Update
During 2011 the company completed approximately 40,000m of surface drilling at Sierra Mojada targeting the Shallow Silver Zone. In addition to the continued expansion of the Shallow Silver Zone the team onsite also made the “Centenario Zone” discovery, a zone of silver mineralization with numerous intercepts over 100 meters in length and containing shorter intervals grading up to 417g/t silver lying approximately 300 meters to the north of the Shallow Silver Zone. Much of the 18,000 meter surface drill program in 2012 has focused on better defining the Centenario Zone, however a number of exploratory holes testing the extensions to the Shallow Silver Zone have also been drilled this year. This has led to another new discovery of a structurally controlled massive sulphide zone. The extent of this zone has not yet been determined and remains an exciting exploration target for the near future.

On July 6, 2012 the company filed an updated NI43-101 Technical Report — our third on the project in just over a year. SRK Consulting Ltd. (Canada) “SRK” defined a silver resource at the Shallow Silver Zone of 72.1Moz silver + 997Mlbs zinc in the Measured & Indicated categories and 10.4Moz silver + 108Mlbs zinc in the Inferred category. This represented a 39% increase in the open pittable silver resource from the previous NI43-101 update released in November 2011.

SRK also reported an additional “zinc exploration target” ranging between 4 million tonnes grading 8.4% zinc and 6 million tonnes grading 8.0% zinc which sits directly below and adjacent to the Shallow Silver Zone.

One of the results of the latest NI43-101 report was the severe restrictions placed on the 2,700 historical long holes and 10,000 historical channel samples by SRK due to the potential for sample contamination by this style of sampling. This is significant as the long holes and the channel samples appear to define a 500 meter long “high grade” silver zone and a 1,500 meter long “high grade” zinc zone at the eastern end of the deposit that is not fully reflected in the current resource estimate.

The Road Forward for the Next Six Months

In light of the poor market conditions, we have made the decision to slow the spending of the treasury and focus on “high value — low cost” targets. Consequently we have put our surface drill program on hold and will focus on the high grade silver and zinc mineralization defined by the long hole and channel sample dataset which was severely restricted in the last resource report by SRK.

After discussion with SRK it has been agreed that by “twinning” a number of these long holes with the more reliable “core” drilling method and then comparing and confirming the assay results with nearby long holes we expect to increase the confidence of the entire historical long hole data set. This confirmation would allow SRK to give the long holes a much wider sphere of influence in a future resource update.

Our plan for the next 6 months will be to complete a 3,000 meter underground drill program “twinning” a selection of long holes for a direct assay comparison. To do this we will use our own “Termite” drills which can drill 40-50 meter long holes of “BQ” core — a full summary of this program is given in Silver Bull’s June 12, 2012 news release. It is likely this program will be extended to parts of the high grade zinc zone defined by the historical long hole and channel samples.

When we consider that the drills will be starting off underground in high grade silver mineralization, and drilling in an area with a tremendous amount of historical work which already defines this zone we see this as a very low risk program which should both add silver ounces to the deposit and increase the overall grade within the Shallow Silver Zone. The three goals of this program are 1) increase the confidence of the 2,700 long hole data set 2) define the extents of the ore body by drilling through the known mineralization and ending drilling in unmineralized rock and 3) infill any gaps we have in the historical data set. This will also be extremely cost effective as we will be using our own drills to do this work and there is very little preparation that needs to be done to access the underground workings

We expect to have an updated 43-101 resource estimate completed in the first half of 2013 which will incorporate the results of the drill program outlined above. At this point it is likely we will move into a preliminary economic assessment of the project.

In addition to this drill program, our VP Metallurgy, George Rawsthorne is concurrently pushing forward our metallurgical program. This program will focus on three things 1) silver metallurgy 2) zinc metallurgy 3) metallurgy of a mixed zone which contains both silver and zinc. George brings a wealth of knowledge and experience to our team and we are looking forward to developments of this program as the year goes on.

The company has also placed a strong emphasis on marketing in 2012/2013. We have brought on Matt Hallaran to lead the charge on Investor Relations. Since coming onboard Matt has redesigned the corporate website, which can be viewed at www.silverbullresources.com, significantly upgraded the corporate presentation and completed a corporate video to assist us in telling the Silver Bull story. Moving forward, our team will be actively attending conferences and conducting regular roadshows throughout the remainder of the year to raise awareness of the company to both institutional and retail investors.

Outlook

We at Silver Bull remain extremely bullish on the fundamentals for both silver and zinc. There is no doubt the world’s financial troubles will not go away anytime soon and silver (along with gold) will continue to be a haven for wealth preservation. Furthermore, with the imminent closing of a number of major zinc mines expected in the next 3 years, coupled with both a lack of new zinc mines coming on line to replace this lost production and an expected increase in zinc demand we see a tightening in the zinc supply over the short to medium term.

At Sierra Mojada we are fortunate to have exposure to both the precious and base metal space. In addition to the growing silver resource, Silver Bull controls a very significant zinc resource sitting less than 500 meters from a functioning railway – there are not many of these deposits in the world!

It is also not insignificant that many countries around the world are becoming less and less viable for mining and exploration activities due to increasing political risk. Mexico, however, is not one of these countries and remains one of the top mining jurisdiction in the world. With the recent election of a “mining friendly” President this is not likely to change.

In Summary

The Sierra Mojada Project has made huge strides forward:

• We have money in the bank – US $5 million in the treasury.


• We have a top notch management team and Board of Directors — please see our website at www.silverbullresource.com for bio’s.


• We are in a great mining jurisdiction – Mexico.


• We have excellent infrastructure including; a paved road to site, railway to site, grid power close by and 5 water wells owned by the company.


• We have a growing silver and zinc resource — on average a 40% increase in the resource every 6 months and mineralization remains open in all directions.


• We have excellent exploration upside — this is a large mineralizing system, much of which remains unexplored with modern techniques.

I would like to take this opportunity to thank you for your ongoing support of Silver Bull Resources. We invite you to stay informed about Silver Bull by updating us with your contact information on the attached form. Alternatively, we invite you to contact us by email at [email protected] or by calling 1-604-687-5800.

On behalf of the Board of Directors

“Tim Barry”


Tim Barry, MAusIMM

Chief Executive Officer, President and Director

Cautionary Note to U.S. Investors concerning estimates of Measured, Indicated and Inferred Resources: This document uses the terms “measured resources”, “indicated resources”, and “inferred resources” which are defined in, and required to be disclosed by, NI 43-101. We advise U.S. investors that these terms are not recognized by the United States Securities and Exchange Commission (the “SEC”). The estimation of measured and indicated resources involves greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. U.S. investors are cautioned not to assume that indicated mineral resources will be converted into reserves. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. U.S. investors are cautioned not to assume that estimates of inferred mineral resources exist, are economically minable, or will be upgraded into measured or indicated mineral resources. Under Canadian securities laws, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies.

Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations, however the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measures. Accordingly, the information contained in this press release may not be comparable to similar information made public by U.S. companies that are not subject NI 43-101.

Cautionary note regarding forward looking statements: This news release contains forward-looking statements regarding future events and Silver Bull’s future results that are subject to the safe harbors created under the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”) and applicable Canadian securities laws. Forward-looking statements include statements regarding measured, indicated and inferred resource estimates, the ability to increase the confidence of the long hole data set, the ability to increase the resource and overall grade at the Sierra Mojada project, the ability to delineate a zinc resource in the zinc exploration target, the ability to collect value added taxes in Mexico, the completion of a preliminary economic assessment, the timing of Silver Bull’s next resource update, the level of political risk in Mexico and the ability to find a suitable metallurgical process to extract both the silver and zinc on a large scale basis. These statements are based on current expectations, estimates, forecasts, and projections about Silver Bull’s exploration projects, the industry in which Silver Bull operates and the beliefs and assumptions of Silver Bull’s management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words, and similar expressions, are intended to identify such forward-looking statements. Forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, including such factors as the results of exploration activities and whether the results continue to support continued exploration activities, unexpected variations in ore grade, types and metallurgy, volatility and level of commodity prices, the availability of sufficient future financing, and other matters discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2011 and our other periodic and current reports filed with the SEC and available on www.sec.gov and with the Canadian securities commissions available on www.sedar.com.Readers are cautioned that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those expressed or implied in the forward-looking statements.