1 - Organization

The iShares^® Silver Trust (the "Trust") was organized on April 21, 2006 as a New York trust. The trustee is The Bank of New York Mellon (the "Trustee") which is responsible for the day to day administration of the Trust. The Trust's sponsor is BlackRock Asset Management International Inc. (the "Sponsor"), a Delaware corporation. The Trust is governed by the Depositary Trust Agreement (the "Trust Agreement") executed at the time of organization of the Trust by the Trustee and the Sponsor. The Trust issues units of beneficial interest (or "Shares") representing fractional undivided beneficial interests in its net assets.

The objective of the Trust is for the value of the Shares to reflect, at any given time, the price of silver owned by the Trust at that time, less the Trust's expenses and liabilities. The Trust is designed to provide a vehicle for investors to own interests in silver bullion.

1A - Restatement of Financial Statements

In response to an inquiry from the staff of the Division of Corporation Finance of the Securities and Exchange Commission, the Trust reconsidered its application of its policy for accounting for silver bullion (see Note 2B) in 2008 and 2009 relative to market fluctuations in the value of silver between those two years. In 2008, the Trust recorded a market value reserve of $571.784 million which represented the amount by which the market value of silver held in inventory by the Trust was lower than average cost as of December 31, 2008. In 2009, the Trust recorded a market value recovery by the same amount, to reflect a corresponding increase in the market value of silver in 2009. However, as the market value of silver had begun to recover prior to the date the Trust issued its annual financial statements for 2008, and there was no clear evidence that the Trust would sustain a loss, the Trust should have reflected the full amount of the market value recovery in 2008. Consequently, the Trust should not have reflected any market value reserve for the year ended December 31, 2008, or any market value recovery for the year ended December 31, 2009. The Trust has restated its financial statements for the years ended December 31, 2008 and 2009 to correct this misapplication of accounting policy.

The effect of the restatement described above on the Trust's financial statements is as follows:

		$(603,345)			$(603,345)			$(603,345)			$(603,345)
	For the year ended December 31,
(Dollar amounts in 000's, except for per Share amounts)	2009						2008
	(As originally reported)			(As restated)			(As originally reported)			(As restated)
Income Statements
Market value reserve	$	—		$	—		$	(571,784	)	$	—
Market value recovery	$	571,784		$	—		$	—		$	—
Net income (loss)	$	574,523		$	2,739		$	(603,345	)	$	(31,561	)
Net income (loss) per Share	$	2.07		$	0.01		$	(3.07	)	$	(0.16	)
Statements of Changes in Shareholders' Equity (Deficit)
Shareholders' equity (deficit) - beginning of period	$	—		$	571,784		$	(387,329	)	$	(387,329	)
Net income (loss)	$	574,523		$	2,739		$	(603,345	)	$	(31,561	)
Shareholders' equity (deficit) - end of period	$	(975,307	)	$	(975,307	)	$	—		$	571,784
Statements of Cash Flows
Net income (loss)	$	574,523		$	2,739		$	(603,345	)	$	(31,561	)
Market value reserve (recovery)	$	(571,784	)	$	—		$	571,784		$	—