TREK METALS LIMITED — AGM Information 2013

Nov 21, 2013

ZAMBEZI RESOURCES LIMITED Company No. (Bermuda) 35116 ARBN 124 462 826

NOTICE OF ANNUAL GENERAL MEETING

and

EXPLANATORY MEMORANDUM TO SHAREHOLDERS

Date of Meeting

Monday, 2 December 2013

Time of Meeting

8.00 am Bermuda ADT (Atlantic Daylight Time) (8:00 pm Perth WST)

Place of Meeting

Canon’s Court

22 Victoria Street

Hamilton HM12

Bermuda

Please read this Notice and Explanatory Memorandum carefully.

If you are unable to attend the Meeting, please complete and return the enclosed Proxy Form or CDI Form of Instruction (as applicable) in accordance with the specified instructions.

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Zambezi Resources Limited Company No. (Bermuda) 35116 ARBN 124 462 826

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Shareholders of Zambezi Resources Limited (“ Company ”) will be held at Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda on Monday, 2 December 2013 at 8.00 am Atlantic Daylight Time (ADT), for the purpose of transacting the following business referred to in this Notice of Annual General Meeting.

An Explanatory Memorandum containing information in relation to the following Resolutions accompanies this Notice of Meeting.

AGENDA

ORDINARY BUSINESS

2013 Accounts

To receive and consider the financial report of the Company for the year ended 31 March 2013, and the reports by the Directors and Independent Auditors.

RESOLUTIONS

Resolution 1 – Increase of Authorised Share Capital under Bermuda Law

To consider and, if thought fit, to pass the following resolution as an ordinary resolution :

“ That, for the purposes of Section 45 of the Bermuda Companies Act 1981 and for all other purposes, approval is given for the increase of the authorised share capital of the Company by £235,000,000 from £15,000,000 (divided into 1,500,000,000 Shares of par value £0.01 each) to £250,000,000 (divided into 25,000,000,000 Shares of par value £0.01 each) by the creation of an additional 23,500,000,000 Shares of par value £0.01 each”.

Resolution 2 – Ratification of Prior Issue of Shares

To consider and, if thought fit, to pass the following resolution as an ordinary resolution .

“ That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the allotment and issue of a total of 247,428,000 Shares as set out in the Explanatory Memorandum. ”

The Company will disregard any votes cast on this Resolution by the entity or persons who participated in the issue and any of their associates. However, the Company need not disregard a vote if it is cast by: (a) a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

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Resolution 3: Consolidation of Capital

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That subject to the passing of Resolutions 1 to 2 (inclusive), in accordance with the Bermuda Companies Act 1981 and for all other purposes, the authorized share capital of the Company be consolidated on the basis that:

• (a) every one hundred (100) Shares be consolidated into one (1) Share; and

• (b) every one hundred (100) Options be consolidated into one (1) Option,

and where this consolidation results in a fraction of a Share or Option being held by a Shareholder or Optionholder (as the case may be), the Directors be authorised to round that fraction up to the nearest whole Share or Option to be issued as fully paid (paid up by the Company) bonus Shares or Options, with the Consolidation taking effect as described in the Explanatory Statement.”

Resolution 4 – Reduction of Share Capital under Bermuda Law by way of a Par Value Reduction

To consider and, if thought fit, to pass the following resolution as an ordinary resolution :

“That, for the purposes of Section 46 of the Bermuda Companies Act 1981 and for all other purposes, approval is given for:

• (i) the reduction of the par value of the Company’s authorised share capital from £1.00 (post Consolidation) to £0.01 such that the authorised share capital be reduced by £247,500,000 from £250,000,000 (divided into 250,000,000 Shares of par value £1.00 each) to £2,500,000 (divided into 250,000,000 Shares of £0.01 each); and

• (ii) the reduction of the Company’s issued share capital by £21,994,382 from £24,438,202 (divided into 24,438,202 Shares [post Consolidation] of £1.00 each) to £244,382 (divided into 24,438,202 Shares of £0.01 each).”

Resolution 5 – Election of Mr Frank Vanspeybroeck as a Director

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“ That in accordance with Bye-Law 77, Frank Vanspeybroeck be elected a director of the Company for a period of 3 years.”

Resolution 6 – Election of Mr Marinko Vidovich as a Director

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

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“ That in accordance with Bye-Law 77, Marinko Vidovich be elected a director of the Company for a period of 3 years.”

Resolution 7 – Appointment of Auditor

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“ That, Deloitte Touche Tohmatsu be and is hereby appointed as Auditors of the Company until the conclusion of the next annual general meeting at a fee to be agreed by the Directors.”

Resolution 8 – Approval of 10% Placement Capacity

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a special resolution :

“ That, for the purpose of ASX Listing Rule 7.1A and for all other purposes, approval is given for the issue of Equity Securities totaling up to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement. ”

For the purpose of Listing Rule 7.3, the Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue, a person who might obtain a benefit, except a benefit solely in the capacity of the holder of ordinary securities if the Resolution is passed, and any associates of those persons. However, the Company will not disregard a vote if it is cast by:

(a) a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

(b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

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BY ORDER OF THE BOARD

Frank Vanspeybroeck Managing Director Dated: 20.11.13

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Proxies

Registered Shareholders for the Company only can vote at the Meeting personally or by proxy, attorney or representative. A Shareholder entitled to attend and vote at the Meeting may appoint not more than two proxies to attend and vote at the Meeting. Where more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the Shareholder’s voting rights. A proxy may but need not be a Shareholder of the Company. The instrument of proxy (and the power of attorney or other authority, if any, under which it is signed) must be lodged by person, post, courier or facsimile and reach the respective offices of Computershare Services, for Australian holders not later than 8.00pm Western Standard Time on Saturday, 30[th] November 2013. For the convenience of Shareholders a Proxy Form is enclosed with Notices sent to Shareholders.

A Shareholder that is a corporation may elect to appoint a representative in accordance with the Articles of Association in which case the Company will require written proof of the representative’s appointment which must be lodged with, or presented to, the Company not later than 8.00pm Western Standard Time on Saturday, 30[th] November 2013.

CHESS Depositary Interests

Holders of CHESS Depositary Interests (“ CDI” ) are invited to attend the Meeting but are not entitled to vote at the Meeting. In order to have votes cast at the Meeting on their behalf, CDI holders must complete, sign and return the CDI Form of Instruction enclosed with the Notice sent to them to Computershare Investor Services Pty Limited, GPO Box 242, Melbourne VIC 3001, Australia or alternatively you can fax your form to (within Australia) 1800 783 447 and (outside Australia) +61 3 9473 2555, so that CDI holders can direct CHESS Depositary Nominees Pty Ltd (“ CDN ”) to vote the underlying Shares on their behalf. The CDI Form of Instruction needs to be received by not later than 8.00pm Western Standard Time on Saturday, 30[th] November 2013.

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Zambezi Resources Limited Company No. (Bermuda) 35116 ARBN 124 462 826

EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared for the information of Shareholders of Zambezi Resources Limited (“ Zambezi ” or “ Company ”) in connection with the business to be conducted at the Annual General Meeting of the Company to be held at Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda on Monday, 2 December 2013 commencing at 8.00 am ADT and 8.00 pm WST (Perth) .

This Explanatory Memorandum should be read in conjunction with the accompanying Notice of Annual General Meeting. The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Annual General Meeting.

1 RESOLUTION 1 – INCREASE OF AUTHORISED SHARE CAPITAL UNDER BERMUDA LAW

Clause 52.3 of the Company’s Bye-Laws and Section 45(1)(a) of the Bermuda Companies Act permits the Company to increase its share capital if authorised by a resolution of the Shareholders.

Resolution 1 seeks Shareholder approval to increase the authorised share capital of the Company from 1,500,000,000 Shares to 25,000,000,000 Shares.

The Company currently has 2,433,467,216 Shares and 36,500,000 Options on issue.

If Resolution 1 is passed, the Company is able to issue up to 23,500,000,000 Shares (pre Consolidation). If all of these Shares are issued and all of the current Options on issue are exercised, the number of Shares on issue would exceed the number of Shares permitted under the Company’s current authorised share capital.

The Directors consider that the proposed increase in the Company’s authorised share capital is appropriate in order to allow the Company to create capacity for the Company to issue securities if required in the future within its authorised capacity.

Shareholders should note that the concept of the Company’s authorised share capital is a Bermuda law concept and is mutually exclusive from the ASX Listing Rules. Any future issues of securities made by the Company will still be subject to ASX Listing Rule 7.1.

Directors' recommendation

The directors of the Company recommend that shareholders vote in favour of Resolution 1.

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2 RESOLUTION 2 – RATIFICATION OF PRIOR ISSUE OF SHARES

2.1 Proposed subsequent shareholder approval

Listing Rule 7.1 imposes a 15% cap on the number of new securities that a company can issue over any 12 month period without shareholder approval ( 15% Placement Capacity ). ASX Listing Rule 7.4 allows a company to seek the subsequent approval of shareholders for an issue of securities that was made within the Company’s 15% Placement Capacity. Shareholder approval of securities issued under the Placement refreshes the Company's 15% annual capacity to raise additional capital without the need to obtain shareholder approval. This provides additional funding flexibility for the Company.

2.2 Effect of the proposal

If Resolution 2 is approved, the Company will not have to count the securities issued under the Placement towards its 15% Placement Capacity. Accordingly, if Resolution 2 is passed, the Company's annual capacity to issue capital within its 15% Placement Capacity (in respect of the Placement, being 247,428,000 Shares) will be refreshed. The Directors of the Company consider it prudent to maintain such funding flexibility as part of the Company’s capital management strategy.

If Resolution 2 is not approved, it will have no effect upon the Shares issued. However the Shares will count towards the Company’s 15% Placement Capacity. For the purpose of ASX Listing Rule 7.5, details of the issues are set out below.

The Company issued 247,428,000 Shares (on a pre-Consolidation basis or 2,474,280 Shares on a post-Consolidation basis) as follows:-

• (a) the Company issued 168,900,000 Shares to Mr Robert John McPherson;

• (b) the Company issued 68,175,000 Shares to Mr Willie Rutherlain Sweta; and

• (c) the Company issued 10,353,000 Shares to Mr Borniface Ng’uni;

• (d) the Shares were issued at an issue price of $0.001;

• (e) the Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing shares.

2.3 Use of funds raised

The funds raised from the Placement were used for general working capital purposes, to specifically repay existing aged creditors and monthly overhead obligations and commitments by the Company.

Directors’ Recommendation

In order to ensure that the Company has adequate funding flexibility, the Directors unanimously recommend that Shareholders vote in favour of Resolution 2.

The Directors unanimously recommend that Shareholders vote in favour of Resolution 2.

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3 RESOLUTION 3 – CONSOLIDATION OF CAPITAL

3.1 Background

The Directors are seeking Shareholder approval to consolidate the number of Shares and Options on issue on a one (1) for one hundred (100) basis ( Consolidation ).

The purpose of the Consolidation is to reduce the number of Shares and Options on issue, to correspondingly increase the imputed value of each Share and Option, to make the investment in the Company’s securities more attractive to institutional and other investors and to position the Company for long term growth.

Resolution 3 is conditional on Resolution 1 in this Notice of Meeting being approved.

3.2 Legal requirements

Section 45 of the Companies Act provides that a company may, by a resolution passed in a general meeting of shareholders and its bye-laws, consolidate all or any of its shares into a smaller number of shares.

ASX Listing Rule 7.22 also requires that the number of options on issue be consolidated in the same ratio as the ordinary capital and the exercise price amended in inverse proportion to that ratio.

3.3 Holding statement and option certificates

From the date of the Consolidation all holding statements or certificates, as applicable, for Shares and Options will cease to have any effect, except as evidence of entitlement to a certain number of post-Consolidation Shares and Options. After the Consolidation becomes effective, the Company will arrange for new holding statements or certificates, as applicable, to be issued to Shareholders and Optionholders.

It is the responsibility of each Shareholder and Optionholder to check the number of Shares and Options held prior to any disposal or exercise (as the case may be).

3.4 Fractional entitlements and taxation

Not all Shareholders and Optionholders will hold that number of Shares and Options, which can be evenly divided by one hundred (100). Where a fractional entitlement occurs, the Directors will round that fraction up to the nearest whole Share or Option and issue the whole Share or Option as a fully paid bonus Share or Option, fully paid up by the Company.

It is not considered that any taxation consequences will exist for Shareholders or Optionholders arising from the Consolidation. However, Shareholders and Optionholders are advised to seek their own tax advice on the effect of the Consolidation, and neither the Company, nor the Directors (or the Company’s advisers) accept any liability for the individual taxation consequences arising from the Consolidation.

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3.5 Effect on capital structure

If Resolution 3 is passed, the number of Shares on issue will be reduced from 2,443,820,216 to approximately 24,438,202. The number of Options on issue will be reduced from 36,500,000 to approximately 365,000 and the exercise price of the Options will be increased by a multiple of one hundred (100).

The effect the Consolidation will have on the issued capital of the Company is as follows (ignoring the effect of fractional entitlements):

	Pre-consolidation	Pre-consolidation	Post-consolidation	Post-consolidation
Resolution & Issue
	Shares	Options	Shares	Options
Current capitalstructure	2,443,820,216	36,500,000(1)	24,438,202	365,000(2)

Notes:

• (1) On a pre-Consolidation basis, this consists of 2,000,000 unlisted options expiring 11 January 2014 exercisable at A$0.04 each, 2,000,000 unlisted options expiring 11 January 2014 exercisable at A$0.05 each, 2,500,000 unlisted options expiring 30 June 2014 exercisable at A$0.01 each and 30,000,000 unlisted options expiring 17 October 2015 exercisable at A$0.0044 each.

• (2) On a post-Consolidation basis, this consists of 20,000 unlisted options expiring 11 January 2014 exercisable at A$4.00 each, 20,000 unlisted options expiring 11 January 2014 exercisable at A$5.00 each, 25,000 unlisted options expiring 30 June 2014 exercisable at A$1.00 each and 300,000 unlisted options expiring 17 October 2015 exercisable at A$0.44 each.

If Resolution 3 is passed, the effect the Consolidation will have on the authorised capital of the Company will be that the par value of the Company’s shares increases from £0.01 to £1.00 and reduces the authorized share capital from 25,000,000,000 shares to 250,000,000 shares.

3.6 Timetable

The indicative timetable for the Consolidation is as follows:

Event	Date
General Meeting to approve the Consolidation	2 December 2013
NotificationtoASXthat securityholdershave approved the Consolidation	3December 2013
Last day for trading in pre-consolidated securities	4 December 2013
Trading in post-consolidated securities on a deferred settlement basis occurs	5 December 2013
Last day to register transfers on a pre-consolidated basis	11 December 2013
First day for Company to register securities on a post-consolidation basis	12 December 2013
Last day for the Company to register securities on a post-consolidation basis in the register of security holders Deferred settlement trading ends Despatch of new holding statements and option certificates	18 December 2013
Normal trading of Shares (in the form of CDIs) commences	19 December 2013

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4 RESOLUTION 4 - REDUCTION OF SHARE CAPITAL UNDER BERMUDA LAWS BY WAY OF A PAR VALUE REDUCTION

The Company’s authorised share capital (post Consolidation) will be £2,500,000, and is represented by 250,000,000 Shares each with a par value £$1.00.

In order to provide the Company with the ability to issue additional Shares below the par value of £1.00, the Directors wish to obtain Shareholder approval for the reduction of the Company’s authorised share capital.

Pursuant to Resolution 4, the par value of both the Company’s issued shares and the Company’s authorised but unissued shares shall be reduced from £1.00 to £0.01.

Shareholders should note that if Resolution 4 is approved, the proposed capital reduction will not change the number of issued and paid-up Shares held by, or the percentage interest of shareholding of each Shareholder. The par value of all Shares on issue and those issued in the future will have a par value of £0.01 and will each rank pari passu in all respects with each other. Approval of Resolution 4 will not alter the underlying assets, business operations, management or financial position of the Company.

The Company’s shares are fully paid and consequently the proposed capital reduction will not involve the diminution of any liability in respect of unpaid share capital. It will also not result in a return of any share capital or other assets to Shareholders.

Directors' recommendation

The directors of the Company recommend that shareholders vote in favour of Resolution 4.

5 RESOLUTIONS 5 to 6 – ELECTION OF DIRECTORS

Messrs Frank Vanspeybroeck and Marinko Vidovich were appointed as Directors on 31 May 2013.

Bye-law 77 permits a Director to serve such term as the Company by resolution may determine, or in the absence of such determination, until the termination of the next annual general meeting following their appointment. Accordingly, Messrs Vanspeybroeck and Vidovich submit themselves for election.

The Company is required pursuant to ASX Listing Rule 14.5 to hold an election of Directors each year.

Resolution 5 seeks approval for the election of Mr Frank Vanspeybroeck as a Director with effect from the end of the meeting.

Mr. Vanspeybroeck has over 28 years’ experience in the exploration and mining industry in Australia. His experience includes gold mining, commissioning and operating processing plants. Mr Vanspeybroeck was the founder and director until 2007 of Wedgetail Exploration NL (Millennium Minerals Ltd), a gold mining company listed on the Australian Stock Exchange which owns the Nullagine gold project in Western Australia, and was the founder and Managing

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Director from February 2006 until December 2010 of China Goldmines plc, a gold mining company listed on the AIM (UK) Stock Exchange.

Frank has taken over the management of the project development, logistics and drilling and is experienced in infrastructure, logistics and project development having residing in China for 5 years developing a gold project in China.

Directors' Recommendation

Mr Vanspeybroeck declined to make a recommendation about the proposed resolution because he has an interest in its outcome. David Vilensky and Marinko Vidovich recommend that Mr Vanspeybroeck be elected to the Board.

Resolution 6 seeks approval for the election of Mr Marinko Vidovich as a Director with effect from the end of the meeting.

Mr Vidovich is a qualified Chartered Accountant and Chartered Secretary since 1987. He has experience in public mining company financial and commercial operational management with more than 22 years' experience in the resources sector both in Australia and abroad. He has a knowledge base in listed public company reporting and compliance, financial modelling and forecasting, treasury management, project financial and corporate governance. Mr Vidovich has held numerous company secretarial and financial directorship positions with mining companies listed on AIM London and ASX platforms. Mr Vidovich is also currently a consultant with the Australian Institute of Management (WA).

Directors' Recommendation

Mr Vidovich declined to make a recommendation about the proposed resolution because he has an interest in its outcome. David Vilensky and Frank Vanspeybroeck recommend that Mr Vidovich be elected to the Board.

6 RESOLUTION 7 – APPOINTMENT OF AUDITOR

Section 89(1) of the Companies Act 1981 of Bermuda provides that members of a company at each annual general meeting shall appoint one or more auditors to hold office until the close of the next annual general meeting. In addition, section 89(6) provides that the remuneration of an auditor appointed by the members shall be fixed by the members or by the Directors, if they are authorized to do so by the members.

Therefore pursuant to Resolution 7, Deloitte Touche Tohmatsu will be appointed as the Company’s auditors until the close of the next annual general meeting at a fee to be agreed by the Directors.

The Directors unanimously recommend that Shareholders vote in favour of Resolution 7.

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7 RESOLUTION 8 – APPROVAL OF 10% PLACEMENT CAPACITY

7.1 General

ASX Listing Rule 7.1 A provides that an Eligible Entity may seek Shareholder approval at its annual general meeting to allow it to issue Equity Securities up to 10% of its issued capital (10% Placement Capacity).

The Company is an Eligible Entity.

If Shareholders approve Resolution 8, the number of Equity Securities the Eligible Entity may issue under the 10% Placement Capacity will be determined in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 (as set out in Section 7.2 below).

The effect of Resolution 8 will be to allow the Directors to issue Equity Securities up to 10% of the Company's fully paid ordinary securities on issue under the 10% Placement Capacity during the period up to 12 months after the Meeting, without subsequent Shareholder approval and without using the Company's 15% annual placement capacity granted under Listing Rule 7.1.

Resolution 8 is a special resolution. Accordingly, at least 75% of votes cast by Shareholders present (in person or by proxy) and eligible to vote at the Meeting must be in favour of Resolution 8 for it to be passed.

7.2 ASX Listing Rule 7.1A

ASX Listing Rule 7.1 A came into effect on 1 August 2012 and enables an Eligible Entity to seek shareholder approval at its annual general meeting to issue Equity Securities up to 10% of its issued capital in addition to those under the Eligible Entity's 15% annual placement capacity.

An Eligible Entity is one that, as at the date of the relevant annual general meeting:

• (a) is not included in the S&P/ASX 300 Index; and

• (b) has a maximum market capitalisation (excluding restricted securities and securities quoted on a deferred settlement basis) of A$300,000,000.

The Company is an Eligible Entity as it is not included in the S&P/ASX 300 Index and has a current market capitalisation of A$2,433,467.

Any Equity Securities issued must be in the same class as an existing class of quoted Equity Securities. The Company currently has one class of quoted Equity Securities on issue, being the Shares (ASX Code: ZRL).

The exact number of Equity Securities that the Company may issue under an approval under Listing Rule 7.1 A will be calculated according to the following formula:

(A x D) - E

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Where:

• A is the number of Shares on issue 12 months before the date of issue or agreement:

• (a) plus the number of Shares issued in the previous 12 months under an exception in ASX Listing Rule 7.2;

• (b) plus the number of partly paid shares that became fully paid in the previous 12 months;

• (c) plus the number of Shares issued in the previous 12 months with approval of holders of Shares under Listing Rules 7.1 and 7.4; and

• (d) less the number of Shares cancelled in the previous 12 months.

• D is 10%.

• E is the number of Equity Securities issued or agreed to be issued under ASX Listing Rule 7.1 A.2 in the 12 months before the date of issue or agreement to issue that are not issued with the approval of holders of Ordinary Securities under ASX Listing Rule 7.1 or 7.4

7.3 Technical information required by ASX Listing Rule 7.1 A

Pursuant to and in accordance with ASX Listing Rule 7.3A, the information below is provided in relation to this Resolution 8:

• (a) Minimum Price

The minimum price at which the Equity Securities may be issued is 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 ASX trading days on which trades in that class were recorded immediately before:

• (i) the date on which the price at which the Equity Securities are to be issued is agreed; or

• (ii) if the Equity Securities are not issued within 5 ASX trading days of the date in paragraph 5.3(a)(i), the date on which the Equity Securities are issued.

(b) Date of Issue

The Equity Securities may be issued under the 10% Placement Capacity commencing on the date of the Meeting and expiring on the first to occur of the following:

• (i) 12 months after the date of this Meeting; and

• (ii) the date of approval by Shareholders of any transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of the Company's activities) or 11.2 (disposal of the Company's main undertaking) (after which date, an approval under Listing Rule 7.1 A ceases to be valid); or

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(iii) such longer period if allowed by ASX (10% Placement Capacity Period).

(c) Risk of voting dilution

Any issue of Equity Securities under the 10% Placement Capacity will dilute the interests of Shareholders who do not receive any Shares under the issue.

If Resolution 8 is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 10% Placement Capacity, the economic and voting dilution of existing Shares would be as shown in the table below.

The table below shows the dilution of existing Shareholders calculated in accordance with the formula outlined in ASX Listing Rule 7.1 A(2), on the basis of the current market price of Shares and the current number of Equity Securities on issue as at the date of this Notice (pre-Consolidation).

The table also shows the voting dilution impact where the number of Shares on issue (variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 10% Placement Capacity.

Number of Shares on Issue (Variable ‘A’ in ASX Listing Rule 7.1A.2		Dilution (Pre Consolidation)
				A$0.002 100% increase in Issue Price
	Issue Price (per Share)	A$0.0005 50% decrease in Issue Price	A$0.001 Issue Price
	Shares issued - 10% voting dilution	244,382,021 Shares	244,382,021 Shares	244,382,021 Shares
2,443,820,216 (Current Variable A)
	Funds raised	A$122,191	A$244,382	A$488,764
	Shares issued - 10% voting dilution	366,573,032 Shares	366,573,032 Shares	366,573,032 Shares
3,665,730,324 (50% increase in Variable A)
	Funds raised	A$183,286	A$366,573	A$733,146
	Shares issued - 10% voting dilution	488,764,042 Shares	488,764,042 Shares	488,764,042 Shares
4,887,640,432 (100% increase in Variable A)
	Funds raised	A$244,382	A$488,764	A$977,528

*The number of Shares on issue (variable A in the formula) could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a prorata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1.

The table above uses the following assumptions:

1. There are currently 2,433,467,216 shares on issue as at 7 November 2013.

2. The issue price set out above is the closing price of the Shares on the

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ASX on 6 November 2013.

1. The Company issues the maximum possible number of Equity Securities under the 10% Placement Capacity.

2. The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in ASX Listing Rule 7.2 or with approval under ASX Listing Rule 7.1.

3. The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.

4. This table does not set out any dilution pursuant to approvals under ASX Listing Rule 7.1.

Shareholders should note that there is a risk that:

• (i) the market price for the Company's Shares may be significantly lower on the issue date than on the date of the Meeting; and

• (ii) the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.

(d) Purpose of issue under 10% Placement Capacity

The Company may issue Equity Securities under the 10% Placement Capacity for the following purposes:

• (i) as cash consideration in which case the Company intends to use funds raised for the continuation and acceleration of exploration on the Company's Kangaluwi Copper Project in Zambia (funds would then be used for project scoping studies and ongoing project administration) and general working capital; or

• (ii) as non-cash consideration for the same purposes as above but in which circumstances the Company will provide a valuation of the non-cash consideration as required by listing Rule 7.1A.3.

(e) Allocation under the 10% Placement Capacity

The allottees of the Equity Securities to be issued under the 10% Placement Capacity have not yet been determined. However, the allottees of Equity Securities could consist of current Shareholders or new investors (or both), none of whom will be related parties of the Company.

The Company will determine the allottees at the time of the issue under the 10% Placement Capacity, having regard to the following factors:

• (i) the purpose of the issue;

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15

• (ii) alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue or other offer where existing Shareholders may participate;

• (iii) the effect of the issue of the Equity Securities on the control of the Company;

• (iv) the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company;

• (v) prevailing market conditions; and

• (vi) advice from corporate, financial and broking advisers (if applicable).

(f) Previous Approval under ASX Listing Rule 7.1A

The Company previously obtained Shareholder approval under Listing Rule 7.1A at its annual general meeting held on 20 December 2012. In the 12 months preceding the date of this notice, the Company has issued 397,428,000 shares representing 16.2% of the shares on issue at the commencement of that period.

Date of Issue	Pre- Consolidation No Issued	Class	Recipient of Security	Issue price and details of any discount to market price	Cash Consideration and use of funds
						Consideration and use of funds other than cash
21.12.12	25,000,000	Shares ranking equally with all existing shares on issue	Bergen Global Opportunity Fund, LP	$0.002 (10%)	Drawdown on finance facility to repay creditors and overheads $50,000	-
25.01.13	25,000,000	Shares ranking equally with all existing shares on issue	Bergen Global Opportunity Fund, LP	$0.002 (10%)	Drawdown on finance facility to repay creditors and overheads $50,000	-
27.02.13	50,000,000	Shares ranking equally with all existing shares on issue	Bergen Global Opportunity Fund, LP	$0.001 (10%)	Drawdown on finance facility to repay creditors and overheads $50,000	-
28.03.13	50,000,000	Shares ranking equally with all existing shares on issue	Bergen Global Opportunity Fund, LP	$0.001 (10%)	Drawdown on finance facility to repay creditors and overheads $50,000	-
23.10.13	168,900,000	Shares ranking equally with all existing shares on issue	Mr Robert McPherson	$0.001 (0%)	-	Repayment of outstanding professional fees and financial obligation

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Date of Pre- Class Recipient of Issue Cash
Issue Consolidation Security price Consideration
No Issued and and use of
Consideration
details funds
and use of
of any
funds other
discount
than cash
to
market
price
$168,900
(current
market value
$168,900)
23.10.13 68,175,000 Shares Mr Willie $0.001 Repayment of
ranking Sweta (0%) outstanding
equally with professional
all existing fees and
shares on financial
issue - obligation
$68,175
(current
market value
$68,175)
25.10.13 10,353,000 Shares Mr Borniface $0.001 Repayment of
ranking Ng’uni (0%) outstanding
equally with professional
all existing fees and
shares on financial
issue - obligation
$10,353
(current
market value
$10,353)
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(g) Compliance with ASX Listing Rules 7.1A.4 and 3.10.5A

When the Company issues Equity Securities pursuant to the 10% Placement Capacity, it will give to ASX:

• a list of the allottees of the Equity Securities and the number of Equity Securities allotted to each (not for release to the market), in accordance with Listing Rule 7.1A.4; and

• the information required by Listing Rule 3.10.5A for release to the market.

7.4 Voting Exclusion

A voting exclusion statement is included in this Notice. As at the date of this Notice, the Company has not invited any existing Shareholder to participate in an issue of Equity Securities under ASX Listing Rule 7.1A. Therefore, no existing Shareholders will be excluded from voting on Resolution 8.

The Directors unanimously recommend that Shareholders vote in favour of Resolution 8.

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GLOSSARY OF TERMS

In this Explanatory Memorandum and Notice of Meeting, in addition to the terms defined in the body of the Explanatory Memorandum, the following expressions have the following meanings:

“ AUD$ ” or “A$” means Australian dollars.

“ ASX Listing Rules ” means the Listing Rules of the Australian Securities Exchange operated by ASX Limited ABN 98 008 624 691.

“ Company ” or " Zambezi " means Zambezi Resources Limited ARBN 124 462 826.

“ Board” means the board of Directors.

“ Bye-laws” means the bye-laws of the Company.

“CDI” means a CHESS Depository Interest representing a unit of beneficial ownership in a Share registered in the name of Depositary Nominees Pty Ltd.

“Consolidation” means the consolidation of the Company’s capital on the basis of one (1) Share for every one hundred (100) Shares and one (1) Option for every one hundred (100) Options held.

“Constitution” means the Company’s constitution;

“ Companies Act” means the Bermuda Companies Act 1981, as amended.

" Corporations Act " means the Corporations Act 2001 (Cth).

“ Directors ” mean the directors of Zambezi.

“ Eligible Entity ” means an entity that, at the date of the relevant general meeting:

• (a) is not included in the S&P ASX 300 Index; and

• (b) has a maximum market capitalization (excluding restricted securities and securities quoted on a deferred settlement basis) of $300,000,000.

“ Equity Securities ” has the same meaning as in the ASX Listing Rules.

“Explanatory Memorandum ” means this Explanatory Memorandum.

“Listing Rules” means the official listing rules of ASX.

“ Meeting ” means the annual general meeting of shareholders of Zambezi convened by the Notice.

“ Notice” or “ Notice of Meeting ” means the notice of annual general meeting that accompanies this Explanatory Memorandum.

“Option” means an option to acquire a Share.

“Optionholder” means a holder of an Option.

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“Placement” means the prior issue of 247,428,000 shares in the amounts, and to the persons, set out in section 2.2.

“ Resolution” means a resolution referred to in the Notice of Meeting.

“ Shareholder” means a registered holder of Shares.

“Share” means a fully paid ordinary share in the capital of the Company and includes a reference.

“WST” means Western Standard Time as observed in Perth, Western Australia.

“Proxy Form” means the proxy form accompanying the Notice of Meeting

“ VWAP ” means volume weight average price.

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T 000001 000 ZRL MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Lodge your vote:

 By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

CDI Voting Instruction Form

 For your vote to be effective it must be received by 8:00pm (WST) Saturday, 30 November 2013

How to Vote on Items of Business

Each CHESS Depositary Interest (CDI) is equivalent to one share of Company Common Stock, so that every 1 (one) CDI registered in your name at 30 November 2013 entitles you to one vote.

You can vote by completing, signing and returning your CDI Voting Instruction Form. This form gives your voting instructions to CHESS Depositary Nominees Pty Ltd, which will vote the underlying shares on your behalf. You need to return the form no later than the time and date shown above to give CHESS Depositary Nominees Pty Ltd enough time to tabulate all CHESS Depositary Interest votes and to vote on the underlying shares.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the Australian registry, please attach a certified photocopy of the Power of Attorney to this form when you return it. Companies: Only duly authorised officer/s can sign on behalf of a company. Please sign in the boxes provided, which state the office held by the signatory, ie Sole Director, Sole Company Secretary or Director and Company Secretary. Delete titles as applicable.

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

Turn over to complete the form





View your securityholder information, 24 hours a day, 7 days a week:

www.investorcentre.com

Your secure access information is:

Review your securityholding

SRN/HIN: I9999999999 Update your securityholding

 PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

Samples/000001/000001/i

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

I 9999999999 I ND

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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with ’ X ’) should advise your broker of any changes.

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
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CDI Voting Instruction Form

Please mark to indicate your directions

CHESS Depositary Nominees Pty Ltd will vote as directed

XX

Voting Instructions to CHESS Depositary Nominees Pty Ltd

I/We being a holder of CHESS Depositary Interests of Zambezi Resources Limited hereby direct CHESS Depositary Nominees Pty Ltd to vote the shares underlying my/our holding at the Annual General Meeting of Zambezi Resources Limited to be held at Canon's Court, 22 Victoria Street, Hamilton HM12, Bermuda on Monday, 2 December 2013 at 8.00am Bermuda ADT ( Atlantic Daylight Time) (8.00pm Perth WST) and at any adjournment or postponement of that meeting.

By execution of this CDI Voting Form the undersigned hereby authorises CHESS Depositary Nominees Pty Ltd to appoint such proxies or their substitutes to vote in their discretion on such business as may properly come before the meeting.

Items of Business

 PLEASE NOTE: If you mark the Abstain box for an item, you are directing CHESS Depositary Nominees Pty Ltd or their appointed proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

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For Against Abstain
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Resolution 1 Increase of Authorised Share Capital under Bermuda Law

Resolution 2 Ratification of Prior Issue of Shares

Resolution 3 Consolidation of Capital

Resolution 4 Reduction of Share Capital under Bermuda Law by way of a Par Value Reduction

Resolution 5 Election of Mr Frank Vanspeybroeck as a Director

Resolution 6 Election of Mr Marinko Vidovich as a Director

Resolution 7 Appointment of Auditor

Resolution 8 Approval of 10% Placement Capacity

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SIGN
Signature of Securityholder(s) This section must be completed.
Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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