TREK METALS LIMITED - Capital/Financing Update 2011

ZAMBEZI RESOURCES LIMITED

Entitlement Offer Booklet

DETAILS OF A 1 FOR 3 NON-RENOUNCEABLE PRO RATA ENTITLEMENT OFFER OF ORDINARY SHARES IN ZAMBEZI AT AN OFFER PRICE OF AUD$0.01 PER NEW SHARE

THIS ENTITLEMENT OFFER CLOSES AT 5.00PM (PERTH TIME) ON 29 DECEMBER 2011. VALID ACCEPTANCES MUST BE RECEIVED BEFORE THAT TIME.

This is an important document which is accompanied by an Entitlement and Acceptance Form for you to subscribe for new ordinary shares in Zambezi Resources Limited. Please read this document carefully and call your professional adviser or the Zambezi Share Registry if you have any queries.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS

Chairman’s letter	2
Key dates for the Entitlement Offer	4
Investor Presentation	5
How to Apply	28
Important Information	33

Chairman’s letter

1 December 2011

Dear Shareholder

Zambezi Resources Limited (ASX: ZRL) ( Zambezi or the Company ) announces plans to undertake a Non-Renounceable Rights Issue to raise up to AUD$4.2 million.

Under the Company’s AUD$10 million convertible note facility ( Facility ) with LinQ Capital Limited as responsible entity for the LinQ Resources Fund ( LRF ), announced on 25 July 2011, Zambezi committed to raise at least AUD$4 million under a Rights Issue offering by 31 December 2011. The Company previously released offer documentation for a Rights Issue on 8 August 2011, but then withdrew the offer on 17 August 2011 as a result of equity market volatility and instability at the time.

LRF has granted Zambezi a waiver and/or extension of certain aspects of the Facility, including the following:

The Company must undertake a Rights Issue by 31 December 2011, but there is no longer any requirement to raise a minimum of AUD$4 million. However, if the Rights Issue does not raise AUD$4 million, the Company will use best endeavours to conduct a further equity raising for any shortfall before 30 June 2012.
The Company has renegotiated the Facility with LinQ and Tranche A of the Facility will be convertible into ordinary shares at a 20% premium to the Rights Issue and Tranche B at a 20% premium to the volume-weighted average price of Zambezi shares over the 5 trading days preceding the delivery by LRF of a conversion notice.
Zambezi must hold a general meeting to approve the Facility by 16 December 2011 (an extension of the previous deadline). The Company intends to release a notice of meeting shortly.

To satisfy its revised obligation in relation to the Rights Issue, and to give existing shareholders the opportunity to participate in the funding package as announced by the Company on 25 July 2011, Zambezi will conduct a pro rata non-renounceable entitlement offer to eligible shareholders in Zambezi in accordance with the indicative timetable set out below.

The funds raised by the Rights Issue will be applied by Zambezi towards working capital and exploration and development costs associated predominantly with its Kangaluwi Copper Project. Together with the funds available under the Facility, the Company will have valuable funding towards the feasibility study for the development of the Kangaluwi Copper Project.

Under the proposed Rights Issue, eligible shareholders will be invited to subscribe for 1 new ordinary Zambezi share for every 3 existing shares held on the record date at a price of 1 cent per share. The price represents a 17% discount to the closing price of the Company’s shares on ASX of 1.2 cents at closing on the 24[th] November 2011.

If there is any shortfall under the Rights Issue, subject to the Corporations Act and the Listing Rules, the directors reserve the right to place the shortfall to:

Eligible shareholders whose acceptance exceeds their entitlement as shown on their acceptance form for the Rights Issue; or
Any other parties selected by the directors.

The current proposed timetable for the Rights Issue is set out below.

There will be no deferred settlement trading under the Rights Issue.

Entitlement Offer

The Entitlement Offer is non-renounceable, which means that entitlements to take up New Shares ( Entitlements ) are non-transferable and will not be tradeable on ASX or otherwise transferable. Shareholders who do not take up all or any part of their Entitlements will not receive any payment or value in respect of those Entitlements not taken up and their equity interest in Zambezi will be diluted.

The Entitlement Offer is not subject to shareholder approval and will go ahead regardless of whether or not the Facility is approved by shareholders. An Entitlement Offer was considered an appropriate structure to raise funds and allow all eligible shareholders to participate in the Funding Package.

Other information

This Offer Booklet contains important information about the Entitlement Offer under the following headings:

Key dates for the Entitlement Offer;
ASX Offer Announcements;
How to Apply; and
Important Information.

With this booklet you will also find your personalised Entitlement and Acceptance Form which details your Entitlement, to be completed in accordance with the instructions provided on the form and the instructions on “How to Apply”.

The Entitlement Offer closes at 5.00pm (Perth time) on 29 December 2011. To participate, you need to ensure that you have completed the Entitlement and Acceptance Form and paid all monies before this time and date. For further information regarding the Entitlement Offer, please call 08 6555 1879 (from within Australia) or +61 8 6555 1879 (from outside Australia) between 8.30am and 5pm (Perth time) Monday to Friday, or visit our website at www.zambeziresources.com.

You should also consult your stockbroker, accountant or other independent professional adviser to evaluate whether or not to participate in the Entitlement Offer.

On behalf of the Board of Zambezi, I thank you for your support of our company.

Yours faithfully,

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David Vilensky Chairman Zambezi Resources Limited

KEY DATES

NOTE: These dates are indicative only. Zambezi reserves the right to change these dates subject to the Corporations Act and the Listing Rules.

Event	Date
Lodge offer documentation and Appendix 3B	1 December 2011
Dispatch notice to shareholders informing them of Rights Issue	2 December 2011
Shareholders trade on ‘ex’ entitlement basis	5 December 2011
Record date for determining entitlements to participate in	5:00pm (Perth time) on 9
Rights Issue	December 2011
Completion of dispatch of offer documentation and	13 December 2011
entitlement and acceptance form to shareholders
Acceptance close	29 December 2011
ASX notified of under subscriptions	4 January 2012
Holding statements dispatched to shareholders	9 January 2012
Normal trading for new shares commences	10 January 2012

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Zambezi Resources Limited

Kangaluwi Copper Project Investor Presentation

December 2011

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Australian Stock Exchange ASX : ZRL

Zambezi Resources Limited Kangaluwi Copper Project

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Disclaimer

Summary information

This presentation contains summary information about Zambezi and its subsidiaries and their activities current as at the date of this presentation. The information contained here is of general background and does not purport to contain all that is required to fully evaluate any transaction or investment. It should be read in conjunction with Zambezi’s other periodic and continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au.

Not financial product advice

This presentation is for information purposes only. It is not financial product or investment advice or a recommendation to acquire Zambezi shares, and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek professional advice appropriate to them. Cooling off rights do not apply to the acquisition of Zambezi shares under the Entitlement Offer.

Not an offer

This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither this presentation nor anything contained in it shall form the basis of any contract or commitment.

In particular, this presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to any person that is, or is acting for the account or benefit of any "U.S. person" (as defined in Regulation S under the Securities Act of 1933, as amended (the "U.S. Securities Act")) (“US Person”). This document may not be distributed or released in the United States or to any U.S. Person. The securities in the proposed offering have not been and will not be registered under the U.S. Securities Act, or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the securities in the proposed offering may not be offered or sold, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. Persons, except in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws.

Past performance

Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

Forward-looking information

This presentation contains certain forward-looking information. The words 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'intend', 'should', 'could', 'may', 'target', expect, project, forecast, estimate, likely, intend, should, could, may, target, 'plan' and other similar expressions are intended to identify forward-looking information, which include indications of, and guidance on, future earnings and financial position, performance and targeted annual production; statements and information with respect to Zambezi’s strategies in connection with corporate growth and development and possible or assumed further results of operations, including the timing of and use of proceeds from the Entitlement Offer. Assumptions upon which such forward-looking information are based include that the Company’s strategies with respect to corporate growth and development will proceed as planned, the Entitlement Offer will complete on satisfactory terms and financing will continue to be available to the Company when needed and on acceptable terms, the Company’s estimations of mineral resources and mineral reserves are accurate and that inferred mineral resources will be converted into higher categories. Management believes these assumptions are reasonable. However, such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Zambezi, that may cause actual results to differ materially from those expressed or implied in such statements. Such risks include, but are not limited to: risks related to mining operations, including political risks and instability and risks related to international operations; actual results of current exploration activities; the price of commodities, as well as those factors described in the “Key Risks” of this presentation. Actual results, performance or outcomes may differ materially from any forward-looking statements and the assumptions on which those statements are based. Investors should not place undue reliance on forward-looking statements and Zambezi does not assume any obligation to update such information other than as required by law.

Risks

An investment in shares is subject to investment and other known and unknown risks, some of which are beyond the control of Zambezi. Zambezi does not guarantee any particular rate of return or the performance of Zambezi. An investment in Zambezi shares should be regarded as speculative. Prospective investors should have regard to the ‘key risks’ section of this presentation which outlines some of these risks.

Financial data

All dollar values are in Australian dollars (AUD$) unless stated otherwise.

Zambezi Resources Limited Kangaluwi Copper Project

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Investment Hi hli hts g g

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Current resource for Kangaluwi Copper Project (KCP), stands at 23.4 Mt grading 0.85% Cu for 200,575 tonnes of contained copper.
Anticipated additional resources from Kalulu Prospect, infill drilling has recently been completed.
The Company has secured a Convertible Note Facility of AUD$10 million in two tranches of AUD$5 million each carrying a coupon of 10% pa of which Tranche A for AUD$5 million has been drawn down.
The Company is raising $4.2 million by way of a 1:3 Rights Issue at a price of 1 cent per share
Funds raised will be applied towards working capital and exploration and development costs associated with the Kangaluwi Copper Project, and towards a feasibility study for project development.
Company is aiming for final feasibility study in 2012 and construction in 2013.

Cor orate Sna shot p p

Capital Structure (as at 24.11.2011)

Directors and Senior Management

Share Price Market Cap Ordinary Shares Options (unlisted) Cash Debt (Convertible Note)	AUD 1.2 cents AUD $15 million 1.2 billion 159.5 million AUD $1.5 million AUD $5.0 million	David Vilensky Frank Vanspeybroeck Pierre Malherbe Richard Procter Emmanuel Heyndrickx Simon Durack	Non-Exec Chairman Chief Executive Officer Chief Financial Officer Non-Exec Director Non-Exec Director Non-Exec Director
		Marinko Vidovich	Project Manager
		Geoff Booth	Consultant Geologist

Top Shareholders (as at 24.11.2011)

RBC Dexia Investor Services Australia Nominees	277,569,400	22.06%
Lando Pty Ltd	51,555,555	4.10 %
JP Morgan Nominees Australia Ltd Cash Income A/c	33,849,481	2.69 %
JP Morgan Nominees Australia Ltd	30,349,833	2.41 %
Glencore Investments BV	29,162,062	2.32 %
Astron Limited	29,000,000	2.30 %

Zambezi Resources Limited Kangaluwi Copper Project

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Cor orate Structure p

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----- Start of picture text -----

ZAMBEZI RESOURCES LIMITED
(ZRL) GLENCORE
Public Company Registered In Bermuda INTERNATIONAL AG
Listed On ASX
ZAMBEZI RESOURCES
MWEMBESHI RESOURCES SOUTHERN AFRICAN CAPE RESOURCES LIMITED
AUSTRALIA PTY LIMITED
(ZRAPL) (BERMUDA) LIMITED RESOURCES LIMITED (CRL)
(MRBL) (SARL) Incorporated in Bermuda
Registered in Australia
100% OWNED BY ZRL Registered in Bermuda Incorporated in Bermuda 49% OWNED BY ZRL
100% OWNED BY ZRL 100% OWNED BY ZRL 51% OWNED BY GLENCORE
LISTED ON ASX
CHEOWA JV (with Glencore)
MWEMBESHI RESOURCES CHALIMBANA RESOURCES
Operating as
LIMITED LIMITED
CHEOWA RESOURCES
(MRL) (CHARL) LIMITED
Incorporated in Zambia Incorporated in Zambia
(CHERL)
100% OWNED BY MRBL 100% OWNED BY SARL
Incorporated in Zambia
100% OWNED BY CRL
Tenements: Tenements:
 1 large scale Mining Licence:  5 Prospecting Licences:
- Kangaluwi 15547-HQ-LML - Sinjela 13138-HQ-LPL Tenements:
for a period of 25 years (exp. 11/03/13)  3 Prospecting Licences:
 3 Prospecting Licences: - Mvula 13093-HQ-LPL (exp. - Chalimbana 13170-HQ-LPL
- Shamifwe 13147-HQ-LPL 13/05/13) - Chayinda 13171-HQ-LPL
(exp. 23/11/11) - Lwimba 13137-HQ-LPL - Cheowa 8573-HQ-LPL
- Mulungushi/Kamona (exp. 11/01/13)
8145-HQ-LPL - Chilanga 13094-HQ-LPL
(exp. 09/03/12) (exp 11/03/13)
- Rufunsa 8327-HQ-LPL - Mwomboshi 13140-HQ-
(exp. 30/01/13) LPL (exp. 20/01/13)
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MPANDE LIMESTONE LIMITED (MLL)
Incorporated in Zambia 100% OWNED BY MRL Tenements:
2 Prospecting Licences: - Mpande A 13172-HQ-LPL (exp. 19/03/12)
- Mpande B 13173-HQ-LPL (exp. 18/03/13)

Zambezi Resources Limited Kangaluwi Copper Project

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Tenement Ma p

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Figure 1: Tenement Plan

Zambia

Mining Culture

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Extensive history of mining and exploration, dating from the early part of 20[th] century.
Mining and exploration well understood by the Government and encouraged by authorities.
Excellent permitting system based on Cadastral system.
Lower sovereign risk.
Favourable tax laws that allow write-off of capital mining plants and pre-production expenses in the year the costs were incurred.
Zambia is ranked as the world's seventh largest producer of copper, generating 3.3% of the western world’s production.

Zambezi Resources Limited Kangaluwi Copper Project

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Infrastructure

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Kariba Hydroelectric scheme 1800MW, reticulated directly to Copperbelt.
Excellent supplies from major rivers – Kafue, Luangwa, Zambezi plus Kariba Dam.
Sealed roads and key rail links through Lusaka and the Copperbelt.
Major international airport in Lusaka serviced regularly by a number of international airlines, local airline services regional routes and domestic charter companies support air travel within Zambia.
Zambia has a well-established infrastructure of domestic and international
telecommunications.

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Figure 2: Project Location

Zambezi Resources Limited Kangaluwi Copper Project

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Kan aluwi Co er Pro ect Overview g pp j

Introduction

The Kangaluwi Copper Project (100% owned) comprises a 245 km[2] granted Mining Licence 15547HQ-LPL, located approximately 180 km east of Lusaka.

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Figure 3: Mining Licence 15547

Extensive soil geochemical sampling programs carried out from 2005 - 2007 covering an area of 180 km[2] , identified six prospects. Two main trends of continuous copper anomalies above 100 ppm have been delineated over a strike length of 28 km. The Kangaluwi – Kalulu – Chisawa trend occurs over a strike length of 19 km and the Chisawa – Imboo trend covers a strike length of 9 km.

Zambezi Resources Limited Kangaluwi Copper Project

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Figure 4: Geochemical Anomalies – Plan Section

Geological Setting

Mineralisation at the Kangaluwi Copper Project is hosted by intensely deformed and foliated metasedimentary rocks. These form part of the Zambezi supracrustal sequence located within the Zambezi belt of southern Zambia and are of Neoproterozoic age (~830 Ma). They occur north of the Zimbabwe Archean Craton and form sections of the Irumide belt. The licence falls south east of the celebrated Lufilian Arc, which hosts celebrated deposits of the Zambian copper belt.

Mineralisation is structurally controlled in a sheared, east plunging regional synform, with Kangaluwi and Chisawa deposits located on the limbs of the fold, and Kalulu in its nose. The metasedimentary rocks of the Kangaluwi-Chisawa copper prospects trend roughly east-southeast and dip shallowly south-west, between 30-40 degrees.

At both Kangaluwi and Chisawa, the host rocks for copper mineralisation include biotite-muscovite schists, garnet-biotite-muscovite schists, amphibolites, epidosites, quartzite, pegmatite and graphitic shale. These lithological units are often interbedded and in places may display gradational contacts.

Base metal mineralisation at Kangaluwi and Chisawa comprises chalcopyrite, bornite, with malachite, azurite and chrysocolla an upper oxide zone.

Zambezi Resources Limited Kangaluwi Copper Project

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Ex loration Histor p y

During 2006, 24 RC holes were completed at Kangaluwi over an 800m strike length and at Chisawa, over a strike length of 2,600m. In 2007, 15,459 m of RC drilling and 4,469m of diamond drilling were completed at Kangaluwi over a 3 km strike length.

RC drilling returned significant copper mineralisation over substantial widths and in multiple zones, which broaden at depth including: 18m at 1.42% Cu from 114m, 17 m at 1.2% Cu from 49m, 10m at 1.97% Cu from 30m.

Diamond drilling confirmed down dip continuity of mineralisation with results including: 19.2m at 1.14% Cu from 92m, 8.07m at 2.98% Cu from 145.34m, 6.14m at 1.29% Cu from 157.68m, 7.32m at 1.4% Cu from 161m.

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Figure 5: Kangaluwi Drill Hole Location – Plan Section

During 2008, 71 RC holes for 17,058m and 18 DD holes for 5,372m were completed at Kangaluwi, 63 RC holes for 10,011m at Chisawa and 20 RC holes for 2,560m at Kalulu, over a strike length of 1.3 km.

Zambezi Resources Limited Kangaluwi Copper Project

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Figure 6: Cross Section Chisawa 12000E

In May 2008, the Company completed a major regional Versatile Time Domain Electromagnetic Survey (VTEM) over the Kangaluwi Project area. Some 1,810 km were flown at a line spacing of 150m, with further infill at 75m in the Kangaluwi – Chisawa – Kalulu area. Electromagnetic and geochemical anomaly convergence has facilitated delineation of high grade copper mineralisation.

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Figure 7: Kangaluwi Limb with VTEM Anomaly Extending to SE

Zambezi Resources Limited Kangaluwi Copper Project

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Mineral Resource Estimate

Based on previous exploration, an Indicated Mineral Resource of 8.9 Mt grading at 0.78% Cu for 69,000 tonnes of contained copper has been estimated at the Kangaluwi prospect. At Chisawa, an Inferred Mineral Resource of 14.5 Mt, has been estimated grading 0.90% Cu for 130,824 tonnes of contained Cu.

Table 1: Global Indicated and Inferred Mineral Resource Estimate - Kangaluwi Copper Project

Prospect	Measured	Measured	Indicated	Indicated	Inferred	Inferred	Totals	Totals
	Tonnes (t)	Grade (% Cu)	Tonnes (t)	Grade (% Cu)	Tonnes (t)	Grade (% Cu)	Tonnes (t)	Grade (% Cu)

Kangaluwi Chisawa	- -	- -	8,907,000 -	0.78 -	- 14,535,983	- 0.90	8,907,000 14,535,983	0.78 0.90
Totals	-	-	8,907,000	0.78	14,535,983	0.90	23,442,983	0.85

The combined JORC-compliant resources estimates for Kangaluwi and Chisawa total 23.4 Mt, grading 0.85% Cu for 200,575 tonnes of contained copper.

At this stage, these estimates do not include any resources from the Kalulu prospect, with ~27% of the 28 km prospective strike length drill tested.

2011 Exploration at Kangaluwi Copper Project

From April 2011, diamond drilling at Chisawa, Kalulu and Kangaluwi prospects has been undertaken by Ox and Infraca Drilling Contractors. A total of 22,183m were reported from 94 DD holes (Table 2). Of the 94 holes, 66 holes comprised Phase I drilling at Kalulu and Chisawa, 26 holes were deep holes from the Phase II drilling program in Kalulu, Kangaluwi and Chisawa, and two holes at Kalulu (KLUDD0040 and KLUDD0041) were shallow infill from a Phase III drilling program (Table 3, Table 4, Table 5).

Table 2: 2011 Drilling Program

		DD M
Project Zambezi	DD Holes

Kangaluwi	10	4,020
Kalulu	44	9,530
Chisawa	40	8,631
TOTAL	94	22,183

6,653 samples were dispatched for assay to A.H. Knight Laboratory in Kitwe. To date 1,417 assay results have been received for completed holes, with 2,687 assay results received for incomplete holes. Some 2,549 assay results are still outstanding; while a further 7,000 samples are in the process of being dispatched.

Zambezi Resources Limited Kangaluwi Copper Project

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Table 3: Kangaluwi

							Total Metres ALL Rigs
BH ID	BH Locality	Easting	Northing	Drilling	Azimuth	Inclination
		ARC1950 UTM	ARC1950 UTM	Method
KNGDD0039	Kangaluwi	787,098	8,289,774	DD	320	-50	291.00
KNGDD0040	Kangaluwi	787,100	8,289,721	DD	360	-50	450.29
KNGDD0041	Kangaluwi	786,790	8,289,610	DD	360	-60	410.35
KNGDD0042	Kangaluwi	787,242	8,289,725	DD	360	-60	416.15
KNGDD0043	Kangaluwi	787,389	8,289,600	DD	360	-60	450.00
KNGDD0044	Kangaluwi	787,098	8,289,625	DD	360	-60	450.00
KNGDD0045	Kangaluwi	787,587	8,289,603	DD	360	-60	399.00
KNGDD0046	Kangaluwi	787,695	8,289,528	DD	360	-60	353.60
KNGDD0047	Kangaluwi	787,803	8,289,364	DD	360	-60	350.35
KNGDD0048	Kangaluwi	786,941	8,289,577	DD	360	-60	450.00
Total							4,020.74

Table 4: Chisawa

							Total Metres ALL Rigs
BH ID	BH Locality	Easting	Northing	Drilling	Azimuth	Inclination
		ARC1950 UTM	ARC1950 UTM	Method
CHSDD0001	Chisawa	787,549	8,287,963	DD	42.5	-50	180.10
CHSDD0002	Chisawa	787,872	8,287,718	DD	42.5	-50	123.80
CHSDD0003	Chisawa	787,449	8,287,817	DD	42.5	-50	300.20
CHSDD0004	Chisawa	787,482	8,287,892	DD	42.5	-50	250.18
CHSDD0005	Chisawa	787,708	8,287,840	DD	42.5	-50	251.08
CHSDD0006	Chisawa	787,706	8,287,840	DD	42.5	-50	152.00
CHSDD0007	Chisawa	787,755	8,287,562	DD	42.5	-50	250.97
CHSDD0008	Chisawa	787,665	8,287,771	DD	42.5	-50	192.90
CHSDD0009	Chisawa	787,919	8,287,442	DD	42.5	-50	250.20
CHSDD0010	Chisawa	787,812	8,287,655	DD	42.5	-50	200.74
CHSDD0011	Chisawa	787,976	8,287,523	DD	42.5	-50	200.00
CHSDD0012	Chisawa	788,031	8,287,611	DD	42.5	-50	150.34
CHSDD0013	Chisawa	787,155	8,287,420	DD	42.5	-50	200.73
CHSDD0014	Chisawa	788,205	8,287,491	DD	42.5	-50	150.00
CHSDD0015	Chisawa	788,312	8,287,292	DD	42.5	-50	200.90
CHSDD0016	Chisawa	788,365	8,287,383	DD	42.5	-50	150.77
CHSDD0017	Chisawa	787,890	8,287,245	DD	42.5	-50	386.98
CHSDD0018	Chisawa	788,468	8,287,154	DD	42.5	-50	200.24
CHSDD0019	Chisawa	788,515	8,287,245	DD	42.5	-50	150.20
CHSDD0020	Chisawa	788,654	8,287,145	DD	42.5	-50	200.60
CHSDD0021	Chisawa	788,610	8,286,980	DD	85.0	-50	142.89
CHSDD0022	Chisawa	788,717	8,287,223	DD	42.5	-50	71.60
CHSDD0023	Chisawa	788,836	8,286,996	DD	85.0	-50	150.30
CHSDD0024	Chisawa	788,726	8,286,991	DD	85.0	-50	200.50
CHSDD0025	Chisawa	788,841	8,286,817	DD	55.0	-50	101.14
CHSDD0026	Chisawa	788,752	8,286,765	DD	55.0	-50	176.20
CHSDD0027	Chisawa	788,674	8,286,704	DD	55.0	-50	180.30
CHSDD0028	Chisawa	788,861	8,286,515	DD	42.5	-50	203.10

Zambezi Resources Limited Kangaluwi Copper Project

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							Total Metres ALL Rigs
BH ID	BH Locality	Easting	Northing	Drilling	Azimuth	Inclination
CHSDD0029	Chisawa	788,914	8,286,611	DD	42.5	-50	101.37
CHSDD0030	Chisawa	788,991	8,286,419	DD	42.5	-50	150.12
CHSDD0031	Chisawa	789,192	8,286,289	DD	42.5	-50	152.13
CHSDD0032	Chisawa	789,354	8,286,164	DD	42.5	-50	151.00
CHSDD0033	Chisawa	788,902	8,286,111	DD	42.5	-50	388.68
CHSDD0034	Chisawa	789,470	8,286,018	DD	42.5	-50	150.00
CHSDD0035	Chisawa	789,330	8,285,683	DD	42.5	-50	342.19
CHSDD0036	Chisawa	788,334	8,287,022	DD	42.5	-50	400.00
CHSDD0037	Chisawa	789,099	8,285,971	DD	43.0	-50	350.00
CHSDD0038	Chisawa	788,551	8,286,970	DD	85.0	-50	276.62
CHSDD0039	Chisawa	788,587	8,286,362	DD	43.0	-50	400.60
CHSDD0040	Chisawa	787,702	8,287,340	DD	43.0	-50	400.20
TOTAL							8,631.87

Table 5: Kalulu

							Total Metres ALL Rigs
BH ID	BH Locality	Easting	Northing	Drilling	Azimuth	Inclination
		ARC1950 UTM	ARC1950 UTM	Method
KLUDD0003	Kalulu	784,366	8,289,909	DD	320	-60	200.72
KLUDD0004	Kalulu	784,407	8,289,872	DD	320	-60	207.00
KLUDD0005	Kalulu	784,289	8,289,856	DD	320	-60	200.00
KLUDD0006	Kalulu	784,320	8,289,894	DD	320	-60	214.00
KLUDD0007	Kalulu	784,310	8,289,980	DD	320	-60	168.00
KLUDD0008	Kalulu	784,260	8,290,022	DD	320	-60	143.10
KLUDD0009	Kalulu	784,216	8,289,922	DD	320	-60	144.00
KLUDD0010	Kalulu	784,420	8,289,950	DD	320	-60	201.00
KLUDD0011	Kalulu	784,444	8,289,975	DD	320	-60	213.00
KLUDD0012	Kalulu	784,464	8,290,087	DD	320	-60	177.00
KLUDD0013	Kalulu	784,413	8,290,159	DD	320	-60	149.90
KLUDD0014	Kalulu	784,439	8,290,127	DD	320	-60	168.00
KLUDD0015	Kalulu	784,536	8,290,010	DD	320	-60	207.00
KLUDD0016	Kalulu	784,552	8,290,089	DD	320	-60	198.00
KLUDD0017	Kalulu	784,513	8,290,050	DD	320	-60	206.00
KLUDD0018	Kalulu	784,628	8,290,150	DD	320	-60	193.90
KLUDD0019	Kalulu	784,591	8,290,118	DD	320	-60	209.80
KLUDD0020	Kalulu	784,696	8,290,154	DD	320	-60	225.00
KLUDD0021	Kalulu	784,660	8,290,179	DD	320	-60	201.00
KLUDD0022	Kalulu	784,700	8,290,221	DD	320	-60	192.00
KLUDD0023	Kalulu	784,592	8,290,258	DD	320	-60	162.00
KLUDD0024	Kalulu	784,705	8,290,297	DD	320	-60	171.00
KLUDD0025	Kalulu	784,744	8,290,303	DD	320	-60	201.00
KLUDD0026	Kalulu	784,747	8,290,392	DD	320	-60	156.00
KLUDD0027	Kalulu	784,845	8,290,292	DD	320	-60	248.50
KLUDD0028	Kalulu	784,815	8,290,331	DD	320	-60	204.00
KLUDD0029	Kalulu	784,851	8,290,356	DD	320	-60	200.50
KLUDD0030	Kalulu	784,884	8,290,383	DD	320	-60	204.00
KLUDD0031	Kalulu	784,927	8,290,423	DD	320	-60	201.00
KLUDD0032	Kalulu	784,999	8,290,429	DD	320	-60	242.90

Zambezi Resources Limited Kangaluwi Copper Project

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							Total Metres ALL Rigs
BH ID	BH Locality	Easting	Northing	Drilling	Azimuth	Inclination
KLUDD0033	Kalulu	784,968	8,290,461	DD	320	-60	200.80
KLUDD0034	Kalulu	784,896	8,290,494	DD	320	-60	160.00
KLUDD0035	Kalulu	784,950	8,290,493	DD	320	-60	179.80
KLUDD0036	Kalulu	785,030	8,290,206	DD	320	-60	401.70
KLUDD0037	Kalulu	784,430	8,289,717	DD	320	-60	261.00
KLUDD0038	Kalulu	784,573	8,289,832	DD	320	-60	400.00
KLUDD0039	Kalulu	784,144	8,289,740	DD	320	-60	400.00
KLUDD0040	Kalulu	784,662	8,290,114	DD	320	-60	231.00
KLUDD0041	Kalulu	784,740	8,290,254	DD	320	-60	231.80
KLUDD0042	Kalulu	784,729	8,290,184	DD	320	-60	234.00
KLUDD0043	Kalulu	784,969	8,290,392	DD	320	-60	240.00
KLUDD0044	Kalulu	784,826	8,290,249	DD	320	-60	300.00
KLUDD0045	Kalulu	784,881	8,290,323	DD	320	-60	231.00
KLUDD0046	Kalulu	784,782	8,290,299	DD	320	-60	250.00
							9,530.42

1.0 Kalulu Prospect

1.1 Introduction

A total of 44 holes were drilled at Kalulu for 9,530m. This prospect is interpreted to lie at the nose of the east-plunging fold. Its sulphide mineralisation is structurally controlled and lies within a sheared, regional east-plunging syncline. Kalulu’s strike length of 1.2km was drilled at 100m intervals, between and along RC drill sections. This will result in a 50m x 50m grid drill coverage, which should advance the Kalulu resource to an Indicated Resource Category (Figure 8).

Zambezi Resources Limited Kangaluwi Copper Project

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Figure 8: Kalulu 2011 Drilled Holes

Thus far significant intersections include 14m @ 1.0% TCu, 10m @ 1.2% TCu, 10m @ 1.1% TCu, 8m @ 1.3% TCu and 21m @ 0.8% TCu. Assay results at Kalulu confirm the presence of wider mineralised zones, associated with fold hinges where metal deposition occurs in dilatant (low pressure) lenses. With all 15 holes intersecting mineralisation across multiple chutes, several additional ore zones are now thought to be present.

1.2 Results

Results received during the period are from 15 holes drilled along sections 10100E, 10150E, 10200E, 10300E, 10400E, 10550E and 10600E, with significant intersections tabulated below.

Table 6: Kalulu Prospect - DD Drilling Assay Results

				EOH Depth
Hole ID	Easting	Northing	RL		Inclination	Azimuth	mFrom	mTo	mWidth	Cu%	Intercept
KLUDD0003	784362	8289900	683	200.72	-60	320	72.60	73.80	1.20	0.44	1.2m@ 0.44 % TCu
KLUDD0003	784362	8289900	683	200.72	-60	320	75.50	77.00	1.50	1.51	1.5m@ 1.51 % TCu
KLUDD0003	784362	8289900	683	200.72	-60	320	109.00	111.00	2.00	0.54	2.0m@ 0.54%TCu
KLUDD0003	784362	8289900	683	200.72	-60	320	157.00	159.00	2.00	0.78	2.0m@ 0.78%TCu
KLUDD0004	784406	8289873	687	207.00	-60	320	88.60	91.00	2.40	1.69	2.4m@ 1.69 % TCu
KLUDD0004	784406	8289873	687	207.00	-60	320	124.00	127.00	3.00	0.35	3.0m@ 0.35 % TCu
KLUDD0004	784406	8289873	687	207.00	-60	320	183.00	184.00	1.00	0.36	1.0m@ 0.36 % TCu
KLUDD0005	784290	8289850	682	200.00	-60	320	87.00	101.00	14.00	0.99	14.0m@ 0.99 % TCu
KLUDD0005	784290	8289850	682	200.00	-60	320	184.00	185.00	1.00	0.42	1.0m@ 0.42% TCu
KLUDD0005	784290	8289850	682	200.00	-60	320	187.00	188.00	1.00	0.35	1.0m@ 0.35% TCu
KLUDD0006	784320	8289894	687	214.00	-60	320	78.00	88.00	10.00	1.13	10.0m@ 1.13 % TCu
KLUDD0006	784320	8289894	687	214.00	-60	320	98.00	99.00	1.00	0.48	1.0m@ 0.48 %TCu
KLUDD0006	784320	8289894	687	214.00	-60	320	110.00	111.00	1.00	0.46	1.0m@ 0.46 %TCu
KLUDD0006	784320	8289894	687	214.00	-60	320	125.00	126.00	1.00	0.64	1.0m@ 0.64 %TCu
KLUDD0006	784320	8289894	687	214.00	-60	320	138.00	139.00	1.00	0.30	1.0m@ 0.30 %TCu

Zambezi Resources Limited Kangaluwi Copper Project

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				EOH Depth
Hole ID	Easting	Northing	RL		Inclination	Azimuth	mFrom	mTo	mWidth	Cu%	Intercept
KLUDD0006	784320	8289894	687	214.00	-60	320	164.00	165.00	1.00	0.48	1.0m@ 0.48 %TCu
KLUDD0006	784320	8289894	687	214.00	-60	320	167.00	168.00	1.00	0.40	1.0m@ 0.40 %TCu
KLUDD0007	784310	8289981	687	168.00	-60	320	44.00	65.00	21.00	0.79	21.0m@ 0.79 % TCu
KLUDD0007	784310	8289981	687	168.00	-60	320	88.00	89.00	1.00	0.44	1.0m@ 0.44 %TCu
KLUDD0007	784310	8289981	687	168.00	-60	320	90.00	91.00	1.00	0.51	1.0m@ 0.51 %TCu
KLUDD0007	784310	8289981	687	168.00	-60	320	92.00	94.00	2.00	0.42	2.0m@ 0.42 %TCu
KLUDD0007	784310	8289981	687	168.00	-60	320	110.00	111.00	1.00	0.44	1.0m@ 0.44 %TCu
KLUDD0007	784310	8289981	687	168.00	-60	320	135.00	136.00	1.00	0.96	1.0m@ 0.96 %TCu
KLUDD0009	784216	8289922	654	144.00	-60	320	13.00	19.00	6.00	0.41	6.0m@ 0.39 % TCu
KLUDD0009	784216	8289922	654	144.00	-60	320	24.00	29.00	5.00	0.61	5.0m@ 0.61 % TCu
KLUDD0009	784216	8289922	654	144.00	-60	320	79.00	80.00	1.00	0.48	1.0m@ 0.48 % TCu
KLUDD0009	784216	8289922	654	144.00	-60	320	87.00	88.00	1.00	0.48	1.0m@ 0.48 % TCu
KLUDD0009	784216	8289922	654	144.00	-60	320	95.76	96.50	0.74	2.41	0.7m@ 2.41% TCu
KLUDD0009	784216	8289922	654	144.00	-60	320	103.00	104.00	1.00	1.04	1.0m@ 1.04 % TCu
KLUDD0011	784444	8289981	669	213.00	-60	320	13.00	17.00	4.00	0.62	4.0m@ 0.62 % TCu
KLUDD0011	784444	8289981	669	213.00	-60	320	133.00	139.00	6.00	0.83	6.0m@ 0.83 % TCu
KLUDD0011	784444	8289981	669	213.00	-60	320	145.60	148.46	2.86	0.57	2.9m@ 0.57 % TCu
KLUDD0011	784444	8289981	669	213.00	-60	320	188.80	191.00	2.20	0.55	2.2m@ 0.55 % TCu
KLUDD0011	784444	8289981	669	213.00	-60	320	194.00	203.87	9.87	1.20	9.9m@ 1.20 % TCu
KLUDD0012	784464	8290087	650	177.00	-60	320	56.00	59.70	3.70	0.70	3.7m@ 0.70 % TCu
KLUDD0012	784464	8290087	650	177.00	-60	320	82.00	83.35	1.35	1.54	1.3m@ 1.54 % TCu
KLUDD0012	784464	8290087	650	177.00	-60	320	84.00	85.00	1.00	0.57	1.0m@ 0.57 % TCu
KLUDD0013	784413	8290159	627	149.90	-60	320	125.00	127.00	2.00	0.43	2.0m@ 0.43 % TCu
KLUDD0015	784536	8290010	627	207.00	-60	320	84.00	86.00	2.00	0.48	2.0m@ 0.48 % TCu
KLUDD0015	784536	8290010	627	207.00	-60	320	108.00	108.80	0.80	3.96	0.8m@ 3.96 % TCu
KLUDD0015	784536	8290010	627	207.00	-60	320	113.00	121.00	8.00	1.28	8.0m@ 1.28 % TCu
KLUDD0016	784568	8290078	617	198.00	-60	320	75.00	76.00	1.00	0.57	1.0m@ 0.57 % TCu
KLUDD0016	784568	8290078	617	198.00	-60	320	79.00	85.00	6.00	0.66	6.0m@ 0.66 % TCu
KLUDD0017	784513	8290050	625	206.00	-60	320	82.00	89.00	7.00	0.77	7.0m@ 0.77 % TCu
KLUDD0017	784513	8290050	625	206.00	-60	320	94.00	99.00	5.00	1.07	5.0m@ 1.07 % TCu
KLUDD0017	784513	8290050	625	206.00	-60	320	197.00	198.00	1.00	0.45	1.0m@ 0.45 % TCu
KLUDD0018	784628	8290150	628	193.90	-60	320	67.80	77.00	9.20	0.88	9.2m@ 0.88 % TCu
KLUDD0018	784628	8290150	628	193.90	-60	320	163.00	165.00	2.00	0.89	2.0m@ 0.88 % TCu
KLUDD0020	784696	8290154	643	225.00	-60	320	48.00	50.00	2.00	0.75	2.0m@ 0.75% TCu
KLUDD0020	784696	8290154	643	225.00	-60	320	92.00	95.50	3.50	1.49	3.5m@ 1.49% TCu
KLUDD0020	784696	8290154	643	225.00	-60	320	97.00	100.00	3.00	0.51	3.0m@ 0.51% TCu
KLUDD0020	784696	8290154	643	225.00	-60	320	103.00	104.00	1.00	1.65	1.0m@ 1.65% TCu
KLUDD0020	784696	8290154	643	225.00	-60	320	165.00	166.00	1.00	0.39	1.0m@ 0.39% TCu
KLUDD0021	784660	8290179	636	201.00	-60	320	68.00	75.00	7.00	0.77	7.0m@ 0.77% TCu
KLUDD0021	784660	8290179	636	201.00	-60	320	143.00	145.00	2.00	0.82	7.0m@ 0.77% TCu

2.0 Chisawa Prospect

2.1 Introduction

Exploration activity at Chisawa has included the drilling of 40 holes for 8,631m over a 3km mineralized zone. With collars designed at 200m intervals, a 100m x 100m grid drill coverage was realised when combined with existing RC drilling, while a deep drilling program identified extensional mineralized horizons.

Located on the limb of the major overturned southwest dipping southeast plunging synform diamond drilling has demonstrated potential for down dip extensions at Chisawa. It has also identified increasing sulphide zonation with depth, with the presence of chalcopyritebornite mineralisation.

The principal aim of the infill program is to increase resource confidence and advance classification, while the deep drilling may enlarge overall resource tonnages (Figure 9).

Zambezi Resources Limited Kangaluwi Copper Project

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Significant intersections from the diamond drilling program include 25m @ 1.27% TCu, 11m @ 1.25% TCu, 7m @ 1.14% TCu and 5m @ 1.58% TCu. All holes intersected disseminated chalcopyrite mineralisation across identical lithologies, while terminating in sheared garnetbiotite-chlorite schist. The uniformity of these results reconfirm the strike and down-dip extension of mineralisation at Chisawa.

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Figure 9: Chisawa Drilled Holes

2.2 Results

Results received during the reporting period are sourced from 14 DD holes along sections 10200E, 10400E, 10600E, 10800E, 11000E and 11200E, with significant intersections tabulated below.

Zambezi Resources Limited Kangaluwi Copper Project

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Table 7: Chisawa Prospect DD Drilling Assay Results

				EOH Depth
Hole_ID	Easting	Northing	RL		Inclination	Azimuth	mFrom	mTo	mWidth	Cu%	Intercept
CHSDD0001	8287961	787550	707	180.00	-50	42.50	145.00	152.00	7.00	1.14	[email protected]%TCu
CHSDD0002	8287718	787872	702	123.80	-50	42.50	98.00	101.00	3.00	0.80	[email protected]%TCu
CHSDD0003	8287814	787444	703	300.20	-50	42.50	250.00	255.00	5.00	0.72	[email protected]%TCu
CHSDD0004	8287892	787482	692	251.00	-50	42.50	195.00	197.00	2.00	0.63	[email protected]%TCu
CHSDD0005	8287690	787607	697	251.00	-50	40.00	219.00	223.00	4.00	0.87	[email protected]%TCu
CHSDD0005	8287690	787607	697	251.00	-50	40.00	235.00	239.00	4.00	1.09	[email protected]%TCu
CHSDD0006	8287846	787711	697	152.00	-50	43.00	104.00	114.00	10.00	0.77	[email protected]%TCu
CHSDD0006	8287846	787711	697	152.00	-50	43.00	131.00	142.00	11.00	1.25	[email protected]%TCu
CHSDD0007	8287562	787755	690	250.97	-50	42.50	194.00	199.00	5.00	1.10	[email protected]%TCu
CHSDD0008	8287768	787665	706	192.90	-50	42.50	153.17	155.00	1.83	0.64	[email protected]%TCu
CHSDD0008	8287768	787665	706	192.90	-50	42.50	159.00	184.00	25.00	1.27	[email protected]%TCu
CHSDD0009	8287442	787919	697	250.20	-50	40.00	68.00	70.00	2.00	0.56	[email protected]%TCu
CHSDD0009	8287442	787919	697	250.20	-50	40.00	128.00	131.00	3.00	0.45	[email protected]%TCu
CHSDD0009	8287442	787919	697	250.20	-50	40.00	134.00	135.00	1.00	1.09	[email protected]%TCu
CHSDD0009	8287442	787919	697	250.20	-50	40.00	206.00	209.00	3.00	1.03	[email protected]%TCu
CHSDD0010	8287655	787812	689	200.74	-50	42.50	57.00	58.00	1.00	0.35	[email protected]%TCu
CHSDD0010	8287655	787812	689	200.74	-50	42.50	60.00	62.00	2.00	0.49	[email protected]%TCu
CHSDD0010	8287655	787812	689	200.74	-50	42.50	141.00	143.00	2.00	0.60	[email protected]%TCu
CHSDD0012	8287761	788031	682	150.34	-50	42.50	81.00	85.00	4.00	1.22	[email protected]%TCu
CHSDD0013	8287420	788155	675	200.73	-50	42.50	40.00	50.00	10.00	0.77	[email protected]%TCu
CHSDD0013	8287420	788155	675	200.73	-50	42.50	135.00	138.00	3.00	1.49	[email protected]%TCu
CHSDD0014	8287491	788207	677	150.00	-50	42.50	87.00	92.00	5.00	1.58	[email protected]%TCu
CHSDD0014	8287491	788207	677	150.00	-50	42.50	133.00	134.00	1.00	0.38	[email protected]%TCu
CHSDD0015	8287292	788312	685	200.90	-50	45.00	48.00	50.00	2.00	0.49	[email protected]% TCu
CHSDD0015	8287292	788312	685	200.90	-50	45.00	162.00	163.00	1.000	0.98	[email protected]% TCu
NOTE: INTERCEPTS WERE CALC		ULATED@ 0.30% CU MINIMUM			CUT OFF DOWN	HOLE WIDTH

3.0 Kangaluwi Prospect

The host rocks at the Kangaluwi Prospect comprise sheared and brecciated metasediments and metavolcanics of the Proterozoic-aged Muva group, striking northwest - southeast. Mineralisation dips moderately to the southwest at approximately 30 – 40, within a sheared northern limb of an overturned, east-southeast plunging synform.

Mineralisation at Kangaluwi consists of chalcopyrite, bornite, malachite and azurite. Chalcopyrite dominates in fresh rock, comprising disseminated - massive aggregates, spatially associated with cross cutting veins, breccias and shear zones. Mineralised zones average 10m in thickness, occasionally reaching 30m. Current interpretations suggest multiple mineralised zones may exist which broaden at depth and increase in grade, linked to the presence of bornite.

Zambezi Resources Limited Kangaluwi Copper Project

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Figure 10: Kangaluwi Drilled Holes – Plan Section

4.0 Chalimbana Resources Limited

The Company intends to create a new company around its uranium prospects, held by its wholly owned subsidiary Chalimbana Resources Limited. This will form a new ASX listing and ZRL shareholders will, subject to regulatory requirements, get a preferential allocation of IPO subscription shares.

5.0 Mpande Limestone Limited

Mpande Limestone Limited, a wholly owned subsidiary of Mwembeshi Resources Limited (MRL) holds two tenements with a high quality limestone resource, close to the town of Chilanga, a well-known limestone and cement producing area. The aim is to quarry the limestone to produce high quality metallurgical lime and other industrial commodity chemicals to supply Zambia’s Copperbelt and construction industry.

Zambezi Resources Limited Kangaluwi Copper Project

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6.0 Cheowa Resources Limited

The Company has a 49% interest in Cheowa Resources Limited (Cheowa), a joint venture company with Glencore International AG (Glencore) who owns 51% (after spending $16 million on the tenements). Cheowa has three prospects, Cheowa (6 Mt @ 1% Cu), Chayinda (3.3 Mt @ 2.1% Cu) and Chalimbana (5.3 Mt @ 0.8% Cu). Glencore is currently planning drilling programs and budgets to further the project development.

Use of Funds

The funds raised under the Rights Issue will be applied within the coming 12 months directly towards working capital, exploration and development costs associated with the Kangaluwi Copper Project. Together with the funds available under the Convertible Note Facility, the Company will have sufficient funding earmarked for its feasibility study towards the development of the Kangaluwi Copper Project.

Summar y

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The Company has undertaken some 45,000 m of reverse circulation and 10,000 m of diamond drilling, based on detailed geochemical and geophysical investigations.
The Company’s resource base is estimated at 23.4 Mt grading 0.85% Cu for 200,000 t of contained copper from Kangaluwi and Chisawa, not including Kalulu which has been previously estimated at 11 Mt @ 0.89% Cu for 98,000 tonnes of contained copper.
The current and planned drilling program of +/- 28,000 m will establish a new resource estimate for copper and gold, as a base for future bankable feasibility studies.
Proceeds from the Rights Issue and the Convertible Note facilities will provide the Company with valuable funding towards the feasibility study for the development of the Kangaluwi Copper Project.

Ke Risks y

The principal risks associated with an investment in Zambezi include, but are not limited to, those detailed below.

Risk associated with the convertible note facility with LRF (‘Facility’)

Under the terms of the Facility, the Company is required to obtain all necessary shareholder approvals by 16 December 2011. A notice of meeting seeking these approvals will be released by the Company shortly. Failure to obtain shareholder approval will constitute an event of default under

Zambezi Resources Limited Kangaluwi Copper Project

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the Facility, entitling LRF to demand the repayment of all amounts outstanding – including the $5 million drawn down on 28 September 2011. The Company has already spent most of the amount drawn down to fund its drilling program. As a result, if shareholder approval of the Facility is not obtained and LRF elects to demand the repayment of amount drawn down, then Zambezi will have to immediately explore alternative funding arrangements and shareholders will not receive any of the benefits of the funding provided through the Facility. If that occurs and Zambezi is unable to find alternative funding at an acceptable cost, then it may not be able to continue as a going concern.

In addition, the Facility includes a condition that if the Rights Issue does not raise at least $4 million, the Company will use best endeavours to raise any shortfall by 30 June 2012 through a further equity raising. If the Company is unable to raise the shortfall as required by the Facility, then it may need to renegotiate the terms of the Facility with LRF. This may also materially impact on its ability to implement its plans in the manner set out above and its ability to continue as a going concern given that it has drawn down $5 million of the Facility.

Exploration and development risk

Exploration is a high risk activity that requires large amounts of expenditure over extended periods of time. Currently, there are no defined mineral reserves on Zambezi’s projects. Zambezi intends to use funds raised under the Rights Issue to fund exploration programs to confirm the drilling results set out in this presentation. There can be no guarantee that the planned exploration programs will lead to the discovery of a commercial deposit or a commercial mining operation.

While Zambezi’s estimates comply with the JORC Code, the exploration results presented are expressions of judgment based on knowledge, experience and industry practice, and may require revisions following further exploration and future production experience. Estimates valid when made may change significantly when new information becomes available.

Sovereign risk

Zambezi is pursuing projects in Africa and so is subject to the risks associated with operating in that region of the world. These risks may include economic, social or political instability or change, hyperinflation, currency convertibility or instability and changes of law affecting foreign ownership, government participation, taxation, working conditions, rates of exchange, exchange control, exploration licensing, export duties, repatriation of income or return of capital, environmental protection, mine safety, labour relations as well as government control over mineral properties or government regulations that require the employment of local staff or contractors or require other benefits to be provided to local residents.

Any future material adverse changes in government policies or legislation in African countries that affect foreign ownership, mineral exploration, development or mining activities may affect the viability and profitability of Zambezi and its projects.

No profit to date

It is not possible to evaluate Zambezi’s prospects based on past performance. Since Zambezi intends to continue investing in its exploration and development program, the board anticipates that Zambezi may make losses in the foreseeable future.

While the board has confidence in Zambezi’s future revenue-earning potential, there can be no certainty that Zambezi will achieve or sustain profitability or achieve or sustain positive cash flow from its operating activities.

Zambezi Resources Limited Kangaluwi Copper Project

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Title risk

The tenements in which Zambezi has an interest are subject to various conditions, obligations and terms. If renewal is required this may be at the discretion of the relevant government minister or official. In addition, Zambezi will have to receive regulatory and environmental approval to convert its prospecting licences into production tenements. There is a risk that these approvals may not be obtained. If approval for renewal or conversion is refused, Zambezi will suffer a loss of the opportunity to undertake further exploration and/or exploitation of the tenement.

Commodity price and exchange rate risk

The revenue Zambezi may derive through the sale of copper and other commodities, should it be successful through its exploration activities, exposes its potential income to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of Zambezi. These factors include, among others, supply and demand fluctuations for precious metals, technological advancements, forward selling activities and other macro-economic factors. Further, international prices of various commodities are denominated in United States dollars, whereas the income and expenditure of Zambezi are and will be taken into account in United States dollars, exposing Zambezi to the fluctuations and volatility of the rate of exchange.

Operational risk

Zambezi’s operations may be affected by various factors which are beyond its control. These include a failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration or mining, operational and technical difficulties encountered in mining, commissioning or operating plant, adverse weather conditions, industrial and environmental accidents, industrial disputes, fire, explosions and other incidents beyond its control. These risks could also result in damage to production facilities, personal injury, environmental damage, business interruption, and possible legal liability.

Future capital needs

Further funding of projects may be required by Zambezi to support its on-going activities and operations, including finalisation of the bankable feasibility study for the Kangaluwi Copper Project. There can be no assurance that such funding will be available on satisfactory terms or at all. Any inability to obtain funding will adversely affect the business and financial condition of Zambezi and, consequently, its performance. A failure to meet cash calls would result in default in joint venture obligations which, if not remedied, could result in forfeiture of permits or concessions.

Share price variations

The shares offered under the Rights Issue are to be quoted on ASX, where their price may rise or fall in relation to the Offer Price. The shares issued under the Rights Issue carry no guarantee in respect of profitability, dividends, return of capital, or the price at which they may trade on ASX. The value of the shares will be determined by the market and will be subject to a range of factors beyond the control of Zambezi and its directors and officers. Such factors include, but are not limited to, the demand for and availability of shares, movements in domestic interest rates, exchange rates, fluctuations in stock markets and general domestic and economic activity. Returns from an investment in the shares may also depend on general stock market conditions as well as the performance of Zambezi. There can be no guarantee that an active market in the shares will develop or that the market price of the shares will not decline below the Offer Price.

Economic factors

Changes in economic and business conditions or government policies in Australia, Bermuda, Zambia or internationally may affect the fundamentals which underpin the projected growth of Zambezi’s

Zambezi Resources Limited Kangaluwi Copper Project

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target markets or its costs structure and profitability. Adverse changes in such things as the level of inflation, interest rates, exchange rates, government policy (including fiscal, monetary and regulatory policies), consumer spending and employment rates, among others, are outside the control of Zambezi and may result in material adverse impacts on the business or its operating results.

Regulatory risk

Changes in relevant taxes, legal and administrative regimes and government policies both in Bermuda and overseas may adversely affect the financial performance of Zambezi. Any change to the current rate of company income tax in jurisdictions where Zambezi operates will impact on shareholder returns. Any change to the current rates of income tax applying to individuals and trusts will similarly impact on shareholder returns. In addition, any change in tax arrangements between jurisdictions could have an adverse impact on profit margins and any future dividends.

Competent Persons Statement

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Ms Chiedza Nematadzira BSc Hon Geology and Borniface Nquni, MAIG, of Caracle Creek Consulting Zambia who are both Competent Persons as defined by the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2004 Edition) and who consent to the inclusion in this report of the matters based on the information in the form and context in which it appears.

The information in this announcement that relates to Exploration Results is based on information compiled by Geoff Booth, Consulting Geologist. Geoff Booth is employed as a consultant for Zambezi Resources and is also a Fellow of the Australasian Institute of Mining and Metallurgy and 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”. Geoff Booth consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Qualifying Statement

‐ ‐ This release may include forward looking statements. These forward looking statements are based on ‐ Zambezi’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Zambezi, which could cause actual results to differ materially from such statements. Zambezi makes no undertaking to subsequently ‐ update or revise the forward looking statements made in this release, to reflect the circumstances or events after the date of this release.

How to Apply

1 Overview of the Entitlement Offer

Zambezi intends to raise approximately AUD$4.2 million through the Entitlement Offer.

New Shares issued under the Entitlement Offer will be issued on a fully paid basis and will rank equally in all respects with existing ordinary Zambezi shares from their date of issue.

2 The Entitlement Offer

Eligible Shareholders (as defined in the “Important Information” section below) are being offered the opportunity to subscribe for 1 New Share for every 3 Zambezi ordinary shares ( Shares ) held at 5:00pm (Perth time) on 9 December 2011 ( Entitlement ), at the offer price of $0.01 per New Share ( Offer Price ).

Eligible Shareholders may also apply for New Shares in excess of their Entitlement ( Additional New Shares ). Please note that Additional New Shares will only be allocated to Eligible Shareholders, if and to the extent that Zambezi so determines in its absolute discretion and subject to the Corporations Act and the Listing Rules, having regard to the circumstances as at the time of the close of the Entitlement Offer. Any Additional New Shares will be limited to the extent that there are sufficient New Shares from Eligible Shareholders who do not take up their full Entitlements or from New Shares that would have been offered to Ineligible Shareholders if they had been entitled to participate in the Entitlement Offer. Zambezi may apply any scale-back (in its absolute discretion).

The Entitlement Offer is being made pursuant to provisions of the Corporations Act which allow rights issues to be offered without a prospectus. As a result, it is important for Eligible Shareholders to read and understand the information on Zambezi and the Entitlement Offer made publicly available before taking up all or part of their Entitlement or applying for Additional New Shares.

In particular, please refer to this booklet, Zambezi’s interim and annual reports and other announcements made available at the ASX website, www.asx.com.au (including the Zambezi Quarterly Report for the quarter ending 30 September 2011 that was released to ASX on 28 October 2011).

Your Entitlement is set out on the accompanying Entitlement and Acceptance Form and has been calculated as 1 New Share for every 3 Shares you held as at the Record Date of 5:00pm (Perth time) on 9 December 2011. If you have more than one holding of Shares, you will be sent more than one personalised Entitlement and Acceptance Form and you will have separate Entitlements for each separate holding. All New Shares (including any Additional New Shares) issued under the Entitlement Offer will rank equally with issued Shares.

3 Consider the Entitlement Offer in light of your particular investment objectives and circumstances

Please consult with your stockbroker, accountant or other independent professional adviser if you have any queries or are uncertain about any aspects of the Entitlement Offer.

You should also refer to the “Key Risks” section of the investor presentation released to ASX on 1 December 2011 and included in this Offer Booklet.

4 Timing of acceptance

To participate in the Entitlement Offer, your payment must be received no later than the close of the Entitlement Offer at 5:00pm (Perth time) on 29 December 2011.

In this Offer Booklet, the period between the Entitlement Offer opening date and closing date is referred to as the Entitlement Offer Period .

5 Complete and return the accompanying Entitlement and Acceptance Form with your Application Monies or make a payment by BPAY

If you decide to take up all or part of your Entitlement or apply for Additional New Shares, please complete and return the Entitlement and Acceptance Form with the requisite Application Monies OR pay your Application Monies via BPAY by following the instructions set out on the Entitlement and Acceptance Form.

Zambezi will treat you as applying for as many New Shares as your payment will pay for in full, subject to any scale-back it may determine to implement, in its absolute discretion, in respect of Additional New Shares. Amounts received by Zambezi in excess of your Entitlement ( Excess Amount ) may be treated as an application to apply for as many Additional New Shares as your Excess Amount will pay for in full. If you are paying by BPAY, please make sure to use the specific Biller Code and unique Customer Reference Number ( CRN ) on the back of your personalised Entitlement and Acceptance Form. If you receive more than one personalised Entitlement and Acceptance Form, please only use the CRN specific to the Entitlement on that Form. If you inadvertently use the same CRN for more than one of your Entitlements, you may be deemed to have applied only for Additional New Shares on the Entitlement to which that CRN applies.

Entitlements cannot be traded or otherwise transferred on the ASX or any other exchange or privately.

If you take no action, you will not be allocated New Shares and your Entitlement will lapse. Your Entitlement to participate in the Entitlement Offer is non-renounceable and will not be tradeable or otherwise transferable. Shareholders who do not take up their Entitlements in full will not receive any payment or value for those Entitlements they do not take up.

If you take up and pay for all or part of your Entitlement before the close of the Entitlement Offer, you will be allotted your New Shares on 9 January 2012. If you apply for Additional New Shares then, subject to Zambezi’s absolute discretion to scale-back your application for Additional New Shares (in whole or part), you will be issued these on 9 January 2012. Zambezi’s decision on the number of New Shares to be allocated to you will be final.

Zambezi also reserves the right (in its absolute discretion) to reduce the number of New Shares allocated to Eligible Shareholders, or persons claiming to be Eligible Shareholders, if their claims prove to be overstated or if they or their nominees fail to provide information to substantiate their claims.

6 Acceptance of the Entitlement Offer

The method of acceptance of the Entitlement Offer will depend on your method of payment, being either:

by BPAY; or
by cheque, bank draft or money order.

By completing and returning your personalised Entitlement and Acceptance Form with the requisite Application Monies or making a payment by BPAY, you:

a) agree to be bound by the terms of this booklet and the rules of Zambezi’s constitution;
b) authorise Zambezi to register you as the holder(s) of the New Shares allotted to you;
c) declare that all details and statements made in the Entitlement and Acceptance Form are complete and accurate;
d) declare that you are over 18 years of age and have full legal capacity and power to perform all your rights and obligations under the Entitlement Offer;
e) acknowledge that once Zambezi receives the Entitlement and Acceptance Form or your payment by BPAY, you may not withdraw it except as allowed by law;
f) agree to apply for, and be issued with up to, the number of New Shares that you apply for at the Offer Price of $0.01 per New Share;
g) authorise Zambezi and its officers or agents to do anything on your behalf necessary for the New Shares to be issued to you, including to act on instructions of Zambezi’s Share Registry upon using the contact details set out in the Entitlement and Acceptance Form;
h) declare that you are the current registered holder(s) of the Shares in your name at the Record Date;
i) acknowledge that the information contained in this booklet is not investment advice or a recommendation that New Shares are suitable for you, given your investment objectives, financial situation or particular needs;
j) acknowledge the “Key Risks” section of the investor presentation included in this booklet;
k) authorise Zambezi and its directors to correct any errors in your Entitlement and Acceptance Form;
l) represent and warrant that the law of any other place does not prohibit you from being given this booklet or making an application for New Shares; and
m) represent and warrant that you are an Eligible Shareholder and have read and understood this Offer Booklet and the Entitlement and Acceptance Form and that you acknowledge the matters, and make the warranties and representations and agreements contained in this booklet and the Entitlement and Acceptance Form.

In addition, by completing and returning your personalised Entitlement and Acceptance Form with the requisite Application Monies or making a payment by BPAY, you will be deemed to have acknowledged, represented and warranted on behalf of each person on whose account you are acting that:

a) you are not in the United States and are not a U.S Person, and are not acting for the account or benefit of, a U.S. Person and are not otherwise a person to whom it would be illegal to make an offer or issue New Shares under the Entitlement Offer;
b) you acknowledge that the Entitlements and the New Shares have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdictions in the United States, or in any other jurisdiction outside Australia or New Zealand and accordingly, the New Shares may not be offered, sold or otherwise transferred except in accordance with an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws; and
c) you have not and will not send any materials relating to the Entitlement Offer to any person in the United States or that is a U.S. Person, or is acting for the account or benefit of a U.S. Person.

Payment by BPAY

For payment by BPAY please follow the instructions on the personalised Entitlement and Acceptance Form. You can only make a payment via BPAY if you are the holder of an account with an Australian financial institution that supports BPAY transactions.

Please note that should you choose to pay by BPAY:

you do not need to submit the personalised Entitlement and Acceptance Form but are taken to make the declarations on that Entitlement and Acceptance Form; and
if you do not pay for your full Entitlement, you are deemed to have taken up your Entitlement in respect of such whole number of New Shares which is covered in full by your Application Monies.

It is your responsibility to ensure that your BPAY payment is received by the Zambezi Share Registry by no later than 5:00pm (Perth time) on 29 December 2011. Practically, given that BPAY closes at 4:00pm (Perth time), you will need to ensure that your payment is received by that time. You should be aware that your financial institution may implement earlier cut-off times with regards to electronic payment, and you should therefore take this into consideration when making payment.

Any Application Monies received for more than your final allocation of New Shares and Additional New Shares will be refunded as soon as practicable after the close of the Entitlement Offer. No interest will be paid to Applicants on any Application Monies received or refunded.

Payment by cheque, bank draft or money order

For payment by cheque, bank draft or money order, you should complete your Entitlement and Acceptance Form in accordance with the instructions on the Form and return it accompanied by a cheque, bank draft or money order in Australian currency for the amount of the Application Monies, payable to “Zambezi Resources Limited” and crossed “Not Negotiable”.

Your cheque, bank draft or money order must be:

for an amount equal to AUD$0.01 multiplied by the number of New Shares (including any Additional New Shares) that you are applying for; and
in Australian currency drawn on an Australian branch of a financial institution.

You should ensure that sufficient funds are held in relevant account(s) to cover the Application Monies as your cheques will be processed on the day of receipt. If the amount of your cheque for Application Monies (or the amount for which the cheque clears in time for allocation) is insufficient to pay in full for the number of New Shares you have applied for in your personalised Entitlement and Acceptance Form, you will be taken to have applied for such lower number of whole New Shares as your cleared Application Monies will pay for (and to have specified that number of New Shares on your Entitlement and Acceptance Form). Alternatively, your application will not be accepted.

Cash payments will not be accepted. Receipts for payment will not be issued.

7 Mail

To participate in the Entitlement Offer, your payment must be received no later than the close of the Entitlement Offer at 5:00pm (Perth time) on 29 December 2011. Shareholders who make payment via cheque, bank draft or money order should mail their completed personalised Entitlement and Acceptance Form together with Application Monies to:

Zambezi Share Registry C/- Computershare Investor Services Pty Limited PO Box D182 Perth WA 6840

Important Information

This booklet (including the ASX announcements reproduced in it) and enclosed personalised Entitlement and Acceptance Form have been prepared by Zambezi. The information in this booklet is dated 1 December 2011 (other than the ASX announcements reproduced in it).

No party other than Zambezi has authorised or caused the issue of the information in this booklet, or takes any responsibility for, or makes, any statements, representations or undertakings in the information in this booklet.

The information in this booklet is important and requires your immediate attention.

You should read the information in this booklet carefully and in its entirety before deciding whether to invest in New Shares. In particular, you should consider the risk factors outlined in “Key Risks” section of the investor presentation released to ASX on 1 December 2011, any of which could affect the operating and financial performance of Zambezi or the value of an investment in Zambezi.

Zambezi has applied for the grant by ASX of official quotation of the New Shares. It is expected that normal trading will commence in relation to New Shares issued under the Entitlement Offer on 10 January 2012. Zambezi disclaims all liability (to the maximum extent permitted by law) to persons who trade New Shares before the New Shares are listed on the official list of ASX or receiving their confirmation of issue, whether on the basis of confirmation of the allocation provided by Zambezi or the Zambezi Share Registry.

1 Not a prospectus

The Entitlement Offer complies with the requirements of section 708AA of the Corporations Act as notionally modified by ASIC Class Orders [CO 07/571] and [CO 08/35]. Neither this Offer Booklet nor the Entitlement and Acceptance Form is a prospectus for the purposes of the Corporations Act. Accordingly, these documents do not contain all of the information which a prospective investor may require to make an investment decision. They do not, and are not required to, contain all of the information which would otherwise be required to be disclosed in a prospectus. They are not required to be, and will not be, lodged with ASIC. This Offer Booklet should be read in conjunction with Zambezi’s other periodic and continuous disclosure announcements to the ASX available at www.asx.com.au.

The New Shares being offered under this booklet are being offered to Eligible Shareholders with registered addresses in New Zealand in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (NZ). This booklet is not an investment statement or prospectus under New Zealand law, and may not contain all the information that an investment statement or prospectus under New Zealand law is required to contain.

2 Continuous disclosure

Zambezi is a ‘disclosing entity’ under the Corporations Act and is subject to regular reporting and disclosure obligations under the Corporations Act and the ASX Listing Rules, including the preparation of annual reports and half-yearly reports.

Zambezi is required to notify the ASX of information about specific events and matters as they arise for the purposes of the ASX making that information available to the stock

markets conducted by the ASX. In particular, Zambezi has an obligation under the ASX Listing Rules (subject to certain exceptions) to notify the ASX immediately of any information of which it is or becomes aware which a reasonable person would expect to have a material effect on the price or value of its shares. That information is available to the public from the ASX.

3 Eligible Shareholders

The information in this booklet contains an offer of New Shares to Eligible Shareholders in Australia or New Zealand and has been prepared in accordance with section 708AA of the Corporations Act as notionally modified by ASIC Class Orders [CO 07/571] and [CO 08/35].

Eligible Shareholders are those holders of Shares who:

are registered as a holder of Shares as at 5:00pm (Perth time) on 9 December 2011;
have a registered address in Australia or New Zealand;
are not in the United States and are neither a U.S. Person nor acting for the account or benefit of a U.S. Person; and
are eligible under all applicable securities laws to receive an offer under the Entitlement Offer.

4 Additional New Shares

Zambezi reserves the right to allot any Additional New Shares to the extent that Zambezi so determines in its absolute discretion, having regard to the circumstances as at the time of the close of the Entitlement Offer. Any New Shares in excess of Entitlements will be limited to the extent that there are sufficient New Shares from Eligible Shareholders who do not take up their full Entitlements or from New Shares that would have been offered to Ineligible Shareholders if they had been entitled to participate in the Entitlement Offer.

If you apply for Additional New Shares then, subject to Zambezi’s absolute discretion to scale-back your application for Additional New Shares (in whole or part), you will be issued these on 9 January 2012. Zambezi’s decision on the number of Additional New Shares to be allocated to you will be final.

5 No cooling off rights

Cooling off rights do not apply to an investment in New Shares. You cannot, in most circumstances, withdraw your application for New Shares once it has been accepted.

6 No Entitlements trading

Entitlements are non-renounceable and cannot be traded on ASX or any other exchange, nor can they be privately transferred.

7 Not investment advice

The information in this booklet is not a prospectus under the Corporations Act and has not been lodged with ASIC. Neither is it financial product advice, and it has been prepared without taking into account your investment objectives, financial circumstances or particular needs. Zambezi is not licensed to provide financial product advice in respect of the New Shares. The information in this booklet does not purport to contain all the information that you may require to evaluate a possible application for New Shares.

Before deciding whether to apply for New Shares, you should consider whether they are a suitable investment for you in light of your own investment objectives and financial circumstances and having regard to the merits or risks involved. If, after reading the information in this booklet, you have any questions about the Entitlement Offer, you should contact your stockbroker, accountant or other independent professional adviser.

8 Taxation

Taxation implications will vary depending on the individual circumstances of individual investors. You should obtain your own professional advice before deciding whether to invest.

9 Rounding of Entitlements

Where fractions arise in the calculation of Entitlements, they will be rounded up to the nearest whole number of New Shares.

10 Information availability

Eligible Shareholders in Australia and New Zealand can obtain a copy of this booklet during the period of the Entitlement Offer on the ASX website at www.asx.com.au or by calling the Zambezi Share Registry. Persons who access the electronic version of this booklet should ensure that they download and read the entire booklet. The electronic version of this booklet on the ASX website will not include an Entitlement and Acceptance Form. A replacement Entitlement and Acceptance Form can be requested by calling the Zambezi Share Registry on 08 9323 2000 (within Australia) or +61 8 9323 2000 (from outside Australia) at any time from 8.30am to 5pm (Perth time) Monday to Friday during the Entitlement Offer Period.

Neither the information in this booklet nor the accompanying Entitlement and Acceptance Form constitutes an offer of securities for sale in the United States or to persons that are, or are acting for the account or benefit of, a U.S. Person. Neither this information nor the accompanying Entitlement and Acceptance Form may be distributed to or relied upon by persons in the United States or that are, or are acting on behalf of or for the account or benefit of, a U.S. Person, or otherwise distributed in the United States.

11 Future performance and forward-looking statements

Neither Zambezi nor any other person warrants or guarantees the future performance of the New Shares or any return on any investment made pursuant to the Entitlement Offer. Forward-looking statements, opinions and estimates provided in the information in this booklet are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions.

Forward-looking statements including forecasts, projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. They are subject to known and unknown risks, uncertainties and assumptions, many of which are outside the control of Zambezi and the Board, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by any forward-looking statements in this booklet.

12 Past performance

Investors should note that the past share performance of Zambezi shares provides no guidance as to future price performance.

13 Governing law

This booklet, the Entitlement Offer and the contracts formed on acceptance of the Entitlement and Acceptance Forms are governed by the laws applicable in Western Australia, Australia. Each applicant for New Shares submits to the non-exclusive jurisdiction of the courts of Western Australia, Australia.

14 Foreign jurisdictions

The information in this booklet has been prepared to comply with the requirements of the securities laws of Australia and New Zealand.

The New Shares being offered under the information in this booklet are being offered to Eligible Shareholders with registered addresses in New Zealand in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). The information in this booklet is not an investment statement or prospectus under New Zealand law, and may not contain all the information that an investment statement or prospectus under New Zealand law is required to contain.

The information in this booklet does not constitute an offer in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer. No action has been taken to register or qualify the Entitlement Offer, the Entitlements or the New Shares, or otherwise permit the public offering of the New Shares, in any jurisdiction other than Australia and New Zealand. Shareholders who are nominees, trustees or custodians are therefore advised to seek independent advice as to how to proceed.

The distribution of the information in this booklet (including an electronic copy) outside Australia and New Zealand is restricted by law. If you come into possession of the information in this booklet, you should observe such restrictions and should seek your own advice on such restrictions.

Any non-compliance with these restrictions may contravene applicable securities laws. The Entitlements and the New Shares have not been, or will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States. The Entitlements may not be taken up by persons in the United States or by persons who are, or are acting for the account or benefit of a U.S. Person, and the New Shares may not be offered, sold or resold in the United States or to, or for the account or benefit of, a U.S. Person, except in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and the applicable securities laws of any state or other jurisdiction in the United States. Accordingly, the New Shares may

constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act and, for so long as the New Shares remain restricted securities, the New Shares may not be deposited in any unrestricted American Depositary Receipt facility with respect to the securities of Zambezi.

15 Underwriting

The Rights Issue is not underwritten.

16 Option holders

Existing option holders will not be entitled to participate in the Entitlement Offer unless they:

have become entitled to exercise their existing options under the terms of their issue and do so prior to the Record Date; and
participate in the Entitlement Offer as a result of being a holder of Shares registered on the register of Zambezi on the Record Date.

17 Disclaimer of representations

No person is authorised to give any information, or to make any representation, in connection with the Entitlement Offer that is not contained in this booklet.

Any information or representation that is not in this booklet may not be relied on as having been authorised by Zambezi, or its related bodies corporate in connection with the Entitlement Offer. Except as required by law, and only to the extent so required, none of Zambezi, or any other person, warrants or guarantees the future performance of Zambezi or any return on any investment made pursuant to the information in this booklet.

18 Withdrawal of Entitlement Offer

Zambezi reserves the right to withdraw all or part of the Entitlement Offer and this Information at any time, subject to applicable laws, in which case Zambezi will refund application monies in relation to New Shares not already issued in accordance with the Corporations Act and without payment of interest.

To the fullest extent permitted by law, you agree that any application monies paid by you to Zambezi will not entitle you to any interest against Zambezi and that any interest earned in respect of application monies will belong to Zambezi.

19 Information about CDIs

The jurisdiction in which the Company is incorporated does not recognise the CHESS system of holding securities or electronic transfer of legal title. Accordingly, as required by the Listing Rules, under the Rights Issue the Company is offering applicants CDIs as an alternative to holding UK or Bermuda registered share/option certificates. No certificates will be issued in Australia and the only security tradeable on the ASX will be CDIs. CDIs are units of beneficial ownership in foreign securities, the legal title of which is vested in CHESS Depositary Nominees Pty Ltd. The main difference between holding CDIs and holding Shares is that the holder of CDIs has beneficial ownership of the equivalent number of Shares in the Company instead of legal title. The Shares and

Options are registered in the name of CHESS Depositary Nominees Pty Ltd and held by that entity on behalf of and for the benefit of the security holder.

The ASX Settlement Operating Rules, which are recognised under the Corporations Act, contain provisions to ensure that holders of CDIs over Shares have all the direct economic benefits of holding Shares. With the exception of voting arrangements, CDI Shareholders have the same rights as holders whose securities are legally registered in their own name. The voting exception relates to attending Shareholder meetings and voting on a show of hands. While CDI Shareholders have the right to vote on a poll (whereupon proxies previously lodged can be counted), they are not able to personally vote on a show of hands. However, the ASX Settlement Operating Rules require the Company to give notice to any meeting of Shareholders. The notice must include a form permitting the CDI Shareholders to direct CHESS Depositary Nominees Pty Ltd to cast proxy votes according to the wishes of the CDI Shareholders on whose behalf it holds Shares. The Company is obliged to collect and process these directions. CDI Shareholders wishing to attend personally and vote at a Shareholder meeting must convert their CDIs into certificated Shares prior to the meeting. The CDI Shareholder should contact the Company’s share registry in advance to find out how long the conversion process will take.

Registered Australian Office

17 Ord Street West Perth WA 6005 Telephone: +61 (0) 8 6555 1879

Stock Exchange Listing

Zambezi ordinary shares are listed on the Australian Securities Exchange ( ASX ) (code: ZRL)

Website

To view annual reports, shareholder and company information, news announcements, background information on Zambezi’s businesses and historical information, visit Zambezi’s website at www.zambeziresources.com

Zambezi Share Registry

Computershare Investor Services Pty Limited Level 2, Reserve Bank Building 45 St Georges Terrace Perth, Western Australia 6000

Telephone: 08 9323 2000 (within Australia) and +61 8 9323 2000 (outside Australia) open between 8.30am and 5pm (Perth time) Monday to Friday during the Entitlement Offer Period.

Shareholders who make payment via cheque, bank draft or money order should mail their completed personalised Entitlement and Acceptance Form together with Application Monies to: Zambezi Share Registry C/- Computershare Investor Services Pty Limited PO Box D182 Perth, Western Australia 6840

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TREK METALS LIMITED — Capital/Financing Update 2011

65923_rns_2011-11-30_26908903-b92f-48fe-adb7-eb29f6548474.pdf

ZAMBEZI RESOURCES LIMITED

Entitlement Offer Booklet

Table of contents

Chairman’s letter

1 December 2011

Entitlement Offer

Other information

KEY DATES

Zambezi Resources Limited

Kangaluwi Copper Project Investor Presentation

Disclaimer

Summary information

Not financial product advice

Not an offer

Past performance

Forward-looking information

Risks

Financial data

Investment Hi hli hts g g

Cor orate Sna shot p p

Capital Structure (as at 24.11.2011)

Directors and Senior Management

Top Shareholders (as at 24.11.2011)

Cor orate Structure p

Tenement Ma p

Zambia

Mining Culture

Infrastructure

Kan aluwi Co er Pro ect Overview g pp j

Introduction

Geological Setting

Ex loration Histor p y

Mineral Resource Estimate

2011 Exploration at Kangaluwi Copper Project

1.0 Kalulu Prospect

1.1 Introduction

1.2 Results

2.0 Chisawa Prospect

2.1 Introduction

2.2 Results

3.0 Kangaluwi Prospect

4.0 Chalimbana Resources Limited

5.0 Mpande Limestone Limited

6.0 Cheowa Resources Limited

Use of Funds

Summar y

Ke Risks y

Risk associated with the convertible note facility with LRF (‘Facility’)

Exploration and development risk

Sovereign risk

No profit to date

Title risk

Commodity price and exchange rate risk

Operational risk

Future capital needs

Share price variations

Economic factors

Regulatory risk

Competent Persons Statement

Qualifying Statement

How to Apply

1 Overview of the Entitlement Offer

2 The Entitlement Offer

3 Consider the Entitlement Offer in light of your particular investment objectives and circumstances

4 Timing of acceptance

5 Complete and return the accompanying Entitlement and Acceptance Form with your Application Monies or make a payment by BPAY

6 Acceptance of the Entitlement Offer

Payment by BPAY

Payment by cheque, bank draft or money order

Important Information

The information in this booklet is important and requires your immediate attention.

1 Not a prospectus

2 Continuous disclosure

3 Eligible Shareholders

4 Additional New Shares

6 No Entitlements trading

7 Not investment advice

TREK METALS LIMITED Capital/Financing Update 2011