TREK METALS LIMITED — Capital/Financing Update 2011

Jul 24, 2011

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ASX Announcement

25 July 2011

Zambezi announces a funding package of up to A$15 million to finance the advancement of its Kangaluwi Copper Project feasibility study

Zambezi Resources Limited (ASX: ZRL) ( Zambezi or the Company ) is pleased to announce that it has today accepted an offer from LinQ Capital Limited as responsible entity of the LinQ Resources Fund ( LRF ) for the provision of a secured A$10 million convertible note facility ( Facility ).

The Company also announces plans to undertake an equity raising by way of a rights issue to raise up to a further $A5 million ( Rights Issue ) on the terms set out below. The Rights Issue gives existing shareholders the opportunity to participate in the funding package.

The funds raised by the Facility and the Rights Issue will be applied by Zambezi towards working capital and exploration and development costs associated predominantly with its Kangaluwi Copper Project. These facilities will provide the Company with valuable funding for the following:

• Additional step out and infill drilling for resource expansion and definition at Chisawa, Kangaluwi and Kalulu deposits (Kangaluwi Project);

• Deeper drilling of the structures for stratigraphic control as well as to determine the down dip extent of the mineralisation;

• Testing additional oxide potential above the mineralised sulphide material with as shallow drilling program;

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ARBN 124 462 826

Bermuda: Canon’s Court 22 Victoria Street Hamilton HM12 Australia: 17 Ord Street West Perth PO Box 1796 WA 6872 Tel: (+61-8) 6555 1879 Fax: (+61-8) 9398 4104 Zambia: Mwembeshi Resources Limited Plot No. 5697 Beu Crescent Kalundu Lusaka Tel: +260 (0)211 291128

Stock Exchange Listing: ASX: ZRL Directors: Non-Executive Chairman: David Vilensky Non Executive Directors: Simon F Durack Emmanuel Heyndrickx Richard Procter CEO Frank Vanspeybroeck

• Finalising the feasibility study for the development of the Kangaluwi Project

Zambezi anticipates that the funding will be sufficient to finalise the above activities over the ensuing 12-18 months.

The Facility

The key terms of the proposed Facility are as follows:

• There will be two Tranches of convertible notes of A$5 million each.

• Each Tranche will have a term of 24 months and the notes will carry a coupon of 10% p.a.

• Tranche A is convertible into ordinary shares at the lower of 2.7 cents per share and a 30% premium to the final Rights Issue price. Tranche B is convertible into ordinary shares at the volume-weighted average price of Zambezi shares over the 5 days preceding the delivery by LRF of a conversion notice at that time.

• Tranche A and B can alternatively at the election of LRF each be converted into a 12.5% joint venture interest in the Projects, or to convert part of Tranches A and B into shares and part into a pro rata joint venture interest in the Projects.

• If LRF elects to take up a joint venture interest in the Projects, then Zambezi and LRF will form a joint venture for the development of the Projects in the relevant proportions. Zambezi will be the Operator of the joint venture and will govern the operating committee as majority interest holder. LRF will be able to elect to contribute, sell or dilute its interest during the term of the joint venture.

Drawdown on the funds to be made available under the Facility is subject to, among other things, the execution of formal legal documentation (to be agreed within 60 days or such later date as agreed) and LRF completing due diligence to its satisfaction within 60 days.

The Facility is also subject to shareholders’ approval to the extent required by the Listing Rules. Approximately $4.9 million of Tranche A can be drawn down against the current availability under Listing Rule 7.1. Shareholder approval is required within 90 days of the execution of formal legal documentation. Failure to do so will constitute an event of default, entitling LRF to demand the repayment of all amounts outstanding. A notice of meeting seeking the approvals described above, including an independent expert’s report, will be sent to shareholders in due course.

The Company will keep the market updated on progress towards satisfying these conditions to drawdown.

Rights Issue

The Company also plans to undertake a rights issue to raise approximately A$5 million. The Rights Issue will be completed through a pro rata non-renounceable entitlement offer to eligible shareholders in Zambezi in accordance with the indicative timetable set out below. The Company will seek underwriters for the Rights Issue before it closes.

Under the proposed Rights Issue, eligible shareholders will be invited to subscribe for 1 new Zambezi share for every 5 existing shares held on the record date at a price of 2 cents per share. The price represents a 20% discount to the closing price of the Company’s shares on ASX today of 2.5 cents.

If there is any shortfall under the Rights Issue, 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 underwriters engaged in relation to the Rights Issue; or

• Any other parties selected by the directors.

Any shortfall shares will be placed initially to underwriters and any additional remaining shares will be placed within 2 months of the closing date of the Rights Issue on the same terms as offered to shareholders under the Rights Issue.

The current proposed timetable for the Rights Issue is set out below. These dates are indicative only and Zambezi reserves the right to vary the dates for any reason (subject to the Corporations Act and the Listing Rules).

Event	Date
Lodge offer documentation and Appendix 3B	8 August 2011
Dispatch notice to shareholders informing them	9 August 2011
of Rights Issue
Shareholders trade on ‘ex’ entitlement basis	10 August 2011
Record date for determining entitlements to	16 August 2011
participate in Rights Issue
Completion of dispatch of offer documentation	18 August 2011
and entitlement and acceptance form to
shareholders
Acceptance close	2 September 2011
ASX notified of under subscriptions	7 September 2011
Holding statements dispatched to shareholders	12 September
Normal trading for new shares commences	13 September 2011

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

Under the Facility, the Company commits to raise at least A$4 million under the Rights Issue by 31 December 2011 . Failure to do so will constitute an event of default, entitling LRF to demand the repayment of all amounts outstanding.

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Frank Vanspeybroeck – CEO Phone: +61 (0)8 6555 1879

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

Zambezi Resources Limited

ARBN

124 462 826

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (eg, if options, exercise price and expiry date; if partly paid+securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Fully paid ordinary shares
	Approximately 251,691,381 fully paid ordinary shares pursuant to a rights issue announced on 21 July 2011 (“Rights Issue”)
	Fully paid ordinary shares issued for cash consideration

• See chapter 19 for defined terms.

24/10/2005 Appendix 3B Page 1

Appendix 3B New issue announcement

4 Do the[+] securities rank equally in all Yes – the shares to be issued under the Rights respects from the date of allotment Issue will rank equally in all respects with the with an existing[+] class of quoted +securities? existing ordinary shares on issue If the additional securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 7 Dates of entering+securities into uncertificated holdings or despatch of certificates 8 Number and +class of all +securities quoted on ASX (_including_the securities in clause 2 if applicable)	2 cents per share	2 cents per share
	The net proceeds of the Rights Issue will be applied to working capital and exploration and development costs predominantly associated with the Company’s Kangaluwi Copper Project
	12 September 2011
	Number	+Class
	After the Rights Issue, 1,510,148,285 (based on the number of fully paid ordinary shares on issue as at the date of this Appendix 3B and the maximum number of fully paid ordinary shares to be issued under the Rights Issue, subject to the effects of rounding)	Fully paid ordinary shares

• See chapter 19 for defined terms.

24/10/2005

Appendix 3B Page 2

Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (_including_the securities in clause 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	500,000 99,500,000 5,000,000 30,000,000 10,000,000 10,000,000	£0.20 options exp. 31/8/11 A$0.01 options exp. 30/11/12 A$0.02 options exp. 05/05/13 A$0.02 options exp. 31/05/13 A$0.025 options exp. 30/09/13 A$0.03 options exp. 30/09/13
	N/A

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has+security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	No
	Non-renounceable
	1 fully paid ordinary share for every 5 existing fully paid ordinary shares held on the record date
	Fully paid ordinary shares
	16 August 2011
	No
	Entitlements in relation to fractions of shares will be rounded up to the next whole share
	Shareholders in countries other than Australia and New Zealand will not be eligible to participate.
	1 September 2011

• See chapter 19 for defined terms.

Appendix 3B Page 3

1/1/2003

Appendix 3B New issue announcement

20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of +security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do+security holders sell their entitlements_in full_through a broker? 31 How do+security holders sell_part_ of their entitlements through a broker and accept for the balance?	TBA
	TBA
	TBA
	TBA
	TBA
	N/A
	Dispatch to be completed by 18 August 2011
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 4

1/1/2003

Appendix 3B New issue announcement

• 32 How do[+] security holders dispose of their entitlements (except by sale through a broker)?

N/A

• 33 +Despatch date

N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities ( tick one )

• (a)[Securities described in Part 1 ]

• (b)[All other securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories

• 1 - 1,000

• 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

Appendix 3B Page 5

1/1/2003

Appendix 3B New issue announcement

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted +securities? If the additional securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security) Number +Class 42 Number and[+] class of all[+] securities quoted on ASX ( including the securities in clause 38)

• See chapter 19 for defined terms.

Appendix 3B Page 6

1/1/2003

Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: Date: 25 July 2011 (Chief Financial Officer)

Print name: Pierre Malherbe

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• See chapter 19 for defined terms.

24/10/2005 Appendix 3B Page 7