VERITY RESOURCES LIMITED — Capital/Financing Update 2011

Jan 12, 2011

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TO: COMPANY ANNOUNCEMENTS OFFICE ASX LIMITED

Market Cap

Cash

DATE: 13 JANUARY 2011

DESPATCH OF NOTICE OF NON-RENOUNCEABLE RIGHTS ISSUE

Issued Capital

Unlisted Options

Botswana Metals Limited (“BML”) provides the following information as required by Appendix 7A of the ASX Listing Rules.

Full details of the terms of the Rights Issue and the offer has been released to ASX earlier today.

Substantial shareholders

In accordance with the Timetable and Important Dates the Prospectus, Entitlement and Acceptance Form will be despatched to Eligible Shareholders on 25 January 2011.

Patrick Volpe

Directors

Chairman

Registered Office

Contact

Media Relations

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ABN 96 122 995 073
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ABN 96 122 995 073

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13 January 2011

Dear BML Shareholder

Non-renounceable 1:3 Rights Issue at $0.08 (eight cents) per share

On 13 December 2010, Botswana Metals Limited (“BML” or “the Company”) announced to the Australian Securities Exchange (“ASX”) a 1:3 pro-rata offer to eligible BML shareholders of New Shares at $0.08 (eight cents) per share, plus two Attaching Options at no cost for each New Share subscribed for exercisable at $0.10 at any time up to 5pm AEST on 30 June 2013, (“the Rights Issue”).

The Rights Issue is only open to eligible shareholders, being shareholders whose registered address is in Australia or New Zealand.

This letter gives BML shareholders brief details of the Rights Issue, certain information required under the ASX Listing Rules, background, proposed use of funds and the Timetable and Important Dates for the Rights Issue.

Under the Rights Issue, eligible shareholders registered at 5pm Australian Eastern Standard Time (AEST) on 21 January 2011 (“the Record Date”) will have the right to apply for one (1) fully paid ordinary share (“New Share”) for every three (3) shares held. The Record Date is the date for determining those shareholders entitled to participate in the issue.

After the Record Date you will receive a Prospectus and an Entitlement and Acceptance Form. Those documents will contain full details of the Offer and your New Share entitlement.

Full details of the terms of the Rights Issue and the offer are contained in the Prospectus which:

• Has been released to the ASX and is available on the ASX website under Announcements for Botswana Metals Limited (ASX code: BML)

• Is available on the BML website at www.botswanametals.com.au

Botswana Metals Limited

REGISTERED OFFICE Suite 5.10, 737 Burwood Rd, Hawthorn, Australia Telephone +61 3 9813 5888 Facsimile +61 3 9813 2668 Email info@botswanametals.com.au

www.botswanametals.com.au

Price for New Shares:

The Issue Price is $0.08 (eight cents) per share. The New Shares will be fully paid ordinary shares and will rank equally with the shares currently held by BML shareholders.

At $0.08 the offer price is at approximately a 40% discount to the closing price of BML shares on the ASX on 12 January 2011, the day before the lodgement of the Prospectus.

Shareholders will be able to apply for all or part of their entitlements to New Shares. If you have fractions of entitlements then they will be rounded up to the next whole number in determining your share entitlements. The rights to subscribe for New Shares will be non-renounceable and may not be transferred. The Rights Issue is fully underwritten and any New Shares not subscribed for by eligible shareholders will form part any shortfall that will be taken up by the Underwriters – refer section below titled “Underwriting”. Rights will not be traded on the ASX and rights not taken up by the Closing Date will form part of the shortfall.

The total number and class of securities in BML including the maximum number of New Shares to be issued in this rights issue are as follows:

Shares
Shares currently on issue	106,421,094
New Shares offered pursuant to the Offer	35,473,698
Total Shares on issue after the Closing	141,894,792
Date
Options
Options currently on issue	4,149,998
Attaching Options offered pursuant to the Offer	70,947,396
Total Options on issue after the Closing	75,097,394
Date

BML will issue a maximum of 35,473,698 New Shares at the Issue Price of $0.08 (eight cents) per share. If fully subscribed, the issue will raise $2,837,895 before expenses.

The Company has applied to the ASX for quotation of the New Shares and the Attaching Options to be issued to shareholders.

Botswana Metals Limited

REGISTERED OFFICE Suite 5.10, 737 Burwood Rd, Hawthorn, Australia Telephone +61 3 9813 5888 Facsimile +61 3 9813 2668 Email info@botswanametals.com.au

www.botswanametals.com.au

Timetable and Important Dates for the Rights Issue

Event	Date
Announcement of the Offer	13 December 2010
Lodge Prospectus with ASIC and ASX	13 January 2011
Lodge Appendix 3B with the ASX	13 January 2011
Notice sent to shareholders containing	13 January 2011
information required by Appendix 3B
Existing Shares quoted on “ex” basis	17 January 2011
Record Date to determine Entitlements under	21 January 2011
the Offer	5:00pm (AEST)
Prospectus and Entitlement and Acceptance	25 January 2011
Forms despatched to Eligible Shareholders (Opening Date)	9:00am (AEST)
Final date and time for receipt of acceptance	9 February 2011
and payment in full (Closing Date)*	5:00pm (AEST)
Securities quoted on a deferred settlement	10 February 2011
basis
Despatch of holding statements	By 17 February 2011
Date of quotation of Securities issued under	By 17 February 2011
the Rights Issue*

*The Company reserves the right to extend the Closing Date or close the Offer early without notice. As such the date the Securities are expected to commence trading on ASX may vary.

Underwriting

The Rights Issue is fully underwritten by Trayburn Pty Ltd (ABN 42 006 048 639) (an entity associated with Mr Patrick Volpe), Bell IXL Investments Limited (ABN 80 113 669 908) (an entity associated with Mr Massimo Cellante) and Anne Woolrich (the spouse of Mr Paul Woolrich) (collectively the “Underwriters”). Each Underwriter is a related party of the Company by virtue of being an entity or person associated with a Director.

The Underwriters will each be paid a fee of 5% of their respective proportion of the underwritten amount to be paid in Shares and Attaching Options (on the same terms as the Offer) or in cash (at the election of each Underwriter), subject to the terms and conditions of their respective Underwriting Agreement, which is on arm’s length commercial terms and which is considered standard for agreements of this nature.

Botswana Metals Limited

www.botswanametals.com.au

REGISTERED OFFICE Suite 5.10, 737 Burwood Rd, Hawthorn, Australia Telephone +61 3 9813 5888 Facsimile +61 3 9813 2668 Email info@botswanametals.com.au

Full details of the underwriting, the Underwriters commitments, the commissions payable to the Underwriters and the potential effect of the underwriting of the Rights Issue by the Underwriters are contained in the Prospectus.

Use of Funds

The funds raised by the issue of the New Shares pursuant to the Offer (approximately $2,837,895), along with the current cash that BML has on hand, will be used to continue to aggressively explore the Company’s recent discoveries and other exploration activities as follows:

New Discoveries

Airstrip Copper: PL 110/94 (extension granted)

Dibete PL111/94 and 54/98 (awaiting advise from the Department of Mining and Minerals that an extension has been granted) Mabile North: PL 110/94: new anomalies zones discovered (extension granted)

Other Exploration Activities

Shashe River West and Shashe River East (PL44/2004 and PL 48/2004) where old working and ground geochemistry has shown potential targets for additional exploration. BML will also review all other tenements in its portfolio that have exploration potential for a discovery.

Further details of the Company’s exploration activities, operations and projects are contained in the Company’s market announcements to the ASX, all of which are posted on its website www.botswanametals.com.au

The Board encourages shareholders to support this Rights Issue.

Pat Volpe Chairman

Botswana Metals Limited

REGISTERED OFFICE Suite 5.10, 737 Burwood Rd, Hawthorn, Australia Telephone +61 3 9813 5888 Facsimile +61 3 9813 2668 Email info@botswanametals.com.au

www.botswanametals.com.au