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

NON-RENOUNCEABLE RIGHTS ISSUE

Issued Capital

Botswana Metals Limited (“BML”) releases the following in connection with the 1 for 3 Rights Issue at $0.08 (8 cents) plus 2 Attaching Options at nil cost announced to ASX on 13 December 2010:

Unlisted Options

• Prospectus dated 13 January 2011, and

• Draft Entitlement and Acceptance Form.

In accordance with the Timetable and Important Dates the Record Date for determining shareholders (Eligible Shareholders) entitled to participate in the Rights Issue and the 1 for 3 entitlement to New Shares will be 21 January 2011.

Substantial shareholders

Directors

The Prospectus, Entitlement and Acceptance Form will be despatched to Eligible Shareholders on 25 January 2011.

Patrick Volpe

Chairman

Registered Office

Contact

Media Relations

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ABN 96 122 995 073
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BOTSWANA METALS LIMITED

ABN 96 122 995 073

PROSPECTUS

A pro rata non-renounceable entitlement issue of 1 New Share for every 3 existing Shares held, plus 2 free Attaching Options for each New Share subscribed for (“ Rights Issue ”).

The Rights Issue closes at 5:00pm on 9 February 2011.

The issue is underwritten by entities and persons associated with the Directors of Botswana Metals Limited

IMPORTANT NOTICE The Securities offered by this Prospectus should be considered a speculative investment and potential investors should refer to Section 6 for further details concerning the risk factors. This document is important. It should be read in its entirety. If you do not understand its contents or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser. Neither Botswana Metals Limited nor any other person guarantees the performance of the Securities offered pursuant to this Prospectus, or the performance of Botswana Metals Limited, or the return of any investment.

Corporate Directory

Directors:	Patrick John Volpe (Executive Chairman)
	Massimo Livio Cellante
	Paul Woolrich
Company Secretary:	Richard Charles Baker
Registered Office:	Suite 5.10, Level 5
	737 Burwood Road
	HAWTHORN
	VICTORIA 3122
	Telephone (03) 9813 5888
	Facsimile (03) 9813 2668
Share Registry:	Advanced Share Registry Services Limited *
	Unit 2
	150 Stirling Highway
	NEDLANDS WA 6009
	Telephone (08) 9389 8033
	Facsimile (08) 9389 7871
Auditor:	William Buck Audit (Vic) Pty Ltd
	Level 1, 465 Auburn Road,
	HAWTHORN EAST VIC 3123
	Telephone (03) 9824 8555
	Fax (03) 9824 8580
Lawyers:	Mills Oakley Lawyers
	Level 6, 530 Collins Street
	MELBOURNE VIC 3000
	Telephone (03) 9670 9111
	Fax (03) 9605 0933
Stock Exchange:	ASX Limited *
	Level 45,
	Rialto South Tower
	525 Collins Street
	MELBOURNE VIC 3000

*These entities have not been involved in the preparation of this Prospectus and have not consented to being named in this Prospectus. They are named for information purposes only.

TABLE OF CONTENTS

Corporate Directory	Corporate Directory	2
1	Summary of Important Dates and Important Notes	4
2	Chairman’s letter	7
3	Details of the Offer	9
4	Purpose and Effect of the Offer	113
5	Rights and Liabilities attaching to New Shares	15
6	Risk Factors	18
7	Additional Information	24
8	Continuous Disclosure Obligations	28
9	Director’s authorisation	311
10	Glossary	322

1 Summary of Important Dates and Important Notes 1.1 Timetable and Important Dates

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.

1.2 Important Notices

Shareholders should read this document in its entirety and, if in doubt, should consult their professional advisors.

This Prospectus is dated 13 January 2011 and a copy of this Prospectus was lodged with ASIC on that date. ASIC and ASX take no responsibility for the content of this Prospectus.

The Expiry Date of the Prospectus is 13 months after the date the Prospectus was lodged with the ASIC. No Securities will be allotted or issued on the basis of this Prospectus after the Expiry Date. Securities allotted or issued pursuant to this Prospectus will be allotted or issued on the terms and conditions set out in this Prospectus.

No person is authorised to give information or to make any representation in connection with this Prospectus which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.

Certain terms and abbreviations used in this Prospectus have defined meanings, which are explained in Section 10 of this Prospectus.

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1.3 Overseas Shareholders

The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and therefore persons into whose possession this document comes should seek advice on and observe any such restrictions. Any failure to comply with these restrictions constitutes a violation of those laws. No action has been taken to register or qualify the Securities the subject of this Prospectus or otherwise permit a public offering of the Securities the subject of this Prospectus in any jurisdiction outside Australia or New Zealand.

This Offer is only open to Eligible Shareholders. No offer of Securities will be made to Shareholders resident outside Australia or New Zealand. In accordance with the ASX Listing Rules, and having regard to:

• (a) the number of holders resident outside Australia and New Zealand;

• (b) the number and value of New Shares the holders of Shares resident outside of Australia and New Zealand would be offered; and

• (c) the cost of complying with the legal requirements and the requirements of regulatory authorities in places other than Australia and New Zealand,

the Directors consider that it is unreasonable to make an offer to such persons and accordingly the Company will send each Shareholder to whom it will not make the offer details of the Rights Issue and advice that the Company will not offer Securities to that Shareholder.

The Offer contained in this Prospectus to Eligible Shareholders with registered addresses in New Zealand is made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). Members of the public in New Zealand who are not existing Shareholders on the Record Date are not entitled to apply for any Securities. Recipients may not send or otherwise distribute this Prospectus or the Application Form to any person outside Australia or New Zealand (other than to Eligible Shareholders).

1.4 Risk Factors

Eligible Shareholders should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus. For further information in relation to the risk factors of the Company please refer to Section 6 of this Prospectus.

1.5 Electronic Prospectus

Pursuant to Class Order 00/44, ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic Entitlement and Acceptance Forms on the basis of a paper prospectus lodged with the ASIC, and the publication of notices referring to an electronic prospectus or electronic Entitlement and Acceptance Form, subject to compliance with certain conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Entitlement and Acceptance Form. If you have not, please phone the Company on +61 3 9813 5888 and the Company will send you, for free, either a hard copy or a further electronic copy of the Prospectus, or both.

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The New Shares will only be issued on receipt of an Entitlement and Acceptance Form issued together with this Prospectus. The Company reserves the right not to accept an Entitlement and Acceptance Form from a person if it has reason to believe that when that person was given access to the electronic Entitlement and Acceptance Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

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2 Chairman’s letter

13 January 2011

Dear Shareholders,

I am pleased to present this opportunity to Eligible Shareholders to participate in a rights issue Offer made via this Prospectus to raise approximately $2.83 million.

The funds will be used for the exploration of several of Botswana Metals Limited (“BML” or “Company”) Prospecting Licences held in its exploration portfolio in Botswana.

The terms of this Offer are fully detailed in this prospectus in which Eligible Shareholders as at the Record Date will be offered 1 New Share at an issue price of 8 cents, for every 3 Shares held at the Record Date along with 2 Attaching Options for nil consideration, exercisable at 10 cents at any time up until 30 June 2013.

Your Board is fully focused on its exploration strategy for base and precious metals in Botswana and the Company’s recent exploration results have confirmed that this “single country focus” has proven successful. Two new discoveries were made during 2010 at Airstrip Copper and at Dibete for copper and silver whilst a review at Mabiele North of nickel and copper mineralisation has shown future anomalies extending the potential for further exploration.

In 2009/2010, the Company’s major exploration efforts were on Prospecting Licences 110/94 (covering the Mabiele North and Airstrip anomalies), 111/94 and 54/98 (covering Dibete) and 14/2003. These Prospecting Licence’s expired on 30 September 2010. An application to the Department of Geological Survey in Botswana for an extension of tenure has been made by the Company on the basis of a new discovery in accordance with the Mines and Minerals Act (Act No. 17 of 1999) of Botswana.

To date only PL110/94 has been successfully granted an extension for 18 months to 31 March 2012 by the Ministry of Minerals, Energy and Water Resources (“the Ministry”) in Botswana. Whilst the Board believes the Ministry should exercise the same process it has used on granting PL110/94 in respect of the other Prospecting Licences, Eligible Shareholders need to be aware that there is a risk that the three remaining expired Prospecting Licences may not be extended by the Ministry.

The rights issue is fully underwritten by entities associated with the Directors and predominately by an entity associated with me. This Rights Issue will raise approximately $2.83 million and with the cash on hand that the Company currently has, BML should have approximately $5.5 million at the completion of this Offer.

The purpose of the Offer is to ensure adequate funding is available for the Company’s proposed 12 month exploration and drilling program at Airstrip Copper and Dibete, both new discoveries (assuming PL111/94 and PL54/98 containing Dibete are extended) and for exploration at the Shashe River West and Shashe River East tenements, both of which expire on 30 June 2011. For these reasons, the Board needs to raise cash to aggressively explore both these new discoveries and apply the same exploration strategy

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that has been applied at the Airstrip Copper, Maibele North and Dibete prospects, to the two Shashe River Prospecting Licences that expire on 30 June 2011. As with PL111/94, PL54/98 and PL14/2003, Eligible Shareholders need to be aware that there is a risk that the Shashe River West and Shashe River East tenements may not be extended by the Ministry upon their expiration on 30 June 2011.

Accepting this planned exploration program will be high risk and costly, the Board has therefore decided to give Eligible Shareholders 2 Attaching Options as part of the offer consideration. This will provide Eligible Shareholders with an option to invest further funds into the Company at their own discretion by the exercise of their Attaching Options to acquire further Shares at any time up until the 30 June 2013. Should all Attaching Options be exercised prior to 30 June 2013, then the Company will receive approximately $7 million (which includes the $2.83 million raised by the issue of the New Shares) which will be used to fund the continued exploration program of BML’s exploration portfolio.

BML has already commenced initial ground work on the two northern tenements known as Shashe River West (PL48/2004) and Shashe River East (PL44/2004) that are located on the eastern boundary of Botswana on the Limpopo Belt. Ground soil sampling for geochemistry and a VTEM air magnetic helicopter survey commenced in December 2010. BML plans to drill this area after it has established drill targets which is expected to be known in early 2011

Whilst your Board is encouraged with the results of recent exploration and its success and potential in the future, any investment in BML must be considered a speculative investment. Eligible Shareholders should consult with their professional advisors before making any investment decision pursuant to this prospectus.

Yours sincerely,

Pat Volpe Chairman

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3 Details of the Offer

3.1 Offer

By this Prospectus, the Company is making a non-renounceable offer of Securities on the basis that for every three (3) Shares held by Eligible Shareholders at the Record Date, Eligible Shareholders will have the right (but not the obligation) to subscribe for one (1) New Share at an issue price of $0.08 (8 cents) per New Share, plus two (2) free Attaching Options per New Share for nil consideration (“ Rights Issue ”).

The Rights Issue is non-renounceable and Eligible Shareholders may not sell or transfer all or any part of their Entitlement to this Rights Issue on ASX or otherwise.

As at the date of this Prospectus, the Company currently has 106,421,094 Shares on issue and 4,149,998 unlisted Options on issue. Holders of existing Options will not be entitled to participate in the Rights Issue; however they may exercise their existing Options prior to the Record Date if they wish to participate in the Rights Issue. Assuming none of these existing Options are exercised prior to the Record Date, the number of New Shares offered under this Prospectus will be 35,473,698 and the number of Attaching Options will be 70,947,396.

Eligible Shareholders may accept their Entitlement in whole or in part, or may decide not to accept their Entitlement at all. Shareholders who do not accept their Entitlement in full will, as a result of the Rights Issue, have their percentage shareholding in the Company diluted.

Eligible Shareholders wishing to take up all or part of their Entitlement under the Rights Issue can only do so by completing the Entitlement and Acceptance Form which accompanies this Prospectus.

3.2 Opening and Closing Dates of the Offer

The Opening Date of the Offer will be 25 January 2011 at 9.00am AEST and the Closing Date will be 9 February 2011 at 5.00pm AEST. The Directors reserve the right to close the Offer early or extend the Closing Date (as the case may be), should it be considered by them necessary to do so. Entitlement and Acceptance Forms received after the Closing Date will be rejected and Application Moneys will be returned without interest.

3.3 Entitlements and Acceptance

The Entitlement and Acceptance Form accompanying this Prospectus shows your Entitlement to New Shares for which you may apply and the total amount you would have to pay should you choose to take up all your Rights. Your Entitlement to New Shares is based on the number of Shares registered in your name on the Record Date. If you have fractions of entitlements then they will be rounded down to the next whole number in determining your share entitlements.

The Company will also issue you with two (2) Attaching Options for every one (1) New Share issued to you under the Offer for nil consideration.

You may subscribe for all or part of your Entitlement to New Shares prior to the Closing Date. You can only accept this Offer by completing the Entitlement and Acceptance Form. There is no minimum subscription level.

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A completed and lodged Entitlement and Acceptance Form, together with a cheque for the Application Moneys or a BPAY® payment, constitutes a binding and irrevocable contract to buy the number of New Shares specified in the Entitlement and Acceptance Form or indicated by the amount of the BPAY® payment.

Completed Entitlement and Acceptance Forms together with the appropriate Application Moneys must reach the Company’s share registry at the following address on or before the Closing Date:

Advanced Share Registry Services Limited

P.O. Box 1156

NEDLANDS WA 6909

or

Unit 2, 150 Stirling Highway NEDLANDS WA 6009

Telephone (08) 9389 8033

Facsimile (08) 9389 7871

Payments by cheque must be made to “Botswana Metals Rights Issue Account” and crossed “not negotiable”.

All payments must be made in Australian dollars.

If you decide not to accept your Entitlement, you need not do anything, however, your percentage shareholding in the Company will be diluted.

3.4 Allotment of the New Shares

Allotment of the New Shares and Attaching Options will take place as soon as practicable after the Closing Date. The Company will determine the allottee(s) of the New Shares and Attaching Options and reserves the right to reject any application.

Until allotment and issue of the New Shares and Attaching Options, the Application Moneys will be held in trust in a separate bank account opened and maintained for that purpose only. Any interest earned on the Application Moneys will be for the benefit of the Company and will be retained by it irrespective of whether allotment and issue of the New Shares and Attaching Options takes place.

3.5

ASX Listing

The Company will make application to ASX within 7 days following the date of this Prospectus for official quotation of the Securities offered pursuant to this Prospectus. If approval is not granted by ASX within 3 months after the date of this Prospectus, the Company will not allot the Securities and will repay all Application Moneys (where applicable) as soon as practicable, without interest.

A decision by ASX to grant official quotation of the Securities is not to be taken in any way as an indication of ASX’s view as to the merits of the Company, or the Securities.

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3.6 Underwriters

The Rights Issue is fully underwritten by the Underwriters. Further details of the terms of the Underwriting Agreements are set out in section 7.1 of this Prospectus.

To comply with the requirement to fully disclose the Underwriters’ approximate potential voting power in the Company and the effect of the underwriting by the Underwriters, the table below sets out various scenarios to indicate the effect on the Company’s shareholding depending on the Shortfall (if any), assuming no Options are exercised, assuming each Underwriter (or its associated entity) takes up its maximum entitlement under the Rights Issue (as they have indicated they will) and that each Underwriter is paid its underwriting fee (as detailed in section 7.1 of this Prospectus) in cash. The potential maximum voting increase in the shareholding and voting power of the Underwriters is set out in the table below (100% Shortfall) and will only occur if no Eligible Shareholders take up their Entitlement under the Rights Issue, which is highly unlikely.

Event	Securities held by Mr Volpe (direct/indirect)	Voting Power Mr Volpe	Securities held by Mr Cellante (direct/indirect)	Voting Power Mr Cellante	Securities held by Mr Woolrich (direct/indirect)	Voting Power Mr Woolrich
Holding as at the date of this Prospectus	13,531,159 Shares 3,000,000 Options	12.71%	7,239,709 Shares	6.80%	400,000 Shares 1,000,000 Options	0.38%
Entitlement	4,510,386 New Shares 9,020,772 Attaching Options		2,413,236 New Shares 4,826,472 Attaching Options		133,333 New Shares 266,666 Attaching Options
After issue of New Shares assuming 100% Shortfall	44,942,357 Shares 65,822,396 Options	31.67%	10,989,709 Shares 7,500,000 Options	7.74%	712,500 Shares 1,625,000 Options	0.50%
After issue of New Shares assuming 75% Shortfall	41,600,515 Shares 59,138,712 Options	29.32%	12,465,122 Shares 10,450,826 Options	8.78%	767,459 Shares 1,734,918 Options	0.54%
After issue of New Shares assuming 50% Shortfall	33,747,525 Shares 43,432,732 Options	23.78%	11,527,730 Shares 8,576,042 Options	8.12%	689,417 Shares 1,578,834 Options	0.49%
After issue of New Shares assuming 25% Shortfall	25,894,345 Shares 27,726,752 Options	18.25%	10,590,338 Shares 6,701,258 Options	7.46%	611,375 Shares 1,422,750 Options	0.43%

The information in the table above shows the potential effect of the underwriting of the Rights Issue by the Underwriters. However, it is highly unlikely that no Eligible Shareholders will take up their Entitlement under this Prospectus. The underwriting obligation of the Underwriters, and therefore the voting power of the Underwriters, will accordingly reduce by a corresponding amount for the amount of the Entitlements taken up by other Eligible Shareholders.

In the highly unlikely event that Mr Volpe (and his associated entities) did gain control of the Company as a result of underwriting the Rights Issue, Mr Volpe has advised the Company that, other than as disclosed in this Prospectus, he:

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• (a) has no intention of making any significant changes to the business of the Company;

• (b) does not propose to change the management and operations of the Company or to make any change to the employment of any present employee of the Company;

• (c) does not intend to redeploy any fixed assets of the Company;

• (d) does not have any present intention to inject further capital into the Company other than by possibly exercising any Options he holds;

• (e) does not intend to transfer property between the Company and the Underwriter or any person associated with it; and

• (f) has no current intention to change the Company’s existing policies in relation to financial matters or dividends.

Pursuant to exception 13 of section 611 of the Corporations Act, Mr Volpe (and his associated entities), by virtue of the Underwriting Agreement, is able to acquire a relevant interest in the Company of greater than 20% without contravening section 606(1) of the Corporations Act provided the effect of the acquisition of Shares pursuant to the Underwriting Agreement is disclosed in this Prospectus.

3.7 Privacy Act

Shareholders provide personal information to the Company (directly or indirectly to the Company’s share registry). The Company collects, holds and will use that information to service your needs as a Shareholder, facilitate distribution payments and corporate communications to you as a Shareholder and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Company’s share registry.

You can access, correct and update the personal information that we hold about you. Please contact the Company or its share registry if you wish to do so at the relevant contact numbers set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act, the Corporations Act and certain rules such as the ASIC Settlement Rules. You should note that if you do not provide the information required on the application for New Shares, the Company may not be able to accept or process your application.

3.8 Enquiries

Any questions concerning the Offer should be directed to the Company Secretary, Mr. Richard Baker on +61 3 9813 5888.

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4 Purpose and Effect of the Offer

4.1 Purpose of the Offer

The purpose of the Offer is to raise additional capital to fund a continued exploration program of a minimum of 10,000 metres of drilling in 2011, after completion of an airbone magnetic survey program flown by helicopter (VTEM) on the Airstrip, Maibele and Dibete discoveries, as well as other anomalies identified at Shashe River East (PL44/2004) and Shashe River West (PL48/2004) on the Limpopo Belt to the north of the Magogaphate Shear Zone containing new discoveries.

Assuming no existing Options are exercised prior to the Record Date, the issue of New Shares under this Prospectus will raise approximately $2,837,895, before expenses. In addition to the issue of the New Shares, if all Attaching Options are also exercised prior to the Option Expiry Date, the Company will raise approximately $7 million including the amount raised by the issue of New Shares.

The effect of the Offer on the capital structure of the Company is set out below.

Shares

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 Date	141,894,792
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 Date	75,097,394

Note – the Company will only apply for the New Shares and Attaching Options issued pursuant to this Rights Issue to be listed on the Australian Securities Exchange (“ASX”). Listing on the ASX is not being sought for any Options already on issue and those options will not be listed on ASX.

4.2 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.

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In detail the funds will be used to:

Item	$
Drill programs on above mentioned Prospecting Licences Fly VTEM air magnetic on abovementioned Prospecting Licences and interpretation of data IP Surveying Assay Geological consulting services Botswana field crew and general ground operating costs Travel Botswana and Australian corporate and office administration Total	800,000 550,000 225,000 500,000 100,000 425,000 40,000 197,895
	2,837,895

Note: the funds have been budgeted for the above purposes but this may vary should exploration success require targeted and accelerated drilling on any of the anomalies. It is possible that additional funds exceeding the funds at hand after the issue may be required to further accelerate exploration.

4.3 Financial effect

Set out below is the un-audited pro forma statement of financial position of the Company as at 31 December 2010 which presents the audited statement of financial position as at 30 June 2010, as audited by William Buck Audit (VIC) Pty Ltd, and the unaudited statement of financial position which has been adjusted for the impact of the proposed Rights Issue.

	Consolidated Group
Current Assets Cash and cash equivalents Trade and other receivables Total Current Assets Non-Current Assets Plant and equipment Capitalised exploration and evaluation Total Non-Current Assets Total Assets Current Liabilities Trade & Other Payables Total Current Liabilities Non-Current Liabilities Total Non-Current Liabilities Total Liabilities Net Assets Equity Issued Capital Reserves Accumulated Losses Total Equity	Audited 30 June 2010 Unaudited 31 December 2010 Proforma 31 December 2010 $ $ $ 5,305,240 3,107,795 5,945,691 48,296 150,981 150,981
	5,353,536 3,258,776 6,096,672
	166,508 154,369 154,369 4,221,291 5,077,338 5,077,338
	4,387,799 5,231,707 5,231,707
	9,741,335 8,490,483 11,328,379
	237,315 169,351 169,351
	237,315 169,351 169,351
	- - -
	- - -
	237,315 169,351 169,351
	9,504,020 8,321,132 11,159,028
	9,578,802 9,610,598 12,448,494 1,814,030 1,452,515 1,452,515 (1,888,812) (2,741,981) (2,741,981)
	9,504,020 8,321,132 11,159,028

Note: in the event that some or all of Prospecting Licences 111/94, 54/98 and 14/2003 are not extended and BML loses the right to explore those tenements there will be a write-off of Deferred Exploration Expenditure in the financial accounts of the Company.

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5 Rights and Liabilities attaching to New Shares

5.1 Rights attached to New Shares

• New Shares will, once issued, rank pari passu with existing Shares. The rights attached to Shares are:

• (a) set out in the Company’s Constitution which may be examined free of charge by appointment between 9.00am and 5.00pm on normal business days at the registered office of BML at Suite 5.1, Level 5, Pacific Tower, 737 Burwood Road, Hawthorn, Victoria, 3122; and

• (b) in certain circumstances, regulated by the Corporations Act, the ASX Listing Rules and the general law.

Set out below is a summary of the principal rights attaching to Shares:

• (a) General meetings

• Members are entitled to be present in person, or by proxy, attorney or representative to speak and vote at general meetings of the Company. Members may requisition general meetings in accordance with the Corporations Act and the Constitution of the Company.

• (b) Ranking

The New Shares will be ordinary shares and rank equally in all respects with the existing Shares of the Company. Prior to the issue of this Prospectus the Company has issued options to Directors. These options are not listed, nor is quotation being sought for these particular classes of options, however the shares issued on exercise of these options will rank equally with existing Shares.

• (c) Reports and Notices

Members are entitled to receive all notices, reports, accounts and other documents required to be furnished to members under the Constitution of the Company and the Corporations Act.

• (d) Voting rights

At a general meeting of the Company every ordinary member present in person, or by proxy, attorney or representative shall on a show of hands, have one vote and upon a poll every member present in person or by proxy, attorney or representative has one vote for every Share held. A qualification to the above is that where a person is present at a meeting as proxy or representative for more than one member then on a show of hands that person shall have only one vote and not one vote for each person represented by him.

(e) Issue of further Shares

The allotment and issue of Shares is under the control of the Directors of the Company. Subject to restrictions on the allotment of Shares to Directors or their associates contained in the Constitution, the Corporations Act, and the ASX Listing Rules, the Directors may allot or otherwise dispose of Shares on such terms and conditions as they see fit.

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(f) Variation of rights

The rights, privileges and restrictions attaching to Shares can be altered with the approval of a resolution passed at a separate general meeting of the holders of Shares by a three-quarters majority of those holders who, being entitled to do so, vote at that meeting or with the written consent of the holders of at least threequarters of the Shares on issue, within two months of that general meeting.

• (g) Winding up

Members will be entitled in a winding up to share in any surplus assets of the Company in proportion to the Shares held by them respectively, less any amount which remains unpaid on their Shares at the time of distribution.

• (h) Dividends

The Directors may declare and authorise the distribution, from the profits of the Company, of dividends to be distributed to members according to their rights and interests.

• (i) Transfer of Shares

Subject to the Constitution of the Company and the Corporations Act the New Shares will be freely transferable.

• (j) Reduction of Capital The Company may only reduce its capital in such manner as may be permitted by the provisions of the Corporations Act from time to time.

• (k) Borrowing and Lending Powers

• The Company may borrow and lend in such manner as may be permitted by the provisions of the Corporations Act from time to time.

• (l) Directors

The Constitution of the Company contains provisions relating to the rotation of Directors (other than Managing Directors / Executive Directors and Alternate Directors).

5.2 CHESS and BML Sponsorship

BML participates in CHESS. ASTC, a wholly owned subsidiary of ASX, operates CHESS in accordance with the ASX Listing Rules, the ASTC Settlement Rules and the ACH Clearing Rules. Holders of New Shares will not be issued a certificate but will be issued and sent a confirmation of their allotment of their holding of New Shares.

If you are a sponsored holder in CHESS, you will be sent a confirmation notice by the Share Registry which will set out the number of New Shares issued to you under this Prospectus and provide details of your HIN (holder identification number).

If you are registered on the issuer sponsored sub-register, your holding statement will contain the number of New Shares issued to you under this Prospectus and your SRN (security holder reference number).

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A CHESS holding statement or issuer sponsored holding statement will otherwise be sent to Shareholders at the end of any calendar month during which the balance of their shareholding changes. Shareholders may request a statement at any other time; however a charge may be made for additional statements.

5.3 Terms and Conditions of Attaching Options

The Attaching Options will be issued to successful Applicants under the Offer on the basis of 2 Attaching Options for every 1 New Share issued.

Each Attaching Option will expire at 5.00pm EST on 30 June 2013 ( Option Expiry Date ). Each Attaching Option may be exercised at any time prior to the Option Expiry Date in accordance with the notice provisions set out below and any Attaching Options not so exercised shall automatically expire on the Option Expiry Date.

The exercise price for the Attaching Options is $0.10 per Attaching Option.

The following is a summary of the rights and liabilities attaching to all Options and which will attach to the Attaching Options once issued.

• (a) Ranking of Share allotted on Exercise of Option

Each Share allotted as a result of the exercise of an Attaching Option will rank in all respects pari passu with the existing Shares in the Company on issue at the date of allotment.

• (b) Voting

Attaching Options issued by the Company do not have any voting rights at general meetings of the Company.

• (c) Transfer of an Attaching Option

Subject to the Constitution of the Company and the Corporations Act the Attaching Options will be freely transferable.

• (d) Method of Exercise of an Attaching Option

An optionholder may exercise Attaching Options at any time prior to the Option Expiry Date by submitting the relevant Option Exercise Form to the Company’s share registry. Forms for exercising Attaching Options are available from the Company’s share registry, the Company’s website or by contacting the Company directly.

• (e) Participation in New Share Issues

Attaching Options issued by the Company do not entitle the optionholder to participate in new issues by the Company.

• (f) Change of Options’ Exercise Price or the Number of Underlying Shares

In the event of any reconstruction (including a consolidation, subdivision, reduction or return) of the issued capital of the Company, all rights of holders of Attaching Options will be changed to the extent necessary to comply with the Listing Rules at the time of the reorganisation.

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6 Risk Factors

6.1 General

There are a number of factors, both specific to BML and of a general nature, which may affect the future operating and financial performance of BML and the value of an investment in BML.

Some of these factors can be mitigated by the use of safeguards and appropriate commercial action. However, many are outside the control of BML and cannot be mitigated.

This section describes certain risks associated with an investment in BML. Prior to making an investment decision, Eligible Shareholders should carefully consider the following risk factors, as well as the other information contained in this Prospectus.

6.2 Securities Investment

Eligible Shareholders should be aware that there are risks associated with investment in shares of companies listed on a stock exchange. The value of shares can be expected to fluctuate depending on various factors including general worldwide economic conditions, changes in government policies, investor perceptions, movements in interest rates and stock markets, variations in the operating costs and costs of capital replacement which BML may in the future require. Accordingly, assuming that the Securities are granted official quotation by ASX, they may trade on ASX at higher or lower prices than the issue price.

Each Eligible Shareholder should consider whether Securities are a suitable investment for them before deciding to invest in the Securities. Any Eligible Shareholder in doubt about investing in shares should consult their stockbroker, accountant, lawyer or other professional adviser immediately.

6.3 Economic risks

• (a) Economic risk and external market factors

• Factors, such as, but not limited to, political movements, stock market trends, changing customer preferences, interest rates, inflation levels, commodity prices, exchange rates, industrial disruption, environmental impacts, international competition, taxation changes and legislative or regulatory changes, may all have an adverse impact on BML's operating costs, profit margins and share price. These factors are beyond the control of BML and BML cannot, to any degree of certainty, predict how they will impact on BML.

(b) War and terrorist attacks

War or terrorist attacks anywhere in the world could result in a decline in economic conditions worldwide or in a particular region. There could also be a resultant material adverse effect on the business, financial condition and financial performance of BML.

(c) Commodity price risk

As the Company’s potential earnings from any future operations would be largely derived from the sale of commodities in US dollars, the Company’s earnings would be subject to fluctuations in the price of commodities and the Company’s earnings and costs would be

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subject to movements in currency exchange rates (particularly the Australian dollar against the US dollar).

Commodity prices fluctuate and are affected by factors including the relationship between global supply and demand for minerals, forward selling by producers, the cost of production and general global economic conditions.

Commodity prices are also affected by the outlook for inflation, interest rates, currency exchange rates, and supply and demand issues. These factors may have an adverse affect on the Company’s exploration and any subsequent development and production activities, as well as its ability to fund its future activities.

(d) Foreign exchange risk

Revenue and expenditure in overseas jurisdictions are subject to the risk of fluctuations of international currency exchange markets. Foreign taxes, limitation on repatriation of earnings, compliance with foreign accounting and business laws, and cultural differences, carry a certain amount of risk. Fluctuations in exchange rates may adversely affect the Company and its share price. The Company does not at present have any currency hedging in place.

6.4 Specific risks

• (a) Profitability

The Company is not presently profitable and may never be so. The ability of the Company to pay dividends will depend on it generating revenue and the overall financial position of the Company.

• (b) On-going capital requirements for BML

If BML requires access to further funding at any stage in the future, BML may be adversely affected in a material way if, for any reason, access to that capital is not available. There can be no assurance that additional funds will be available. If additional funds should be raised by issuing equity securities, this might result in dilution to the then existing Shareholders.

• (c) Ability to attract personnel

BML’s success depends, in part, on its ability to identify, attract, motivate and retain suitably qualified management personnel. Competition for qualified staff is strong. The inability to access and retain the services of a sufficient number of qualified staff could be disruptive to BML's development efforts or business development and could materially adversely affect its operating results.

(d) Operating risk

The nature of exploration, mining and mineral processing involves hazards which could result in BML incurring uninsured losses and liabilities to third parties. These could include rock falls, flooding, unfavourable ground conditions or seismic activity, ore grades being lower than expected and the physical or metallurgical characteristics of the ore being less amenable to mining or treatment than expected.

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(e) Insurance risk and hazards

The Company, as an active participant in exploration programs, may become subject to liability for hazards that cannot be insured against or against which it may elect not to be insured because of high premium costs. The Company may incur a liability to third parties (in excess of its insurance cover) arising from pollution, environmental damage or other damage, injury or death.

(f) Contract risks

The Company's subsidiaries operate through a series of contractual relationships with operators and sub-contractors. All contracts carry risks associated with the performance by the parties thereto of their obligations as to time and quality of work performed. Any disruption to services or supply may have an adverse effect on the financial performance of the Company’s operations.

(g) Environmental risks

The Company’s projects are subject to various environmental laws. Many of the activities and operations of the Company cannot be carried out without prior approval from and compliance with all relevant authorities. Resource activities can be environmentally sensitive and give rise to substantial costs for environmental rehabilitation, damage control and losses.

The Company may be:

• (i) subject to potential liability related to the mining and extraction of metals; or

• (ii) prevented from mining due to the environmental impact of its activities on an area.

Any such developments might impact adversely on the Company’s share price.

It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

(h) Title risks and Native Title

Interests in tenements in Botswana are governed by legislation and are evidenced by the granting of Prospecting Licences (PL’s). Each PL is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to its interest in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure commitments.

It is also possible that, in relation to tenements which the Company has an interest in or will in the future acquire such an interest, there may be areas over which legitimate native title rights exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations, may be adversely affected. The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

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(i) Expiry of tenements

Several of BML’s Prospecting Licences have or will expire in the near future. In which case they will be lost unless a new discovery has been made in accordance with the Mines and Minerals Act (Act No. 17 of 1999) of Botswana (“Mines and Minerals Act”). The Company can apply to the Minister of Mines for an extension that may or may not be granted as determined by the Minister, in his discretion, in accordance with Section 17 of the Mines and Minerals Act.

Potential investors should be aware that Prospecting Licences PL111/94, PL54/98 and PL14/2003 in North Eastern Botswana may not be extended by the Botswana authorities, in which case the consequences are that BML will have no further right to conduct any exploration on these tenements and all funds previously invested in exploration activities on these tenements will be lost and subsequently any deferred exploration expenditure capitalised in the consolidated accounts of BML will be written off, thereby impacting the consolidated statement of financial position of BML. These Prospecting Licenses expired on 30 September 2010. Furthermore, Prospecting Licences PL44/2004 (Shashe River East) and PL48/2004 (Shashe River West) both expire on 30 June 2011. There can be no guarantee that the Botswana authorities will grant BML an extension over these tenements, in which case the consequences will be similar to those outlined above.

(j) New Resources Tax

On 2 May 2010, the Commonwealth Government announced a proposal to introduce legislation to establish a resources superprofit tax. It was announced that the proposed new tax will become operational from 1 July 2012 and apply to all mining and petroleum projects.

Full details of the new tax have not been confirmed and in those circumstances, the Company is not in a position to assess the impact, if any, of such tax on the Company going forward.

(k) Regulatory risk

Operations by the Company may require approvals from regulatory authorities which may not be forthcoming or which may not be able to be obtained on terms acceptable to the Company. While the Company has no reason to believe that all requisite approvals will not be forthcoming and whilst the Company's obligations for expenditure will be predicated on any requisite approvals being obtained Applicants should be aware that the Company cannot guarantee that any requisite approvals will be obtained. A failure to obtain any approvals would mean that the ability of the Company to develop or operate any project, or possibly acquire any project, may be limited or restricted either in part or absolutely.

The regulatory environment for BML's operations could change in ways that could substantially increase BML’s liabilities, tax liability or costs of compliance. This could materially and adversely affect BML's financial position.

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(l) Equipment risk

The operations of BML could be adversely affected if essential equipment failed.

(m) Sovereign risk

The Company's exploration activities are carried out in Botswana. As a result, the Company will be subject to political, social, economic and other uncertainties including, but not limited to, changes in policies or the personnel administering them, foreign exchange restrictions, changes of law affecting foreign ownership, currency fluctuations, royalties and tax increases in that country. Other potential issues contributing to uncertainty such as repatriation of income, exploration licensing, environmental protection and government control over mineral properties should also be considered.

Potential risk to the Company’s activities may occur if there are changes to the political, legal and fiscal systems which might affect the ownership and operation of the Company’s interests in Botswana. This may also include changes in exchange control systems, expropriation of mining rights, changes in government and in legislative and regulatory regimes.

(n) Joint Ventures

The Company may wish to develop its projects or its future projects through joint venture arrangements. Any joint ventures entered into by, or interests in joint ventures assigned to, the Company could be affected by the failure or default of any of the joint venture participants.

Should the Company achieve less than the full subscription under the offer it may have to obtain joint venture partners to meet expenditure commitments specified by the Botswana regulatory authorities when the tenements were granted. There is a risk that the Company may not readily be able to obtain such joint venture partners prior to the expiry date of the tenements. Should an expenditure commitment not be met for a tenement the Botswana regulatory authorities have the discretion to cancel that tenement.

BML is presently in negotiations with its joint venture partner IAM Gold Corporation Limited to finalise the Jim’s Luck Joint Venture between the parties. BML is looking to continue exploration at the Jim’s Luck prospect in its own right. It is not proposed to spend any of the funds from this Rights Issue on exploration at Jim’s Luck.

(o) Litigation

Neither the Company nor any of its subsidiaries are presently involved in litigation and the Directors are not aware of any basis on which any litigation against the Company or any of its subsidiaries may arise.

(p) Climatic risk

Adverse weather conditions may affect production and exploration.

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• (q) Discovery risk

Any discovery may not be commercially viable or recoverable: that is no resources within the meaning of the JORC Code may be able to be established and it may be that consequently no reserves can be established.

6.5 Mining tenements

There is a risk that BML may lose title to mining tenements if conditions to which the tenements are subject are not complied with, including expenditure requirements. Mining tenements may be forfeited or have conditions imposed upon them for failure to meet government requirements or for breaches of tenement conditions. There are minimum expenditure requirements, periodic relinquishment requirements and lease and licence conditions. BML may decide to surrender or relinquish areas of tenements as priorities change or to meet budgetary requirements.

6.6 Resource and Reserve estimates

There is a risk that the mineral resources and ore reserves of BML, which are estimated and published on a regular basis by BML in accordance with ASX Listing Rules and the Australasian Code for Reporting of Mineral Resources and Ore Reserves, are incorrect. If those estimates are materially in excess of the recoverable mineral content of the tenements, the production and financial performance of BML would be adversely affected.

6.7 Speculative Nature of Investment

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of it Securities.

Therefore, the Securities carry no guarantee with respect to the payment of dividends, returns of capital or their market value. Eligible Shareholders should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to invest.

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7 Additional Information

7.1 Underwriting Agreements

Pursuant to Underwriting Agreements dated 21 December 2010, 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 ) have each agreed to underwrite the Rights Issue. The Underwriters’ respective several underwriting commitments are as follows:

Underwriter	Dollar Amount Underwritten	No. of Securities Underwritten	Percentage of total amount Underwritten
Trayburn Pty Ltd	$2,512,896	31,411,198 New Shares 62,822,396Attaching Options	88.55%
Bell IXL Investments Limited	$300,000	3,750,000 New Shares 7,500,000 Attaching Options	10.57%
Anne Woolrich	$25,000	312,500 New Shares 625,000 Attaching Options	0.88%

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. The Underwriters’ respective underwriting fee paid in cash or in Securities is as follows (assuming no existing Options on issue are exercised prior to the Record Date):

Underwriter	Underwriting Fee if paid in cash	Underwriting Fee if satisfied by issue of Securities
Trayburn Pty Ltd	$125,645	1,570,559 New Shares 3,141,118 Attaching Options
Bell IXL Investments Limited	$15,000	187,500 New Shares 375,000 Attaching Options
Anne Woolrich	$1,250	15,625 New Shares 31,250Attaching Options

The obligations of the Underwriters’ to underwrite the Offer pursuant to the Underwriting Agreements are only conditional on BML issuing this Prospectus, and on the events specified in a schedule to each Underwriting Agreement. These events include (without limitation):

• (a) ( ASX Indices fall ) The S&P ASX All Ordinaries Index is, at the close of business on any three consecutive business days from the date of this agreement until the date the Company issues the underwritten securities, at a level which is the lesser of 90% of the level of the index at the close of trading on the date of this agreement and 4,700 points.

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• (b) ( Prospectus ) Without limitation:

• (i) there is a material omission from the prospectus;

• (ii) the prospectus contains a misleading or deceptive statement;

• (iii) a statement in the prospectus becomes misleading or deceptive;

• (iv) a forecast in the prospectus becomes incapable of being met or unlikely to be met in the projected time;

• (v) the prospectus does not comply with the Corporations Act , the Listing Rules or any other applicable laws or regulations; or

• (vi) a matter referred to in section 719 of the Corporations Act occurs in respect of the prospectus.

• (c) ( Withdrawal ) The Company withdraws the prospectus or the offer, without the prior written approval of the underwriter.

• (d) ( Default ) The Company is in default of any of the terms and conditions of the underwriting agreement or breaches any warranty or covenant given or made by it under the underwriting agreement and that default or breach is either incapable of remedy or is not remedied within five business days after it occurs.

• (e) ( Hostilities ) There is an outbreak of hostilities (whether or not war has been declared) not presently existing, or a major escalation in existing hostilities occurs, or a major act of terrorism occurs, involving any one or more of the following:

• (i) Australia;

• (ii) the United States of America;

• (iii) Botswana;

• (iv) the United Kingdom;

• (v) Japan;

• (vi) Zimbabwe;

• (vii) South Africa; or

• (viii) any member country of the Organisation of Petroleum Exporting Countries,

or any diplomatic, military, commercial or political establishment of any of those countries anywhere else in the world.

• (f) ( Financial Position ) A materially adverse change, or development involving a prospective materially adverse change, occurs in the financial or trading position of the Company or a related body corporate.

• (g) ( Insolvency Event ) An insolvency event occurs with respect to the Company or a related body corporate.

• (h) ( Listing Rules ) The Company commits a material breach of the Listing Rules.

Each Underwriter reserves the right to appoint sub-underwriters to the Offer on such terms and conditions as they think fit.

7.2 Directors’ interests and benefits

Other than as set out below or elsewhere in this Prospectus, no Director or proposed Director of BML, and no firm in which a Director or proposed Director of BML is a partner, holds, or held at any time during the last 2 years before the date of this Prospectus, any interest in:

• (a) the formation or promotion of BML;

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• (b) any property acquired or proposed to be acquired by BML in connection with its formation or promotion or in connection with the Offer, or

• (c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any Director or proposed director of BML:

• (a) to induce them to become, or to qualify them as, a Director; or

• (b) for services rendered by them in connection with the formation or promotion of BML or in connection with the Offer.

Directors are not required under BML’s constitution to hold any shares in BML.

The table below shows the interest of each Director (whether held directly or indirectly) in securities of BML as at the date of this Prospectus:

Director	Shares	Options
Patrick Volpe	13,531,159	3,000,000
Massimo Cellante	7,239,709	-
Paul Woolrich	400,000	1,000,000

Directors may hold the relevant interests in Shares and Options shown above directly, or through holdings by companies, trusts or other persons with whom they are associated.

7.3 Interests of other persons

Other than as set out below or elsewhere in this Prospectus, no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus, and no promoter of BML holds, or held at any time during the last 2 years before the date of this Prospectus, any interest in:

• (a) the formation or promotion of BML;

• (b) any property acquired or proposed to be acquired by BML in connection with its formation or promotion or in connection with the Offer; or

• (c) the Offer,

and no amounts have been paid or agreed to be paid and no benefit has been given or agreed to be given to any of these persons for services rendered by them in connection with the formation or promotion of BML or in connection with the Offer.

7.4 Consents

Each of the parties referred to in this section:

• (a) has not authorised or caused the issue of this Prospectus;

• (b) does not make, or purport to make, any statement in this Prospectus other than as specified in this section;

• (c) has not made any statement on which a statement in this Prospectus is based, other than as specified in this section; and

• (d) to the maximum extent permitted by law, expressly disclaims all liability in respect of, makes no representation regarding, and takes no responsibility for, any part of this Prospectus other than the reference to its name and the statement (if any) included in this Prospectus with the consent of that party as specified in this section.

Mills Oakley Lawyers have given and, at the time of lodgement of this Prospectus, have not withdrawn their written consent to being named in this Prospectus as legal advisers to BML in respect of the Offer in the form and context in which they are named.

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William Buck Audit (Vic) Pty Ltd have given and, at the time of lodgement of this Prospectus, have not withdrawn their written consent to being named in this Prospectus as auditors to BML in respect of the Offer in the form and context in which they are named.

7.5 Market Price of Shares

The Company is a disclosing entity for the purposes of the Corporations Act and its Shares are enhanced disclosure securities quoted on ASX.

The highest and lowest market sale prices of the Company’s Shares on ASX during the 3 months immediately preceding the date of lodgement of this Prospectus with the ASIC and the respective dates of those sales were:

Highest: 19 cents per Share 5 November 2010 Lowest: 8.2 cents per Share 18 October 2010.

The latest available closing sale price of the Company’s Shares on ASX prior to the lodgement of this Prospectus with the ASIC was 13.5 cents on 12 January 2011.

7.6 Expenses of the Rights Issue

The estimated costs of the Offer are:

ASIC fees	$2,068
ASX fees	$8,700
Legal	$15,000
Printing and postage	$10,000
TOTAL	$35,768

These expenses are payable by the Company.

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8 Continuous Disclosure Obligations

8.1 Nature of this Prospectus

This Prospectus is issued under the special prospectus content rules for continuously quoted securities in section 713 of the Corporations Act. This enables listed disclosing entities to issue a prospectus with less rigorous disclosure requirements if:

• (a) the securities offered by the prospectus are in a class of securities that have been quoted securities at all times in the 3 months before the date of the prospectus; and

• (b) the company is not subject to certain exemptions or declarations prescribed by the Corporations Act.

Securities are quoted securities if:

• (a) the company is included in the official list of ASX; and

• (b) the ASX Listing Rules apply to those securities.

The information in this Prospectus principally concerns the terms and conditions of the Offer and the information necessary to make an informed assessment of:

• (a) the effect of the Offer on BML; and

• (b) the rights and liabilities attaching to the New Shares offered by this Prospectus.

As BML has been listed on ASX since 18 January 2008, a substantial amount of information concerning BML has previously been notified to ASX and is therefore publicly available.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to BML which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Eligible Shareholders should therefore also have regard to the other publicly available information in relation to BML before making a decision whether or not to invest in the New Shares. Information can be accessed from ASX or via BML’s website at www.botswanametals.com.au.

8.2 Regular reporting and disclosure obligations

BML is a disclosing entity under the Corporations Act. It is subject to regular reporting and disclosure obligations under the Corporations Act and the ASX Listing Rules.

These obligations require BML to notify ASX of information about specified events and matters as they arise for the purposes of ASX making that information available to the stock market conducted by ASX. In particular, BML has an obligation under the ASX Listing Rules (subject to certain limited exceptions) to notify ASX immediately of any information of which it becomes aware concerning BML which a reasonable person would expect to have a material effect on the price or value of securities in BML.

BML is also required to prepare and lodge with ASIC both yearly and half yearly financial statements accompanied by a Directors’ statement and report and an auditor’s report.

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All announcements made by BML are available from ASX.

Having taken such precautions and having made such enquiries as are reasonable, BML believes that it has complied with the general and specific requirements of the ASX (as applicable from time to time throughout the 12 months before the issue of this Prospectus) which require BML to notify ASX of information about specified events or matters as they arise, for the purpose of the ASX making that information available to the market.

BML believes there is no other information that Shareholders or investors would reasonably require for the purposes of making an informed assessment of the assets and liabilities, financial position and performance, profits and losses and prospects of BML and the rights and obligations attaching to the New Shares under this Prospectus, which has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules.

8.3 Your right to obtain copies of BML’s documents

Copies of any documents in relation to BML which are lodged with ASIC may be obtained from, or inspected at, an ASIC office.

During the period that the Offer remains open, BML will provide copies of the following to any person on request, free of charge:

• (a) BML’s annual financial report for the year ended 30 June 2010 being the last annual financial report that has been lodged with ASIC before lodgement of this Prospectus;

• (b) BML’s financial report for the half-year ended 31 December 2010 lodged with ASIC after the lodgement of the annual report referred to in paragraph (a) and before the date of lodgement of this Prospectus; and

• (c) any continuous disclosure notices used to notify ASX of information relating to BML between 28 September 2010 (being the date of lodgement of the financial report referred to in paragraph (a) with ASIC) and the date of lodgement of this Prospectus.

The following documents were lodged by BML with ASX during this period:

Title of Notice as lodged with ASX	Lodgement Date
Dibete Discovery: Final results on drill hole DBRC014	10 January 2011
Securities TradingPolicy	29 December 2010
Further Supergene Cu and Ag Intersections at Dibete	13 December 2010
Non-Renounceable Rights Issue	13 December 2010
Details of Extension to ProspectingLicence	13 December 2010
Request for TradingHalt	10 December 2010
TradingHalt	10 December 2010
Correction to earlier announcement	3 December 2010
Approval of extension to ProspectingLicence	3 December 2010
Final Director’s Interest Notice	30 November 2010
Appendix 3B	30 November 2010

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Title of Notice as lodged with ASX	Lodgement Date
Results of Meeting	30 November 2010
Director Resignation	30 November 2010
Change of Director’s Interest Notice	30 November 2010
DrillingProgress and 2010 AGM Presentation	30 November 2010
Dibete Flat Lying Supergene CU and Ag Zone of Mineralisation	12 November 2010
More exceptional high grade Cu and Ag results at Airstrip	5 November 2010
TradingHalt	4 November 2010
More Copper-Silver mineralisation located at Airstrip Copper	29 October 2010
TradingHalt	29 October 2010
Dibete Discovery	28 October 2010
Notice of Annual General Meeting	27 October 2010
TradingHalt	26 October 2010
Annual Report to Shareholders	28 September 2010

8.4 Documents available for inspection

The following documents are available for inspection during normal business hours at the registered office of BML:

• (a) this Prospectus;

• (b) the constitution of BML; and

• (c) the consent referred to in section 7.3 of this Prospectus.

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9 Director’s authorisation

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive and that, in respect to any other statements made in this Prospectus by persons other than Directors, the Directors have made reasonable enquiries and, on that basis, have reasonable grounds to believe that persons making the statement or statements were competent to make such statements. Those persons have given their consent to the statements being included in this Prospectus, in the form and context in which they are included and have not withdrawn that consent before lodgement of this Prospectus with the ASIC or, to the Directors’ knowledge, before any issue of Shares pursuant to this Prospectus.

Each of the Directors of the Company has consented to the lodgement of this Prospectus in accordance with section 720 of the Corporations Act and has not withdrawn that consent.

This Prospectus is signed for and on behalf of the Company pursuant to a resolution of the Board.

Dated: 13 January 2011

==> picture [78 x 54] intentionally omitted <==

Patrick Volpe Director

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10 Glossary

ACH Clearing Rules

AEST

Applicant

Application

Application Moneys

ASTC

ASTC Settlement Rules

ASX

ASX Listing Rules Attaching Options

BML or Company Board or Board of Directors Business Day

CHESS

Closing Date

Corporations Act

Directors

Eligible Shareholders

Electronic Prospectus

Entitlement or Right

Entitlement and Acceptance Form

New Shares

The official clearing rules of the Australian Clearing House Pty Ltd ABN 48 001 314 503.

Australian Eastern Standard Time.

An Eligible Shareholder who applies for New Shares.

An application for New Shares.

Money received by the Company in respect of Applications.

ASX Settlement and Transfer Corporation Pty Ltd ABN 49 008 504 532.

The official settlement rules of ASTC.

ASX Limited ABN 98 008 624 691.

The official listing rules of the ASX.

The Options offered in this Prospectus to be issued free to successful Applicants under the Offer on the basis of 2 free Attaching Options for every 1 New Shares issued, the terms of which are set out in Section 5.

Botswana Metals Limited ABN 96 122 995 073

The board of directors of the Company.

A day (other than a Saturday, Sunday or public holiday) on which banks are open for general banking business in Melbourne, Australia.

Clearing House Electronic Subregister System operated by ASTC

5.00pm AEST on 9 February 2011.

Corporations Act 2001 (Cth).

The directors of the Company.

A Shareholder whose registered address is in Australia or New Zealand and who is a Shareholder at 5.00 pm (AEST) on the Record Date

The electronic copy of this Prospectus located at BML’s website at www.botswanametals.com.au. Entitlement of Eligible Shareholders to subscribe for 1 New Share for every 3 Shares held by them as at the Record Date plus 2 Attaching Options, and Rights has a corresponding meaning.

The personalised entitlement and acceptance form accompanying this Prospectus,

The Shares to be issued in the Company under this Prospectus.

Offer

Opening Date

Option

Option Expiry Date

Privacy Act Prospecting Licence

Prospectus

Record Date Rights Issue

Securities

Shareholders

Share Registry Shares

Shortfall

Underwriters

Underwriting Agreement

The offer of New Shares and free Attaching Options pursuant to this Prospectus.

9.00am AEST on 25 January 2011.

An option to acquire a Share.

Has the meaning given to that term in Section 5.3 of this Prospectus.

Privacy Act 1988 (Cth).

A licence to prospect as granted by the Department of Geological Survey in Botswana.

This prospectus of BML.

5.00pm on 21 January 2011.

Has the meaning given to that term on the cover page of this Prospectus.

The New Shares and the Attaching Options.

Registered holders of Shares.

Advanced Share Registry Services Limited.

Fully paid ordinary shares in the capital of BML.

The difference between the total number of Securities offered to Eligible Shareholders under the Offer and the number of Securities applied for on a pro rata basis in exercising the Entitlements.

Has the meaning given to that term in section 7.1 of this Prospectus.

Each Underwriting Agreement dated 21 December 2010 entered between the Company and each of the parties associated with Mr. Patrick Volpe, Mr. Massimo Cellante and Mr. Paul Woolrich, all directors of the company and summarised in section 7.1 of this Prospectus

ABN 96 122 995 073

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ENTITLEMENT AND ACCEPTANCE FORM

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCKBROKER OR LICENSED PROFESSIONAL ADVISOR

REGISTERED OFFICE: Suite 5.10, Level 5, Pacific Tower, 737 Burwood Road, Hawthorn, Victoria 3122. SHARE REGISTRY: Advanced Share Registry Ltd, Unit 2, 150 Stirling Highway, Nedlands, Western Australia 6009.

A non-renounceable pro-rata entitlements issue of up to 35,473,698 (assuming no existing Options are exercised before the Record Date) New Shares at an issue price of 8 cents per New Share on the basis of 1 New Share for every 3 Shares held at the Record Date to raise up to approximately $2.83 million ( Rights Issue ) before expenses.

RENOUNCEABLE ENTITLEMENTS ISSUE, CLOSING 5.00 PM AUSTRALIAN

EASTERN STANDARD TIME ON WEDNEDSAY, 9 FEBRUARY 2011.

Shareholder’s details

Sub-Register	:
HIN/SRN	:
Shareholding at Record Date 5.00pm AEST 21 January2011	:
Entitlement to Shares on 1 New Share forevery 3 Shares basis	:
Amount payable on acceptance at 8 centsper Share	:

To the Directors BOTSWANA METALS LIMITED

1. I/We the above mentioned, being registered on 21 January 2011 as the holder(s) of ordinary shares in your Company hereby accept the below mentioned securities in accordance with the enclosed Offer Document;

2. I/We hereby authorise you to place my/our name(s) on the register of shareholders in respect of the number of Shares allotted to me/us and;

3. I/We agree to be bound by the Constitution of the Company.

NUMBER OF NEW SHARES APPLIED FOR (BEING NOT MORE THAN THE ENTITLEMENT SHOWN ABOVE)	AMOUNT ENCLOSED AT $0.08 (8 CENTS) PER SHARE
	$

METHOD OF ACCEPTANCE

You can apply for Shares and make your payment utilising one of the payment options detailed overleaf, however please indicate which payment option you have chosen by marking the relevant box below.

Cheque/bank draft/money order BPAY PLEASE ENTER Drawer Bank Branch Amount CHEQUE DETAILS THANK YOU Biller Code: 212969 You can pay by BPAY. If you choose to pay by BPAY, you do not need to return this form. Please refer overleaf for details. Ref No:

My/Our contact numbers in the case of enquiry are:

Telephone:(...........).............................................. Email: ..................................................................................................

NOTE: Cheques should be made payable to BOTSWANA METALS RIGHTS ISSUE ACCOUNT , crossed NOT NEGOTIABLE and forwarded to Advanced Share Registry Ltd, Unit 2, 150 Stirling Highway, Nedlands, Western Australia, 6009 to arrive no later than 5.00 pm Australian Eastern Standard Time on Wednesday, 9 February 2011 .

Complete this panel and sign below only if a change of address is to be registered with the Company
New Address:
Signature(s): Date:
Please indicate correct title: Director / Secretary /...........................................................

EXPLANATION OF ENTITLEMENT

1. The front of this form sets out the number of Shares, which you are entitled to accept.

2. Your entitlement may be accepted either in full or in part. There is no minimum acceptance.

3. The price payable on acceptance of each Share is 8 cents.

4. Please complete the Entitlement and Acceptance Form overleaf.

APPLICATION INSTRUCTIONS

Payment Details

You can apply for Shares by utilising the payment options detailed below. There is no requirement to return this Form if you are paying by electronic means.

By making your payment using either BPAY or by cheque, bank draft or money order, you confirm that you agree to all of the terms and conditions of the Botswana Metals Ltd Rights Issue Offer Document as enclosed with this form.

Your cheque, bank draft or money order should be made payable to BOTSWANA METALS RIGHTS ISSUE ACCOUNT in Australian currency and crossed “Not Negotiable”. Your cheque or bank draft must be drawn on an Australian branch of a financial institution. Please ensure you submit the correct amount. Incorrect payments may result in your Application being rejected. Complete cheque details in the boxes provided.

Cheques will be processed on the day of receipt and as such, sufficient cleared funds must be held in your account as cheques returned unpaid may not be re-presented and may result in your Application being rejected. Paperclip (do not staple) your cheque(s) to the Entitlement and Acceptance Form. Cash will not be accepted. A receipt for payment will not be forwarded.

If the amount you pay is insufficient to pay for the number of Shares you apply for, you will be taken to have applied for such lower number of Shares as that amount will pay for, or your application will be rejected.

If the amount you pay is more than the amount payable for your full Entitlement, you will be taken to have applied for the maximum number of Shares you are entitled to apply on this form and any excess above your full Entitlement will be returned as the Rights Issue is fully underwritten.

Contact Details

Enter the name of a contact person and telephone number. These details will only be used in the event that the registry has a query regarding this form.

Lodgement of Application

If you are applying for Shares and your payment is being made by BPAY, you do not need to return this form however you are encouraged to return the form to the registry for reconciliation purposes – in that case you can post the form to the registry or send it by facsimile to (61) (08) 9389 7871. Your payment must be received by no later than 5.00 pm AEST on Wednesday, 9 February 2011. Applicants should be aware that their own financial institution may implement earlier cut off times with regard to electronic payment, and should therefore take this into consideration when making payment. It is the responsibility of the applicant to ensure that funds submitted through BPAY are received by this time.

If you are paying by cheque, bank draft or money order, your Application must be received by Advanced Share Registry Ltd ("ASW") by no later than 5.00 pm AEST on Wednesday, 9 February 2011. You should allow sufficient time for this to occur. Return your Application with cheque, bank draft or money order attached.

Neither Advanced Share Registry Ltd ("ASW") nor the Company accepts any responsibility if you lodge the Application Form at any other address or by any other means.

Privacy Statement

Personal information is collected on this form by ASW, as registrar for securities issuers (“the issuer”), for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to external service companies such as print or mail service providers, or as otherwise required or permitted by law. If you would like details of your personal information held by ASW, or you would like to correct information that is inaccurate, incorrect or out of date, please contact ASW. In accordance with the Corporations Act 2001, you may be sent material (including marketing material) approved by the issuer in addition to general corporate communications. You may elect not to receive marketing material by contacting ASW. You can contact ASW using the details provided on the front of this form.

If you have any enquiries concerning this form or your entitlement, please contact ASW on telephone 618 9389 8033 or fax 618 9389 7871.

CHESS holders must contact their Controlling Participant to notify a change of address.

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Telephone & Internet Banking – BPAY

Call your bank, credit union or building society to make this payment from your cheque or saving account. More info: www.bpay.com.au

By Mail

Botswana Metals Rights Issue Account C/- Advanced Share Registry Ltd PO Box 1156, Nedlands Western Australia 6909

Or

Unit 2, 150 Stirling Hwy Nedlands Western Australia 6009