VERITY RESOURCES LIMITED — Capital/Financing Update 2013

Oct 7, 2013

ABN 96 122 995 073

==> picture [173 x 50] intentionally omitted <==

**ASX

Code:
BML**

TO: COMPANY
ANNOUNCEMENTS
OFFICE ASX
LIMITED DATE: 8[th] OCTOBER
2013

**COMPANY

UPDATE
-­‐
BCL
JOINT
VENTURE**

BCL
INVESTMENTS
LIMITED
(“BCL”)
HAS
ADVISED
THAT
IT
IS
AMENABLE
TO CHANGING
THE
FARM-­‐IN
JOINT
VENTURE
AGREEMENT
ON
PL
110/94,
PL
111/94
& PL
54/98
AS
FOLLOWS:

• THE
  ONLY
  CONDITION
  PRECEDENT
  IS
  THAT
  THE
  DEPARTMENT
  OF
  MINES
  IN BOTSWANA
  (“DOM”)
  EXTENDS
  THE
  ABOVE
  THREE
  PROSPECTING
  LICENCES.

• AS
  A
  RESULT
  THE
  COMPANY
  WILL
  NOT
  BE
  REQUIRED
  TO
  OBTAIN RETENTION
  LICENCES.

• ALL
  OTHER
  TERMS
  AND
  CONDITIONS
  REMAIN
  THE
  SAME
  AND
  BOTH PARTIES ARE WORKING TOWARDS AMENDING THE AGREEMENT ACCORDINGLY.

• BCL
  CAN
  EARN
  40%
  BY
  SPENDING
  $4M
  OVER
  2
  YEARS
  AND
  THEN
  EARN
  70% BY
  FUNDING
  THE
  COMPLETION
  OF
  A
  BANKABLE
  FEASIBILITY
  STUDY.

The
Board
of
Directors
of
Botswana
Metals
Limited
is
pleased
to
announce
that
it
has received
advice
that
BCL
is
amenable
to
changing
the
existing
Farm-­‐In
Joint
Venture Agreement
(“the
Agreement”)
so
that
the
condition
precedent
is
that
the
DOM grants
extensions
to
PL
110/94,
PL
111/94
and
PL
54/98
(“the
PLs”)
in
lieu
of
the previous
condition
which
required
the
Company
to
be
granted
Retention
Licences.

All
other
conditions
of
the
Agreement
remain
the
same
and
are
summarised
below.

Whilst
this
is
a
very
significant
step
forward
for
the
Company,
there
is
still
a
risk
that the
extension
of
the
three
PLs
may
not
be
granted,
or
that
only
one
or
two
of
the three
PLs
may
be
extended
by
the
DOM,
and
the
Company
may
again
find
itself
in
a position
where
it
cannot
meet
the
condition
precedent
under
the
Agreement.

In

Botswana
Metals
Limited REGISTERED
OFFICE Suite
5,
Level
1,
310
Whitehorse
Road,
Balwyn
Vic
Australia
3103 P:
+61
3
9830
7676;
F:
+61
3
9836
3056 Email
info@botswanametals.com.au www.botswanametals.com.au

ABN 96 122 995 073

==> picture [173 x 50] intentionally omitted <==

that
case
the
Agreement
will
come
to
an
end.
If
only
one
or
two
of
the
three
PLs
are extended
then
new
terms
may
need
to
be
negotiated
between
the
parties,
and
there can
be
no
guarantee
that
BCL
would
commit
to
a
new
agreement.

The
Company
applied
to
the
DOM
on
27[th] September
2013
(as
advised
to
ASX
on
30[th] September
2013)
for
the
extension
of
the
PLs
for
a
period
of
24
months.
There
can be
no
guarantee
that
all
or
any
of
the
three
PLs
will
be
extended
and
the
decision whether
or
not
to
extend
the
PLs
is
entirely
at
the
discretion
of
the
DOM.

An extension
may
not
be
granted
or
may
be
granted
for
a
period
less
than
is
sought
by the
Company
or
only
one
or
two
of
the
PLs
may
be
granted
an
extension.

Background

On
14[th] November
2012,
the
Company
announced
to
the
ASX,
that
it
had
entered into
the
Agreement
with
BCL,
a
major
Botswana
mining
and
smelting
company owned
by
the
Botswana
Government
(94%)
and
one
of
the
world’s
largest
nickel-­‐ copper
producers,
Norilsk
Nickel
(6%).

The
BCL
group
operates
a
mine
and
smelting
facility
at
Selebi
Phikwe
in
Botswana, which
is
located
only
55km
from
the
three
PL
areas
covered
under
the
Agreement.

The
Agreement
relates
to
the
PLs
in
Botswana
where
the
Company
has
made
three base
metal
discoveries:
Maibele
North
(nickel,
copper
and
platinum
group elements),
Airstrip
Copper
(copper
and
silver)
and
Dibete
(copper
and
silver).

Under
the
Agreement,
following
an
initial
US$4
million
exploration
and
drilling program
to
earn
40%
of
the
areas
covered
by
the
PLs,
BCL
has
the
option
to
continue to
fund
the
projects
to
the
completion
of
a
Bankable
Feasibility
Study
(“BFS”)
to
earn a
70%
interest.

At
that
point
BCL
will
have
the
off-­‐take
rights
at
commercial
prices,
to
any
ore
mined. It
is
planned
to
truck
ore
to
the
BCL
smelter
operations
for
processing,
55km
to
the southwest
at
Selebi
Phikwe.

The
Agreement
was
subject
to
the
Company
being
granted
Retention
Licences
over the
PLs
by
the
DOM.

BML
lodged
Retention
Licence
applications
with
the
DOM
in September
2012.

For
the
reasons
set
out
in
the
Company’s
announcement
to
the ASX
on
16[th] September
2013
titled
“Company
Update”,
on
27[th] September
2013
(as advised
to
ASX
on
30[th] September
2013)
the
Company
withdrew
the
Retention Licence
applications.

On
30[th] September
2013
the
Company
formally
asked
BCL
to
continue
with
a modified
agreement
under
which
the
condition
precedent
is
that
the
DOM
grants
an extension
to
the
PLs
in
lieu
of
the
grant
of
Retention
Licences.

**Botswana

Metals
Limited**

REGISTERED
OFFICE Suite
5,
Level
1,
310
Whitehorse
Road,
Balwyn
Vic
Australia
3103 P:
+61
3
9830
7676;
F:
+61
3
9836
3056 Email
info@botswanametals.com.au www.botswanametals.com.au

ABN 96 122 995 073

==> picture [173 x 50] intentionally omitted <==

By
letter
dated
7[th] October
2013
BCL
advised
that
it
is
amenable
to
changing
the condition
precedent
in
the
Agreement
in
the
manner
requested
by
the
Company with
all
other
terms
and
conditions
remaining
unchanged.

**Joint

Venture
Risks**

As
noted
above
the
advice
received
from
BCL
represents
a
very
significant
step forward
for
the
Company,
however
further
progress
of
the
joint
venture
is dependent
upon
the
following
occurring:

• The
  DOM
  granting
  an
  extension
  of
  all
  three
  PLs;
  and

• BCL
  and
  the
  Company
  both
  executing
  an
  amended
  Farm-­‐in
  Joint
  Venture Agreement.

There
can
be
no
guarantee
that
these
events
will
occur.

**Pat

Volpe**

Chairman

**Botswana

Metals
Limited**

REGISTERED

OFFICE

Suite
5,
Level
1,
310
Whitehorse
Road,
Balwyn
Vic
Australia
3103 P:
+61
3
9830
7676;
F:
+61
3
9836
3056 Email
info@botswanametals.com.au

www.botswanametals.com.au