ACN 122 995 073

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ASX Code: BML

TO: COMPANY ANNOUNCEMENTS OFFICE ASX LIMITED DATE: 12 FEBRUARY 2016

NON-RENOUNCEABLE RIGHTS ISSUE OFFER DOCUMENT

The Company releases the Offer Document for the 7 for 9 non-renounceable Rights Issue of up to 505,572,770 new fully paid ordinary shares at 0.2 cent ($0.002) per share to raise up to $1,011,145 (before costs) as announced to the ASX on 9 February 2016.

The Record Date for determining shareholders in Australia and New Zealand (“Eligible Shareholders”) entitled to participate in the Rights Issue is 18 February 2016.

The Offer Document and a personalised Entitlement and Acceptance Form will be despatched to all Eligible Shareholders on 23 February 2016.

Pat Volpe Chairman

Botswana Metals Limited

Mailing Address Suite 3, 16 Cotham Road, Kew, Victoria 3101

Registered Office Suite 506, Level 5, 1 Princess Street, Kew, Victoria 3101 P: +61 3 9855 1885; F: +61 3 9855 2885

Email [email protected]

www.botswanametals.com.au

ABN 96 122 995 073

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BOTSWANA METALS LIMITED ABN 96 122 995 073

PRO-RATA NON-RENOUNCEABLE RIGHTS ISSUE OFFER DOCUMENT

7-FOR-9 PRO-RATA NON-RENOUNCEABLE RIGHTS ISSUE OFFER OF NEW FULLY PAID ORDINARY SHARES AT AN ISSUE PRICE OF 0.2 CENT ($0.002) PER SHARE

THIS RIGHTS ISSUE OFFER CLOSES AT 5:00 PM (MELBOURNE TIME) ON 7 MARCH 2016 (UNLESS EXTENDED)

Important Notice

This is an important Offer Document which is accompanied by an Entitlement and Acceptance Form for you to subscribe for new fully paid ordinary shares in Botswana Metals Limited. Please read both documents carefully. If after reading the Offer Document you have any questions about the Offer or the New Shares then you should consult your stockbroker, accountant or other professional adviser.

The Offer made pursuant to this Offer Document is for a rights issue of continuously quoted securities (as defined in the Corporations Act) of the Company. This Offer Document is not a disclosure document for the purposes of Chapter 6D of the Corporations Act and has not been lodged with ASIC. The Company is offering the securities under this Offer Document without disclosure to investors under Chapter 6D of the Corporations Act pursuant to section 708AA of the Corporations Act. Accordingly, the level of disclosure contained in this Offer Document is less than that required under a prospectus and Eligible Shareholders should consider all relevant facts and circumstances, including their knowledge of the Company and disclosures made to ASX, before deciding whether to accept the Offer.

The New Shares offered by this Offer Document should be considered speculative.

Botswana Metals Limited

Suite 3, 16 Cotham Road, Kew, Victoria 3101 P: +61 3 9855 1885; F: +61 3 9855 2885 Email [email protected] www.botswanametals.com.au

ABN 96 122 995 073

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12 February 2016

Dear Shareholder,

As announced to the market on 9 February 2016, the Company is undertaking a pro-rata non-renounceable rights issue on a 7-for-9 basis to raise up to $1,011,145 (before costs) by the issue of up to 505,572,770 new shares at 0.2 cent ($0.002) per share.

The attached Offer Document sets out the terms of the Offer and contains other important information.

The Offer is only extended to those shareholders of the Company with a registered address in Australia or New Zealand.

Shareholders should consult their professional advisor before applying for shares under the attached Offer Document.

Yours sincerely, BOTSWANA METALS LIMITED

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Pat Volpe Chairman

Botswana Metals Limited

Suite 3, 16 Cotham Road, Kew, Victoria 3101 P: +61 3 9855 1885; F: +61 3 9855 2885 Email [email protected] www.botswanametals.com.au

PRO-RATA NON-RENOUNCEABLE RIGHTS ISSUE OFFER DOCUMENT

1. THE OFFER – AT A GLANCE

Renounceable Rights Issue

Issue price per New Share 0.2 cent ($0.002).

Offer of approximately $1,011,145 of New Shares (before Offer costs).

Eligible Shareholders’ Entitlement: 7 New Shares for every 9 Shares held on the Record Date.

Rights to New Shares are non-renounceable and not tradeable.

2. TIMETABLE

TIMETABLE
Event	Date
Announcement of the Offer and lodgement of Appendix 3B with the ASX	9 February 2016
Letter to Option holders	10 February 2016
Lodgement of Offer Document with ASX	12 February 2016
Notice sent to shareholders containing information required by Appendix 3B	15 February 2016
Existing Shares quoted on “ex” basis	16 February 2016
Record Date to determine Entitlements under the Offer (Record Date)	18 February 2016
	5:00 pm (AEST)
Lodgement of section 708AA notice with the ASX	23 February 2016
Offer Document and Entitlement and Acceptance Form despatched to	23 February 2016
Eligible Shareholders (Opening Date)	9:00 am (AEST)
Last day to extend Offer	29 February 2016
Final date and time for receipt of acceptance	7 March 2016
and payment in full (Closing Date)	5:00 pm (AEST)
New Shares quoted on a deferred settlement basis	8 March 2016
Company to notify ASX of under subscriptions	10 March 2016
Despatch of transaction confirmation statements (holding statements)	15 March 2016
(Issue Date)
Deferred settlement trading ends	15 March 2016
Date of quotation of New Shares issued under the Rights Issue	16 March 2016

The Company reserves the right (subject to the Corporations Act, the Listing Rules and other applicable laws) to vary the dates of this Timetable including (without limitation) extending the Closing Date or accepting late Applications, either generally or in particular cases, without notice. As such the date the New Shares are expected to commence trading on ASX may therefore vary.

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3. IMPORTANT INFORMATION

3.1. Contact details

If you have not received a personalised Entitlement and Acceptance Form, or if you have any queries on how to complete the Entitlement and Acceptance Form, please contact the Company on (03) 9855 1885 between 9:00 am and 5:00 pm (AEST) Monday to Friday.

3.2. Offer Document not a prospectus

The Offer Document has been prepared by the Company, and is not a prospectus or disclosure document for the purposes of Chapter 6D of the Corporations Act, and has not been lodged with ASIC.

The Company is offering the securities under this Offer Document without disclosure to investors under Chapter 6D of the Corporations Act, pursuant to section 708AA of the Corporations Act, which allows the Company to offer shares to existing shareholders subject to compliance with the conditions set out in that section.

The Offer Document does not contain all the information that Eligible Shareholders may require to make an informed decision as to whether or not to apply for New Shares. Eligible Shareholders should consider all relevant facts and circumstances, including their knowledge of the Company and disclosures made to ASX, before deciding whether to accept the Offer.

It is important that you read and understand the information regarding the Company which is publicly available, prior to accepting the Offer.

Publicly available information includes:

the Annual Report of the Company and other announcements released to ASX; and
the ‘Cleansing Notice’ that the Company lodged with ASX.

The above information is available via the ASX website at http://www.asx.com.au/ under stock code BML.

Neither ASIC nor ASX has any responsibility for the content of this document.

3.3. Speculative investment

The New Shares offered under this Offer Document should be considered speculative.

3.4. Entitlement and Acceptance Forms

Accompanying this Offer Document is a personalised Entitlement and Acceptance Form that sets out your Entitlement.

There is no minimum application and you may take up your Rights in whole or in part.

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3.5. Opening and Closing of the Offer

Offers under the Rights Issue will open at 9:00 am (Melbourne time) on 23 February 2016 (“Opening Date”) and will close at 5:00 pm (Melbourne time) on 7 March 2016 (“Closing Date”). Subject to the requirements of the Act, the Directors reserve the right to extend the Closing Date without prior warning.

The Company also reserves the right not to proceed with the whole or part of the Offer at any time prior to the Issue Date. In that event, Application Monies will be refunded in full without interest.

3.6. Acceptance of Applications for Shares

If your Entitlement and Acceptance Form is not completed properly, or if the accompanying payment is for the wrong amount, the Directors may elect to treat it as valid or may reject it.

The decision of the Directors as to whether to treat any Application for New Shares as valid or invalid and how to construe, amend or complete it will be final. The Directors may complete any blanks or spaces left in any Entitlement and Acceptance Form from you and, by lodging that form, you appoint the Directors, and each of them, as your joint and several attorneys for such purpose and authorise all such amendments, insertions and alterations.

If the Company elects, in its absolute and unfettered discretion, to treat any such incomplete or incorrectly completed Application, or any Application accompanied by the wrong amount as invalid and to therefore reject the Application, the Application Monies will be refunded without interest.

A completed and lodged Entitlement and Acceptance Form, together with a cheque, bank draft or money order for the Application Money, or the payment of your Application Moneys by Electronic Funds Transfer, constitutes a binding and irrevocable Application for the number of New Shares specified in the Entitlement and Acceptance Form or which could be subscribed for by the Application Moneys paid by you.

3.7. Speculative nature of Offer and projects and relevant risk factors

You should:

have regard to the speculative nature of the Company’s projects and exploration activities and to the risks discussed in section 7 of this Offer Document;
understand that the Company’s proposed activities as referred to herein are speculative and subject to a high level of risk and that the matters referred to in the risk factors could result in diminution of the value of your investment; and
read this Offer Document carefully and in its entirety, with emphasis on the risk factors detailed in section 7, before deciding to invest in the Company.

3.8. Eligible shareholders

A person is eligible to participate in the Offer if at the Record Date:

the person is a registered holder of Shares; and
the person has a registered address in Australia or New Zealand.

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3.9. Ineligible shareholders

The Company has decided that it is unreasonable to make the Offer to any Shareholder with a registered address outside Australia or New Zealand at the Record Date having regard to:

the small number of Shareholders with addresses outside Australia and New Zealand;
the number and value of the Shares they hold; and
the cost to the Company of complying with applicable legal and regulatory requirements outside Australia and New Zealand.

Accordingly the Offer is not being extended to Shareholders with a registered address outside Australia or New Zealand. In accordance with Listing Rule 7.7.1(b) the Company will send each holder to whom it will not offer the Shares, details of the Rights Issue and an advice that the Company will not offer Shares to those holders.

The Entitlements of Ineligible Shareholders will lapse and the relevant New Shares will form part of the Shortfall.

3.10. Nominee sale procedure

No nominee has been approved by ASIC to act as nominee to sell the New Shares that might have otherwise been issued to shareholders outside Australia and New Zealand.

Accordingly, Applicants under the Offer will not be able to rely on the exception allowed by item 10 of section 611 of the Corporations Act which would otherwise permit an Applicant to acquire a voting power of more than 20% in the Company as a result of accepting the Offer without breaching section 606 of the Corporations Act. As a consequence, subsequent to the Closing Date, the Company will not issue and allot New Shares (including Shortfall Shares) to any Applicant or other person if the result of any such allotment would result in any person (and that person’s Associates) acquiring a relevant interest in in excess of 20% of the issued capital of the Company subsequent to the Closing Date. This may result in the Company scaling back Applications from Eligible Shareholders below their Entitlements to ensure that no breach of section 606 of the Corporations Act occurs.

Without limiting the above, it is the responsibility of Eligible Shareholders to ensure that their participation under the Offer does not result in them breaching section 606 of the Corporations Act. Eligible Shareholders, by lodging Applications for New Shares, acknowledge and accept the right and obligation of the Company to not allot or issue New Shares to them which would result in any breach by them of section 606 of the Corporations Act and direct the Company to so act.

3.11. Foreign jurisdictions

The Company has not investigated the regulatory requirements for the issue of securities outside Australia and New Zealand. The distribution of this Offer Document in jurisdictions other than Australia and New Zealand may be restricted by law and any failure to comply with such restrictions might constitute a violation of applicable securities laws.

This Offer Document and the accompanying Entitlement and Acceptance Form, and any document that is related to any of them do not, and are not intended to, constitute an offer of Shares in any jurisdiction which, or to any person to whom, it would not be lawful to make such an offer. No action has been taken to register the New Shares or otherwise permit a public offering of those shares in those jurisdictions.

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Lodgement of the Entitlement and Acceptance Form or payment by Electronic Funds Transfer constitutes a representation to the Company by the Applicant that there has been no breach of any such law. To the extent that a Shareholder holds Shares on behalf of another person resident outside Australia or New Zealand, it is the responsibility of the Shareholder to ensure that any acceptance complies with all applicable foreign laws. Eligible Shareholders who are nominees, trustees or custodians should seek independent advice as to how to proceed.

The distribution of the Offer Document or the accompanying Entitlement and Acceptance Form outside Australia and New Zealand may be restricted by law. In particular, the documents must not be taken into or distributed or released in the United States of America. Any person who comes into possession of the Offer Document or the Entitlement and Acceptance Form should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws and the Company disclaims any liability in relation to any such violation.

The New Shares offered to residents of New Zealand under this Offer Document are offered in reliance on the Securities Act (Overseas Companies) Exemption Notice 2013 (New Zealand). This Offer Document and the accompanying Entitlement and Acceptance Form have not been registered, filed or approved by any New Zealand regulatory authority under the Securities Act 1978 (New Zealand). This Offer Document is not an investment statement or prospectus under New Zealand law.

4. OFFER

4.1. Background

On 9 February 2016 the Company announced its intention to undertake a non-renounceable rights issue to raise up to $1,011,145 before costs by the issue of up to 505,572,770 Shares at an issue price of 0.2 cent ($0.002) each.

4.2. General Structure

The Offer is a 7 for 9 pro-rata non-renounceable rights issue at 0.2 cent ($0.002) per New Share to raise up to $1,011,145 (before the costs of the Offer). The Offer is open to Eligible Shareholders being those Shareholders who have a registered address in Australia or New Zealand on the Record Date. Fractional entitlements will be rounded up to the nearest whole New Share.

The table below summarises the capital structure of the Company before and after the Offer on the assumption the Offer is fully subscribed. At this stage, and as the Offer is only partially underwritten, it is not possible to determine what the actual capital of the Company will be if the rights issue is not fully subscribed or if the Shortfall (if any) is unable to be placed.

	No. Shares
Shares on issue at date of Offer Document	650,022,133
Maximum number of New Shares to be issued pursuant to the Offer	505,572,770
TOTAL SHARES ON ISSUE AFTER THE OFFER *	1,155,594,903

Assuming subscription in full.

The Company has previously issued a total of 410,233,933 options to acquire fully paid ordinary shares exercisable at 1.5 cents ($0.015) per option with an expiry date of 31 December 2016.

Subject to the absolute and unfettered right of the Company to extend the Closing Date (subject to compliance with ASX Listing Rules) the Offer will open on the Opening Date and close on the Closing Date.

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4.3. Offer Price

The price payable for each New Share is 0.2 cents ($0.002) cash per New Share payable in full on application.

Eligible Shareholders will not be required to pay brokerage or other fees in respect of any New Shares acquired under the Offer.

Eligible Shareholders should note that the market price of Shares may rise and fall between the date of this Offer Document and the date on which the New Shares are allotted. Accordingly, the price paid for each New Share under the Offer may be higher or lower than the market price of Shares at the time of this Offer or at the time the New Shares are allotted under the Offer.

The market price of the Shares can be obtained at http://www.asx.com.au/ by searching under stock code BML.

4.4. Non-Renounceable

The Offer is non-renounceable which means that the Entitlement to New Shares under the Offer cannot be sold, traded or transferred.

Entitlements not taken up will lapse.

4.5. Minimum Subscription

The Rights Issue is subject to a minimum subscription of $300,000. In the event that the Company does not succeed in raising $300,000 from:

(a) Applicants under the Offer;
(b) the placement of any Shortfall; and
(c) the issue of New Shares to the Underwriters,

within the period allowed by the ASX Listing Rules then the Company will not issue any New Shares and all monies subscribed by Applicants will be refunded in full without interest.

The Company will hold all Application Moneys received on trust until such time that the minimum subscription is reached and the New Shares are issued.

4.6. Underwriting – Trayburn

Trayburn has agreed to partially underwrite the Rights Issue up to a maximum of 151,135,489 New Shares for a total underwritten value of $302,270.98. The underwriting is strictly on the basis that the number of New Shares to be allocated to Trayburn will be scaled back so that the voting power of Trayburn and its Associates in the Company does not exceed 20% after the issue of shares to Applicants, the placement of any Shortfall and the issue of the New Shares to the Underwriters.

Mr Patrick John Volpe, the Chairman and a substantial shareholder of the Company, is a director and substantial shareholder of Trayburn.

Trayburn will be paid a fee of 5% (plus GST) of the amount underwritten.

The Underwriting Agreement entered into by the Company and Trayburn is on normal commercial terms and conditions and gives Trayburn the right to withdraw in certain specified circumstances.

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The potential impact of the Underwriting Agreement on the voting power of Trayburn and its Associates is discussed in section 6.4 of this document.

4.7. Underwriting - Monvale

Monvale as trustee for The Omissam Trust has agreed to underwrite the Rights Issue up to a maximum of 25,000,000 New Shares for a total underwritten value of $50,000.00. The underwriting is strictly on the basis that the number of shares to be allocated to Monvale will be scaled back so that the voting power of Monvale and its Associates in the Company does not exceed 20% after the issue of shares to Applicants, the placement of any Shortfall and the issue of the New Shares to the Underwriters.

Mr Massimo Livio Cellante, a Director and shareholder of the Company, is a Director of Monvale and a beneficiary of The Omissam Trust.

Monvale will be paid a fee of 5% (plus GST) of the amount underwritten.

The Underwriting Agreement entered into by the Company and Monvale is on normal commercial terms and conditions and gives Monvale the right to withdraw in certain specified circumstances.

The potential impact of the Underwriting Agreement on the voting power of Monvale and its Associates is discussed in section 6.4 of this document.

4.8. Shortfall Facility

The maximum number of New Shares that an Eligible Shareholder may apply for under the offer is the Shareholder’s full Entitlement.

Eligible Shareholders cannot apply for additional New Shares in excess of their Entitlement.

4.9. Placement of Shortfall

In the event that a Shortfall remains after the close of the Offer, the Directors have given Foxfire the right to place the Shortfall Shares at its absolute and unfettered discretion with persons interested in subscribing for New Shares. Any placement of Shortfall Shares shall be made by Foxfire to sophisticated, professional or exempt investors under section 708 of the Corporations Act. Any such placement shall be made subject to the Corporations Act and the Listing Rules and will be completed within three months of the close of the Offer.

The Company has directed Foxfire to place the Shortfall Shares to a spread of investors where possible. Foxfire must ensure that no applicant for Shortfall Shares is permitted to acquire those shares if the acquisition would result in that person having a voting power in the Company in excess of 20% (after the placement of the Shortfall Shares).

No related party of the Company (including Directors and their Associates) will participate in the placement of any Shortfall Shares.

Foxfire holds an Australian Financial Services Licence and has been appointed to place the Shortfall Shares on a best endeavours basis. Foxfire will be paid commission on normal standard commercial terms and conditions. The rate of commission is 5% (plus GST) of the total funds raised from the placement of any such Shortfall Shares.

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By way of example, if the Shortfall was 10,000,000 Shortfall Shares and they are placed at the Issue Price of 0.2 cent ($0.002) per share then Foxfire would be paid commission of 5% (plus GST) of the $20,000 raised by placement of those Shortfall Shares: being $1,000 (plus GST).

Mr Patrick John Volpe, the Chairman and a substantial shareholder of the Company, is a consultant to, and substantial shareholder of, Foxfire.

4.10. New Shares Issued

The Directors will proceed with the allotment of the New Shares which are the subject of this Offer Document as soon as possible after the Closing Date.

A transaction confirmation statement, which is essentially a holding statement, will be issued to Applicants confirming the issue of the New Shares.

New Shares will rank equally with other Shares on issue.

All Application Money shall, pending achieving the Minimum Subscription and allotment and issue of the New Shares, be held by the Company in trust in a bank account established solely for the purpose of depositing Application Money received. Any interest earned on those moneys shall be to the account of the Company.

It is the responsibility of Applicants to determine their allocation of New Shares prior to dealing in those securities. Any Applicants who sell or otherwise deal in any Shares before they receive their transaction confirmation statements will do so at their own risk.

The Entitlement and Acceptance Form which accompanies this Offer Document contains a warranty that the Applicant has personally received the complete and unaltered Offer Document prior to completing the Entitlement and Acceptance Form, or where the Applicant pays the Application Moneys by Electronic Funds Transfer, prior to making such payment.

The Company reserves the right to not accept an Application from a person if it has reason to believe that, when that person was given access to the Entitlement and Acceptance Form, they were not provided with the Offer Document or any relevant supplementary Offer Document or any of these documents were incomplete or altered. In any such case, the Application Money received from the Applicant will be refunded in full without interest.

4.11. Application for Listing

The Company will apply to ASX for quotation of the New Shares issued under the Offer. If ASX does not grant quotation of the New Shares within three months of the date the Offer opens, then the Company will refund all Application Monies, without interest, as soon as possible. The fact that ASX may list the New Shares is not to be taken in any way as an indication of the merits of the Company or the New Shares.

ASX takes no responsibility for the contents of this Offer Document, makes no representations as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss arising from or in reliance upon any part of the content of this Offer Document

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4.12. Costs of the Offer

The estimated costs of the Offer (excluding GST) payable by the Company are as follows:

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

Description Amount
$
ASX fee 4,939.00
Printing and collating documents and postage 25,000.00
Share registry fees 3,000.00
Underwriting fee – Trayburn 15,113.55
Underwriting fee – Monvale 2,500.00
TOTAL ESTIMATED COSTS 50,552.55
----- End of picture text -----*

The ASX fee is calculated on the basis that Rights Issue raises the full amount of $1,011,145 resulting in the issue of 505,572,770 New Shares.

In addition to the above costs, Foxfire will be paid a fee of 5% (plus GST) of the amount raised from the placement of any Shortfall Shares. It is not possible for the Company to estimate the number of Shortfall Shares that will be placed by Foxfire and therefore the Company is unable to estimate the fee that may be payable to Foxfire.

5. HOW TO APPLY

5.1. Entitlement

The Entitlement of an Eligible Shareholder is set out in the Entitlement and Acceptance Form accompanying this Offer Document which will be sent to Eligible Shareholders on the Dispatch Date.

Eligible Shareholders will be entitled to 7 New Shares for every 9 Shares held as at the Record Date. This Entitlement is subject to the right of the Company to scale back the number of New Shares issued to any Applicant if the acceptance of the Application by that Eligible Shareholder would result in breach of section 606 of the Corporations Act.

Fractional entitlements will be rounded up to the nearest whole New Share.

Shareholders with multiple holdings of Shares will receive more than one set of Offer Documents and will have a separate Entitlement for each holding.

5.2. Choices

If you are an Eligible Shareholder, you may:

take up all of your Entitlement;
take up part of your Entitlement and allow the balance of your Entitlement to lapse;
allow all of your Entitlement to lapse.

5.3. Applying for New Shares

The Entitlement and Acceptance Form will allow you to apply for a lesser number of New Shares than your Entitlement. An Eligible Shareholder may take up all or part of their Entitlement by completing

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their personalised Entitlement and Acceptance Form which should accompany this Offer Document, and returning it together with the correct Application Monies by no later than the Closing Date.

The Company may, but is not obliged to, accept any Application received after the Closing Date if the Application is postmarked prior to the Closing Date.

If an Application is rejected for any reason then the Company will refund the excess Application Monies to the Eligible Shareholder without interest.

5.4. Applying for additional Shares

The maximum number of New Shares that an Eligible Shareholder may apply for under the Offer is their Entitlement. Shareholders may not apply for additional New Shares in excess of their Entitlement.

5.5. Payment

Payment of Application Monies (Application Monies must be equal to the Offer Price multiplied by the total number of New Shares applied for) will only be accepted in Australian currency, and as follows:

(1) Through Electronic Funds Transfer. To pay by EFT Eligible Shareholders must make their payment to the Company using the Bank account details and unique payment reference number set out in their personalised Entitlement and Acceptance Form. An Eligible Shareholder with multiple holdings will have multiple payment reference numbers.

To ensure you receive your Entitlement in respect of a particular holding, you must use the payment reference number shown on each personalised Entitlement and Acceptance Form when paying for any New Shares that you wish to apply for in respect of that holding.

Eligible Shareholders making payment via EFT do not need to complete and return their personalised Entitlement and Acceptance Form. However returning the Form to the Company will assist in reconciling the Application Monies received.

Applicants must be aware that their own financial institutions may impose earlier processing cut-off times for electronic payments. It is the responsibility of Applicants to ensure that payment is submitted through EFT with sufficient time so that it is received before the close of the Offer.

(2) By cheque, bank cheque or money order as follows:
complete your personalised Entitlement and Acceptance Form;
attach your payment of Application Monies which must be drawn on an Australian Bank, Australian branch of a Financial Institution or by money order and be made payable in Australian currency;
address the cheque, bank cheque or money order to ‘Botswana Metals Limited – Share Subscription Account’ and cross it ‘Not Negotiable’; and
return the completed Entitlement and Acceptance Form and payment by no later than the Closing Date to:

Botswana Metals Limited Rights Issue Suite 3 16 Cotham Road Kew, Victoria 3101 Australia

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Cash payments will not be accepted. Receipts for payments will not be issued. The Company does not accept any responsibility if Applicants do not follow the instructions above.

If the amount of Application Monies provided are insufficient to pay in full for the number of New Shares applied for (or the full Entitlement in the case of payment by EFT) then the Applicant will be regarded as having applied for such whole number of New Shares as is covered in full by the Application Monies provided. Alternatively, the Company may in its discretion reject the Application, in which case the Application Monies will be refunded without interest.

5.6. Effect of Application

By applying for New Shares under the Offer (including by way of payment through EFT), an Eligible Shareholder is taken to:

(1) agree to be bound by the terms and conditions set out in this Offer Document and the accompanying Entitlement and Acceptance Form;
(2) acknowledge that the investment in Shares is speculative and is subject to a wide range of risks including risks as detailed in this Offer Document;
(3) represent and warrant that they satisfy the criteria of being an Eligible Shareholder as set out in this Offer Document;
(4) represent and warrant that their acquisition of the number of Shares specified on the Entitlement and Acceptance Form will not result in a breach of section 606 of the Corporations Act;
(5) irrevocably apply for the issue of the number of Shares specified on the Entitlement and Acceptance Form and agree to accept those securities;
(6) authorise the Company to place the Eligible Shareholder’s name on the Register of Members of the Company in respect of the Shares;
(7) acknowledge that, whether or not the Eligible Shareholder has done so, the Eligible Shareholder has had the opportunity to read the public announcements by the Company that are available on the ASX website at http://www.asx.com.au/ by searching under the Company’s stock code;
(8) acknowledge that the Eligible Shareholder has sufficient experience and expertise to make, and has made, its own assessment as to the nature and quality of the assets and liabilities, financial position and performance, profits and losses and prospects of the Company, before deciding to subscribe for the Shares, including, as necessary, by obtaining independent professional advice, and that the Eligible Shareholder was satisfied as to those matters before lodging any Application for the Shares;
(9) agree that no warranty or representation (express or implied) has been given or made by any of the Company, any person on behalf of the Company or by, or on behalf of, any of the Directors or officers of the Company as to:
the merits or otherwise of subscription for Shares;
the value of the Shares;
the assets and liabilities, financial position and performance, profits and losses and prospects of the Company;
the value of the assets of the Company; or

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the completeness or accuracy of the information available to the Eligible Shareholder regarding the Company;
(10) acknowledge that the Eligible Shareholder has decided to subscribe for the Shares based solely on its own investigations;
(11) release and discharge (to the maximum extent permitted at law) the Company and each of its Directors, officers and agents from any action or claim for any loss or damage which the Eligible Shareholder may suffer as a result of the subscription for Shares or as a result of the occurrence of any future act matter or thing which may adversely affect the value of any such Shares, or the existence or value of the assets of the Company; and
(12) agree to be bound by the Constitution.

Any Application under the Offer (including by way of payment through EFT) cannot be withdrawn once it is lodged.

5.7. Allowing Entitlement to lapse

Eligible Shareholders who do not wish to accept the Offer can take no action and all of their Entitlement will lapse and their shareholding will be diluted.

6. PURPOSE AND EFFECT OF OFFER

6.1. Use of funds

Funds raised under the Rights Issue may be used as follows:

to pay the costs of the Rights Issue;
for working capital (including to pay the corporate and administrative overheads of the Company);
to pay creditors of the Company (including Directors for accrued and unpaid fees); and
if justified, minimal exploration on the Company’s prospecting licences that are outside the BCL joint venture, in particular PL 59/2008.

The Minimum Subscription, if achieved, will ensure that, barring any unforeseen circumstances, the Company has sufficient funds to sustain its operations for at least two quarters.

If the Minimum Subscription is not achieved then the Directors will consider the other options available to the Company which include:

scaling back, or closing, the operations in Botswana;
the sale, joint venture or relinquishment of all or part of the exploration licence portfolio in Botswana;
the raising of further equity and debt capital; and/or
seeking other opportunities that may enhance the ability of the company to raise funds for the benefit of shareholders.

There can be no guarantee that any or all of these events will occur in which case the Company may not be able to continue as a going concern.

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6.2. What is the effect of the Offer on Shareholders and on control of the Company

If Eligible Shareholders take up their full Entitlement under the Offer they will not be diluted by the Offer. If Eligible Shareholders do not exercise their Entitlement under the Offer, or only exercise part of their Entitlement, they will be diluted. Ineligible Shareholders will have their holdings diluted by the Offer. The extent of any dilution will depend on the level of participation in the Offer.

Although an Eligible Shareholder can avoid dilution of their interest by taking up their full Entitlement, such Shareholders will be diluted by subsequent capital raisings by the Company which are not made on a pro-rata basis.

The effect of the Offer on control of the Company will depend upon a number of factors including:

the level of Eligible Shareholder participation in the Offer and the identity of Eligible Shareholders who do participate in the Offer; and
if applicable, the level of Shortfall remaining following the close of the Offer, the identity of investors who participate in any placement of the Shortfall and the level of such investor participation; and
if applicable, the number of New Shares taken up by the Underwriters.

It is not possible for the Directors to predict the final level of participation and Shortfall under the Offer, or the identity of Eligible Shareholders who will subscribe for their Entitlements.

The Directors are also unable to state with certainty the identity of any prospective subscribers under the Shortfall, or the total number of Shortfall Shares which will or can be placed.

Assuming that none of the subscribers for the Shortfall are existing Shareholders, , then the maximum dilutionary effect on existing Shareholders will be as follows based on the assumptions stated.