VERITY RESOURCES LIMITED — Capital/Financing Update 2017

Sep 3, 2017

ASX ANNOUNCEMENT 2 SEPTEMBER 2017

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ASX:BML

ABN: 96 122 995 073

Issued Capital: 1,824,315,814 ordinary shares

Directors:

Mr Patrick Volpe (Chairman) Mr Steve Groves (Director/Geologist) Mr Josh Letcher (Non-executive) Mr Ed Bulseco (Non-executive)

Registered Office:

Suite 506, Level 5 1 Princess Street, Kew Victoria, Australia, 3101

DRILLING UNDER WAY AT DIBETE AND AIRSTRIP COPPER

The Board of Botswana Metals Limited is pleased to announce that BML has commenced a 1500m Reverse Circulation (RC) drill program targeting highgrade copper and silver mineralisation at the Dibete (1000m of RC drilling) and Airstrip Copper (500m of RC drilling) projects in North-eastern Botswana. Dibete is approximately 7km south of the Maibele Nickel discovery and Airstrip Copper is less than 1 km to the west of Maibele.

Site and access track clearing is currently underway, with a drill rig due to arrive on site in the coming week.

The program will be funded from the recent successful capital raising (ASX Announcement 13 August 2017). Results are expected in the December quarter and the Company intends to provide progress updates where material.

Contact:

p: +61 (3) 9855 1885 e: info@botswanametals.com.au

About Botswana Metals

Botswana Metals is exploring for nickel, copper, cobalt, tantalum and lithium within its ~1,500 square kilometre exploration portfolio. These “new world” metals are becoming increasingly important as the world switches to cleaner sources of energy.

The company announced a maiden JORC Inferred Resource of 2.38Mt on 28[th] April 2015 from drilling within a small 185 square kilometre section of its exploration portfolio in which it had entered a joint venture with BCL. At the time cobalt was not included in the resource calculation.

The areas form part of the 3 Prospecting Licences under Joint venture with BCL Limited but since the JV agreement was signed in 2013, BCL was focused on the Nickel opportunities of the PL’s under JV.

The two copper discoveries were made by BML in 2011 and no exploration work has been conducted at either project since.

The new program will revisit the discoveries with a view of substantiating or otherwise a larger program going forward.

Previous IP sections at Dibete are shown below (Figure 5). To date, only two of the IP anomalies on lines 6100N and 6400N have been drill tested.

Historical drilling outside of the joint venture ground has intercepted further nickel as well as significant intercepts of copper and cobalt.

A soil sampling program detected traces of lithium and tantalum which warrant further exploration.

Large tracts of BML’s exploration portfolio remain unexplored.

COPPER MARKET OUTLOOK

A recent resurgence in the copper price has been largely driven by strong fundamentals including growing Chinese demand and a broad recovery in downstream construction and manufacturing industries including power, construction, machinery and white goods.

In addition to improving economic conditions, copper demand is expected to be substantially impacted by the growing electric vehicle market.

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Source : Kitco

Copper stockpile levels are near 5-year lows as current mining operations are becoming exhausted, and in turn adding to the supply deficit and growing price pressure.

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Source : Kitco
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Battery Materials Price Forecasts Summary

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Source: Canaccord Genuity Estimates

BML is strategically positioned to explore for New World metals including cobalt, lithium, nickel, tantalum and copper, which are becoming increasingly important as the World looks to potentially switches to cleaner sources of energy.

DRILL PROGRAM

The 1500m RC drilling program has been designed to test new mineralisation models at both the Dibete and Airstrip Copper – Silver projects. Approximately 1000m at Dibete and 500m at Airstrip will be completed. The program will comprise twin, scissor and close-spaced infill drilling to replicate a number previous intersections and to test gaps and extensions to the current mineralisation models.

Both projects have historically returned numerous shallow, very high grade copper and silver intersections in both supergene and primary mineralisation styles. No drilling has been undertaken on either project since 2011 but a new interpretation of the possible source of mineralisation is postulated following recent project and regional geological reviews (see Target Mineralisation Style below).

The new information generated by the drilling will provide a framework for further geological interpretation that will guide future regional and deeper exploration programs.

TARGET MINERALISATION STYLE

The high-grade copper and silver mineralisation at Airstrip and Dibete appear to be very similar in style and geology to the historically significant Messina Copper Deposits located approximately 230km to the south-east in South Africa. The Messina Copper district contains multiple high-grade copper deposits comprising breccia pipes, disseminated replacement and fissure deposits centred on NW-NE structural intersections within high-grade metamorphic rocks of the Limpopo Mobile Belt similar to those seen in the Magogophate Shear Zone. The Messina deposits were discovered initially by the recognition of narrow, high-grade copper veins close to surface, with the larger orebodies extending to over 1,400m depth spaced over a 15km strike zone. The area was mined from 1903 to 1993 and historical records estimate up to 42 million tons of ore at a grade of approximately 1.75% to 2% Cu were extracted at Messina. Similarities between Messina and Dibete/Airstrip, including the presence of narrow, extremely high-grade copper veins, spatial association of Karoo-aged dolerite dykes and mineralisation located on NW-NE structural and geological trends all suggest that this style of mineralisation is a valid and exciting new target type for the Magogophate Shear Zone.

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Figure 1: Location of the Airstrip and Dibete Prospects (highlighted in red) within BML's Magogophate exploration portfolio in North-eastern Botswana

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Planned new
Hole 2
Planned new
Holes 7 & 8
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Figure 2: Plan view of the Dibete Project showing modelled mineralisation shells (pink), previous drill holes (thin grey traces) and proposed holes (thicker black traces)

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Figure 3 & 4: Examples of sections through proposed holes 2 and 7 & 8, showing previous intersections and the targeted mineralisation shells

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6400N
6100N
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Figure 5: IP results from 2010 where IP anomalies from 2 lines, 6100N and 6400N, have been drill tested

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Figure 6: Dibete modelled supergene oxide Cu-Ag in drill hole intersections shown in green, overlying supergene and primary oxide sulphide mineralisation shown in purple.

The Board will keep the market informed as to the commencement of the proposed drill program designed to revisit and retest previous drilling at both Dibete and Airstrip Copper.

Patrick Volpe Chairman

( the figures that relate to mined tonnages and grades at the Messina Copper Mines are estimates based on historical records and_ _do not* comply with any JORC resource classification categories)

PROPOSED DRILL COLLARS

Table 1: Dibete Drill Collars

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HoleID Depth EAST NORTH RL AZI DIP Zone Comment
Follow up high grades in 081,
Hole 1 50 638225 7593866 0 225 -60 6100N
082, 079
scissor 014 into high grade
Hole 2 70 638179 7593903 0 137 -60 6100N
zone
Test mineralisation down-dip
Hole 3 70 638228 7593758 0 45 -60 6100N
of 108
Test mineralisation model
Hole 4 50 638227 7593797 0 45 -60 6100N
close to 030
Test mineralisation in 098 up
Hole 5 50 638228 7593835 0 45 -60 6100N
dip
Test mineralisation in 098
Hole 6 60 638214 7593821 0 45 -60 6100N
down dip
Test mineralisation in 014,
Hole 7 50 638190 7593868 0 45 -60 6100N
028 up dip
Test mineralisation in 014,
Hole 8 90 638173 7593853 0 45 -60 6100N
028 down dip
Test mineralisation down dip
Hole 9 70 638156 7593895 0 45 -60 6100N
of 100, 006
Hole 10 60 638153 7593915 0 45 -60 6100N Test drilling gap in model
Test mineralisation between
Hole 11 40 638148 7593943 0 45 -60 6100N
026 and 104
Test NW extension of
Hole 12 40 638135 7593956 0 45 -60 6100N
mineralisation
Test NW extension of
Hole 13 60 638124 7593945 0 45 -60 6100N
mineralisation
Test min model at 114 and
Hole 14 50 638492 7594006 0 225 -60 6400N
004 up dip
Test min model at 114 and
Hole 15 70 638510 7594023 0 225 -60 6400N
004 down dip
Test mineralisation model at
Hole 16 50 638482 7594031 0 225 -60 6400N
046
Test mineralisation model at
Hole 17 50 638533 7593926 0 225 -60 6400N
005
Hole 18 40 638517 7593948 0 225 -60 6400N Test drilling gap in model
TOTAL 1020
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Table 2: Airstrip Drill Collars

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HoleID Depth EAST NORTH RL AZI DIP Conductor Comment
Test down dip min on shoot
Hole1 90 631436 7595300 0 325 -60 C2
model beneath 130 and 019
Test down dip min on shoot
Hole2 175 631713 7595044 0 325 -60 C6
model beneath 071
Test down dip min on shoot
Hole3 110 631903 7594812 0 325 -60 C12
model beneath 067
Test down dip min on shoot
Hole4 120 631885 7594792 0 325 -60 C12
model beneath 098
TOTAL 495
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Competent Person

The information in this report that relates to Exploration Results is based on, and fairly represents, information and supporting documentation compiled by BML staff on site and provided to Mr Steve Groves who is a Member of The Australian Institute of Geoscientists. Mr Groves is Director of, and a consulting geologist to BML and has previously been employed as the Exploration Manager at BML. Mr Groves has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Groves consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

ABOUT THE BCL INVESTMENTS (PTY) LTD JOINT VENTURE:

KPMG have been appointed as Provisional Liquidators of BCL Investments (Pty) Ltd in October 2016. BML has requested that KPMG advise of their intentions in respect to the JV agreement. BML’s ASX announcement titled “Update Regarding BCL Limited” dated 13 October 2016 provided details of BML’s rights arising out of the provisional liquidation of BCL.

In summary:

Under the Farm-in Joint Venture Agreement if a party becomes insolvent (including being placed in provisional liquidation) then:

• (a) during the earning period (until a party has formally earned its interest) the solvent party may terminate the farm-in by notice to the insolvent party;

• (b) if a participant has earned its interest then:

• (i) the solvent party may compulsorily acquire the interest of the insolvent party at an agreed price or, if a price cannot be agreed, at a price recommended by a qualified person as the fair market value of the interest; or

• (ii) if there is no acquisition of the insolvent party’s interest, the joint venture can be terminated and the assets are to be realised and the net proceeds, after paying any liabilities of the joint venture, are to be distributed to the participants in proportion to their interests.

KPMG have advised that they are reviewing all their joint venture party relationships and will advise of their position when they are able to do so.