VERITY RESOURCES LIMITED — Interim / Quarterly Report 2011

Jul 28, 2011

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TO: COMPANY ANNOUNCEMENTS OFFICE ASX LIMITED

Market Cap

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DATE: 29 JULY 2011

Cash

QUARTERLY REPORT TO 30 JUNE 2011

Issued Capital

SUMMARY

Cash position as at 30 June 2011 $3,266,000.

Substantial shareholders

Highlights

Dibete

Directors

A 6000m program was completed at Dibete during the quarter with significant Cu-Ag mineralisation intersected along two northwest – southeast trending structures.

Some of the most significant intersections from this drilling include:-

• 11m @ 4.5% Cu 229.9g/t Ag from 33m in DBRC028 (includes 3m @ 8.16% Cu 469g/t Ag)

• 17m @ 2.7% Cu 40.5g/t Ag from 16m in DBRC081 (includes 3m @ 6.7% Cu 44.5g/t Ag from 24m & 3m @4.7% Cu 106.9g/t Ag from 27m)

Registered Office

• 12m @ 1.8% Cu 42g/t Ag from 33m in DBRC094 (includes 4m @ 4.2% Cu 95g/t Ag from 37m)

• 6m @ 2.3% Cu 117g/t Ag from 34m in DBRC097 (includes 2m @ 5.7% Cu 322.5g/t Ag from 34m)

• 9m @ 2.8% Cu 87.3g/t Ag from 33m in DBRC107

• 10m @ 3.9% Cu 110g/t Ag from 43m in DBRC108 (includes 4m @ 9.2% Cu 268g/t Ag from 43m)

Contact

The mineralisation is still open along both structures (6100E and 6400E) and consists of both secondary oxide and sulphide mineralisation. The sulphide mineralogy consists of supergene and primary zones of chalcocite, pyrite and bornite vein swarms. The primary mineralisation may extend to the south associated with a VTEM anomaly. This needs to be confirmed by additional drilling.

Interpretation of satellite imagery has identified further structures parallel to those known to control the mineralisation on lines 6100E and 61400E.

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Airstrip Copper

An 16 hole RC drill program recently completed to evaluate the supergene mineralisation at Airstrip Copper prospect intersected primary Cu-Ag mineralisation associated with a second IP conductor. Hole ACRC 067 intersected:-

• 6 m @ 2.7% Cu and 72g/t Ag from 68m

• Including 1 m @ 8.8% Cu and 214g/t Ag from 70m

This intersection confirms that this second IP conductor (C12, Figure 1), some 250m to the south of the discovery hole in the first conductor (C6, Figure 1), is also associated with primary Cu–Ag mineralisation. The hole intersected the western end of a 400m long IP anomaly. Modelling of data is in progress.

At least 16 IP conductors have been identified for a total strike length of 1900m within the IP grid covering 1.5km x 1km.

As announced on 21[st] July 2011 a further five IP conductors and one VTEM anomaly will be drill tested commencing in late July 2011.

Maibele North

New VTEM targets within the area of the known Maibele North Ni-Cu mineralisation have been identified. These are oblique to the general trend of the host serpentinite and mineralisation, and have not been effectively tested by previous drilling. RC and diamond drilling of these targets is planned for next quarter.

Details

PL 111/94 Mokoswane

Dibete Prospect

A 93 hole RC drilling program was completed at the Dibete (6356m) and Dibete East (150m) prospects. Dibete East is considered to be an eastwards extension of the Dibete prospect that extends eastwards out of PL 111/94, through PL 54/98 and into PL 47/2004.

The drilling on Dibete prospect was specifically aimed at testing the supergene mineralisation present and to identify controls on the distribution of mineralisation.

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Figure 1. Plan view of the modeled copper mineralisation superimposed over the IP resistivity low anomaly. The IP anomaly trends north east while the mineralisation follows interpreted structures (green lines) that trend north west

All significant intersections are included in Table 2, and include:-

• 11m @ 4.5% Cu 229.9g/t Ag from 33m in DBRC028 (includes 3m @ 8.16% Cu 469g/t Ag)

• 17m @ 2.7% Cu 40.5g/t Ag from 16m in DBRC081 (includes 3m @ 6.7% Cu 44.5g/t Ag from 24m & 3m @4.7% Cu 106.9g/t Ag from 27m)

• 12m @ 1.8% Cu 42g/t Ag from 33m in DBRC094 (includes 4m @ 4.2% Cu 95g/t Ag from 37m)

• 6m @ 2.3% Cu 117g/t Ag from 34m in DBRC097 (includes 2m @ 5.7% Cu 322.5g/t Ag from 34m)

• 9m @ 2.8% Cu 87.3g/t Ag from 33m in DBRC107

• 10m @ 3.9% Cu 110g/t Ag from 43m in DBRC108 (includes 4m @ 9.2% Cu 268g/t Ag from 43m)

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Four types of mineralisation are evident from this drilling and are related to the degree of oxidation. Supergene oxide copper is exposed at surface in outcrops, trenches and old workings, and typically up to 35 metres downhole. Mineralogy consists of malachite, azurite, and chrysocolla. This zone forms a blanket spreading out from the underlying primary mineralisation. RC drill results typically show Cu enrichment concentrated between 18 to 35 metres in this zone.

A supergene sulphide transition zone is typically found from about 35 to 38 metres downhole consisting of chalcocite and pyrite with minor malachite. Laboratory results show Cu values gradually increase through the transitional zone approaching the primary mineralisation.

From approximately 38 to 41 metres is a mixed primary and supergene sulphide zone consisting of chalcocite, pyrite, and bornite vein swarms with traces of malachite seen on fractures. Assay results indicate the primary bornite vein swarms, as well as the supergene mineralisation, have associated silver.

Previously identified satellite imagery linears (Figure 1) were found to be the controlling structures on the broad distribution of supergene oxide mineralisation and on the location of supergene sulphide and primary mineralisation at greater depth.

Modelling of the mineralisation has shown that a supergene oxide zone is more extensive than the underlying supergene sulphide and primary zone mineralisation as shown in the cross section in Figure 3. Long section for Line 6100E is included as Figure 2.

Figure 2. Long section on line 6100E showing supergene oxide and supergene sulphide and primary sulphide mineralisation.

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The final data for the VTEM survey was received and has been interpreted. Additional holes have now been recommended at Dibete to test for primary mineralisation.

In addition to the new interpretations at Dibete, coverage over the Crescent prospect has been acquired and will be further interpreted in relation to previous drilling carried out by BML.

Trenching is planned for Dibete across both the ground EM axes and across the satellite imagery linears, now considered to be faults. This program is to be completed in the September quarter and is aimed at identifying the nature of the structures that control mineralisation. To date 100 metres of trenching has been completed.

Figure 3. Cross section looking NW along Line 6100 E at hole DBRC 014.

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PL 110/94 Magogphate

Airstrip Copper Prospect

During the June Quarter the Company undertook an 16 hole Reverse Circulation (RC) drilling program (Holes ACRC053-70) totalling 1361 metres that was principally aimed at testing the supergene copper potential along a northwest-southeast anomalous corridor as defined by soil geochemistry and surface outcrops (including trenches) of secondary copper mineralisation.

Many of these supergene targets are close to previously identified IP conductors that are due to be drilled later this month in a program of combined diamond and RC drilling.

This drill program intersected secondary copper mineralisation in several holes but didn’t define an extensive high grade blanket of supergene copper as seen at the Dibete prospect. Results of the drilling are listed in Table 1 and include:-

• ACRC069 5m @ 0.31% Cu and 0.98g/t Ag from 3m

• ACRC070 5m @ 0.25% Cu and 1.4g/t Ag from 14m

• ACRC057 3m @ 0.35% Cu and 0.2g/t Ag from 25m

By far the most significant hole, ACRC067, intersected 6 metres of primary mineralisation at the western end of IP conductor C12 (Figure 4). This hole intersected:-

• 6 m @ 2.66% Cu and 71.9g/t Ag from 68m

• Including 3 metres @ 3.77% Cu and 92.6g/t Ag from 69m

• Including 1 metre @ 8.83%Cu and 214g/t Ag from 70m

Previous intersections to the east of ACRC067 in holes ACRC004 and 005 (Figure 4) are low grade, which is now recognised from additional work at the Discovery Conductor (C6) as a probable halo of lower grade or thinner veins surrounding high grade mineralisation.

Some minor gold to 0.45g/t found over 1 metre was intersected in the primary zone but was not associated with either Cu or Ni or Zn anomalies in the drill cuttings.

Ten additional trenches to obtain geological/geochemical data were completed across a series of IP Resistivity low axes or conductors, that are to be drilled in the September quarter. The Airstrip Copper discovery was made by drilling one of these IP conductors. A total of 670 metres of trenches were excavated (Figure 2) with visible copper mineralisation in trenches T2, T5 and T9.

Soil sampling to the west and south west of the existing grid has also been completed with a total of 1278 samples collected. Assay results are currently being assessed.

VTEM interpretations were completed at Airstrip Copper and elsewhere in PL 110/94 following receipt of the final data from Geotech Airborne Surveys. Targets were defined in detail and now require drilling. One VTEM target is present at Airstrip Copper and will be drilled in the September quarter.

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Additional IP is also planned for the Airstrip Copper prospect to extend coverage to the west and south west over the new soil grid. The anomalies in the Resistivity survey were not closed off in this direction previously and additional mineralised zones are anticipated in this new IP survey area.

Detailed interpretation of previous soil geochemistry was undertaken to assist with targeting of the recently completed supergene copper drill program at Airstrip Copper. Trends in both the regional structural direction of NE as well as in a NW direction are evident.

Compilation of intersections of supergene copper in previous trenches was also undertaken to assist with drill targeting.

Drilling of highly ranked IP conductors is to commence in the last week in July. Figure 4 shows the location of the target zones and the relationship to previous drill holes.

Figure 4. Location of the IP and VTEM conductors to be drilled for primary mineralisation and previous intersections associated with the current target conductors. Location of hole ACRC067 is shown at the end of conductor C12.

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Figure 5. Location of drill holes and recent trenches at Airstrip Copper prospect.

Maibele North

Mapping of old workings was carried out at Maibele North as potential for supergene copper is thought to be present. Pits excavated previously had fragments of malachite present in the soils confirming that copper had been the target in this previous work. The following map shows the distribution of the old workings in relation to drill holes. Few if any of the holes would have tested for the supergene potential under the old workings.

Figure 6 shows the distribution of old workings on two different horizons over a strike length of 90 metres at Maibele North.

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Figure 6. Location of supergene copper workings at Maibele North

The VTEM final data was received and interpreted to accurately model the anomalies. At Airstrip Copper one anomaly was identified in relatively close proximity to the discovery conductor, but apparently as a separate parallel conductive body. This conductor is to be drilled in the September quarter.

At Maibele North two separate conductors were identified that when modelled were shown to be at a significant angle to the regional structural trend but with a similar trend to the known mineralisation. These two conductors were not adequately drilled in the past and will also be drilled in the September quarter.

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In addition prospect 20B has now been shown to contain two VTEM anomalies, which are associated with an extensive base metals anomaly in both soils and stream sediments. Drilling of the VTEM anomalies is scheduled for the September quarter.

VTEM anomaly 10470-a lies on a different structural trend than the 20B prospect and could be a new zone of mineralisation. Ground follow up over this anomaly will be carried out next quarter.

PL 54/98 Takane

VTEM interpretation was completed over the tenement with identification of new targets and better definition of old targets. Twenty seven of the identified 46 targets modelled in the Magogaphate VTEM Block lie within PL 54/98 (Figure 7).

An extensive program of ground follow up of the targets within this tenement is now being planned. Some follow up has been carried out previously by BML and will be used to assist in drill hole planning.

Grid recovery has been carried out on Makhantlele and Kudumane grids to use the previous geochemical data with the current geo-referenced data sets. Recovery of the Mmatsiane and Jumbo grids was successfully carried out in the past.

Figure 7. Location of VTEM anomalies and previous prospects on PL47/2004 Gobe Shear.

One RC hole was drilled targeting VTEM anomaly 10555-a on the Dibete East prospect without encountering significant mineralisation. Further assessment of this area will be undertaken to determine whether satellite linears recently identified are significant in terms of mineralisation. Linears identified will be followed up by soil sampling and possibly drilling.

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In addition a further VTEM anomaly, No. 11340-a, was located at the intersection of NW trending and NNE trending satellite linears. The NW trending linears are along strike from the linear identified on Line 6100E at Dibete prospect which is strongly mineralised. The prospect lies approximately 2km along strike of the satellite linear from DBRC006 at Dibete prospect.

Further ground follow up on this prospect is to be carried out in the September quarter.

PL59/2008 Shashe South

Soil sampling was carried out on a grid that covered potential extensions of a known ultramafic body in PL 46/2004 that is thought to be mineralised. Soil sampling was carried out over 6 lines with a total of 844 samples collected. Results are currently being interpreted (Figure 8).

Figure 8. Soil sampling grid on PL59/2008 and 360/2008. Red dots are individual soil samples.

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PL46/2004 Sampowane

Six RC drill holes for a total of 420 metres were drilled on mafic bodies and base metal anomalies defined by soil sampling (Figure 9). The holes intersected amphibolites, serpentinites and probable altered equivalents of amphibolites. Geochemical analyses showed no significant anomalies. Additional follow up of the potentially mineralised horizons is warranted.

A regional stream sediment follow up survey was completed in the June Quarter. The aim was to test around areas previously found to have anomalous values and to restrict the search area to be tested with additional follow up techniques such as soil sampling, mapping and ground geophysics.

An extension application was made over the tenement which is now subject to determination by the Department of Geological Survey.

Figure 9. Location of drill holes on PL46/2004

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PL44/2004 Shashe East

A desktop review and data compilation was undertaken in the Quarter.

Ultramafic bodies containing gossans are known in the tenement application area adjoining PL 44/2004 to the north.

A review of previous GEOTEM data does not indicate anomalous responses within PL 44/2004. Interpretation of satellite imagery suggests that there may be very iron rich rock types present in the NW corner of the tenement that could be part of the ultramafic sequence previously located outside PL 44/2004. Follow up of this area is planned for the September Quarter.

PL 47/2004 Gobe Shear

Dibete East Prospect

One drill hole was drilled into VTEM anomaly 11555-a to test an alternate interpretation of the anomaly. This hole was 150 metres deep and did not intersect any significant mineralisation.

Interpretation was also undertaken on VTEM anomaly 11340-a with a very low order response found that did not warrant drilling.

Further work on satellite imagery interpretation is in progress and is expected to assist in further evaluation of the Dibete East prospect area.

PL48/2004 Shashe West

Two RC holes were drilled targeting VTEM anomalies associated with an amphibolite horizon. Previous Gold prospecting has been reported to have taken place which is not surprising given the gold and arsenic anomalies obtained by BML drainage sampling close to the amphibolite horizon. Drilling intersected graphite and minor sulphides with no significant levels of gold.

PL 14/2003 Majante

The VTEM survey covered part of this tenement and the anomalies related to the Mmamanaka prospect were reinterpreted and then reconciled against previous drilling. It was found that only one of the 11 holes previously drilled is likely to have adequately tested its target. The previous IP data when used in conjunction with the new VTEM data gives a more accurate interpretation.

Additional checking of the targets is now required using soil geochemical data to determine ranking of the new target areas.

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PL 70/2008

No significant work was undertaken during the quarter. Previous soil samples were dispatched to the laboratory and will be further interpreted when results are available.

Recovery of the 20B grid on the adjoining PL110/94 is in progress and will allow use of extensive geochemical data obtained by a previous explorer that is thought to cover the anomalous part of PL 70/2008.

PL360/2008 Mmadinare

Soil sampling was carried out on a grid that covered potential extensions of a known ultramafic body in PL 46/2004 that is thought to be mineralised. Soil sampling was carried out over 6 lines with a total of 844 samples collected (Figure 8). Results are currently being interpreted.

PL158/2009 Lepokole

Drainage sampling on the Lepokole tenement to target the interpreted amphibolite units was completed with a total of 66 samples. Some of the samples were taken to follow up a significant silver anomaly recovered from the previous stream sediment sampling program. Sample locations are shown on Figure 10. Results have not yet been received from the laboratory.

Additional satellite imagery interpretation to look for structures similar to those controlling mineralisation at Dibete is in progress.

Figure 10. Location of stream sediment samples in PL 158/2009 Lepokole.

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TENEMENT STATUS

During the quarter there was the following activity with regard to the Company’s portfolio of Prospecting Licences:

• PL111/2011 was granted from 1 July 2011, and

• An application for the first renewal of PL360/2008 was lodged with the Department of Geological Survey (“DGS”).

The Company is still awaiting confirmation from the DGS regarding the following:

• Extension applications lodged for PL44/2004, PL46/2004, PL47/2004 and PL48/2004,

• First renewal applications lodged for PL59/008 and PL70/2008, and

• A Prospecting Licence application entitled Xia2.

BML interest in PL45/2004 Letlhakane

Pursuant to the Scheme of Arrangement between the shareholders of A-Cap Resources Limited (“A-Cap”) and BML, as approved by those shareholders of A-Cap in 2007 and subsequently approved by the Court , BML was granted an interest in the PL45/2004 Letlhakane tenement currently held by A-Cap. The interest relates only to base and precious metals and not to uranium or radioactive minerals. A-Cap is currently disputing BML 's interest in the Lethlakane tenement . BML is considering it rights and taking advice in relation to this situation with A-Cap and, subject to this advice, reserves the right to protect its interest.

Pat Volpe

Chairman

( The information in this report that relates to Exploration Results is based on information compiled by Mr Peter Temby, a consultant employed by Anpet Exploration Pty Ltd and a member of The Australian Institute of Geoscientists.

Mr Temby has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activities which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Temby consents to the inclusion in this report of matters based on his information in the form and context in which it appears.)

Table 1. Significant Drill Results from Airstrip Copper Prospect – June Quarter

Significant Results- Airstrip Copper June Quarter Drilling Program	Significant Results- Airstrip Copper June Quarter Drilling Program	Significant Results- Airstrip Copper June Quarter Drilling Program	Significant Results- Airstrip Copper June Quarter Drilling Program	Significant Results- Airstrip Copper June Quarter Drilling Program	Significant Results- Airstrip Copper June Quarter Drilling Program	Significant Results- Airstrip Copper June Quarter Drilling Program
Hole No	Easting	Northing	Azimuth	Dip	**Total Depth **	**Intersection **	From	To	Cu	Ag	Pb	Zn	Ni	Au
	WGS84	WGS84	TRUE	degrees	m	m	m	m	%	g/t	%	%	%	g/t
ACRC053	631365	7595350	360	60	75	results pending
ACRC054	631450	7595340	360	60	75	1	1	2	0.36	<0.2	0.0002	0.006	0.003
ACRC054						2	31	33	0.29	<0.2	0.0003	0.007	0.003
ACRC055	631500	7595300	360	60	75	1	74	75	0.013	<0.2	0.001	0.006	0.001	0.11
ACRC056	631585	7595235	360	60	75	1	57	58	0.001	<0.2	0.001	0.008	0.0003	0.45
ACRC056						2	71	73	0.014	0.2	0.001	0.003	0.002	0.14
ACRC057	631620	7595150	360	60	75	1	22	23	0.22	0.2	0.001	0.006	0.004
ACRC057						3	25	28	0.35	0.2	0.001	0.009	0.003
ACRC057						2	31	33	0.28	2.4	0.001	0.008	0.003
ACRC058	631690	7595160	360	60	75	1	6	7	0.4	0.24	0.073	0.014	0.004
ACRC059	631730	7595180	360	60	75	no significant intersection
ACRC060	631485	7595020	360	60	80	4	13	17	0.29	0.9	0.031	0.024	0.006
ACRC061	631750	7595040	360	60	75	1	39	40	0.62	5.3	0.001	0.006	0.007
						1	58	59	0.21	1.8	0.001	0.014	0.005
ACRC062	631865	7595030	360	60	75	no significant intersection
ACRC063	631965	7594980	360	60	75	1	5	6	0.3	<0.2	0.001	0.007	0.002
ACRC064	631835	7594920	360	60	75	2	4	6	0.28	<0.2	0.001	0.008	0.005
ACRC065	631935	7594920	360	60	75	no significant intersection
ACRC066	631990	7594900				no significant intersection
ACRC067	631875	7594830	360	60	81	7	68	75	2.32	63.8	0.018	0.019	0.006
ACRC067						6	68	74	2.66	71.9
ACRC067						3	69	72	3.77	92.6	0.03	0.02	0.005
ACRC067						1	70	71	8.83	214	0.035	0.019	0.005
ACRC068	632050	7594840	360	60	75	no significant intersection
ACRC069	632110	7594760	360	60	75	5	3	8	0.31	0.98	0.001	0.006	0.003
ACRC070	632180	7594700	360	60	75	5	14	21	0.25	1.4	0.001	0.013	0.007
All results > 0.2% Cu included in calculated intervals,intervals of mineralised waste of upto 1 metre included in some intervals.

Table 2. Significant Drill Results from Dibete – June Quarter

Hole ID	Depth From m	Depth To m	Interval m	Avg Cu %	Avg Ag g/t	Mineralisation Type	Local Grid Line
DBRD-004	3	4	1	0.40	<3	Supergene oxide	Line 6400
DBRD-004	27	36	9	0.95	19.0	Supergene oxide
including	27	31	4	1.28	25.4	Supergene oxide
DBRD-005	8	11	3	0.69	8	Supergene oxide	Line 6400
DBRD-005	14	15	1	0.35	3.6	Supergene oxide
DBRD-005	22	28	6	0.51	<3	Supergene oxide
including	23	24	1	1.06	<3	Supergene oxide
DBRD-005	31	35	4	0.70	4.1	Supergene + primary
DBRD-005	41	42	1	0.43	<3	Supergene + primary
DBRD-005	46	47	1	0.52	4.2	primary
DBRD-006	24	40	17	1.94	31	Supergene oxide	Line 6100
including	26	31	5	4.19	90.5	Supergene oxide
DBRD-006	40	42	3	0.58	4.1	Supergene + primary

Hole ID	Depth From m	Depth To m	Interval m	Avg Cu %	Avg Ag g/t	Mineralisation Type	Local Grid Line
DBRD-013	32	40	8	0.78	22.75	Supergene oxide	Line 6100
including	37	39	2	2.62	40	Supergene oxide
DBRD-013	40	50	10	1.13	160	Supergene + primary
including	42	45	3	8.01	192	Supergene + primary
DBRC-014	16	37	21	1.32	67.7	Supergene oxide	Line 6100
including	27	37	10	2.33	126.5	Supergene oxide
including	39	42	3	1.6	27.8	Supergene oxide
DBRC-014	44	52	8	3.86	364.1	Primary + supergene
including	48	51	3	9.16	894	Primary + supergene
DBRC-014	53	54	1	0.8	17.9	Primary + supergene
DBRC-026	5	6	1	0.59	6	Supergene oxide	line 6100
DBRC-026	13	16	3	1.29	7	Supergene oxide
DBRC-028	33	44	11	4.48	229.9	Supergene +primary	Line 6100
including	41	44	3	8.16	469	Supergene + primary
DBRC-030	6	8	2	0.40	11.7	Supergene oxide	Line 6100
DBRC-030	18	25	7	1.39	22.2	Supergene oxide
including	18	19	1	6.78	114	Supergene oxide
DBRC-030	37	39	2	2.0	0.5	Supergene + primary
DBRC-046	14	15	1	0.4	0.02	Supergene oxide	Line 6400
DBRC-046	27	29	2	1.41	0.6	Supergene oxide
DBRC-048	0	1	1	0.5	3.5	Supergene oxide	Line 6400
DBRC-048	15	17	2	0.99	0.9	Supergene oxide
DBRC-054	40	41	1	0.53	0.3	Primary	Line 6600
DBRC-079	30	32	2	1.62	1.6	Primary + supergene	Line 6100
DBRC-079	34	35	1	.69	4.2	Primary + supergene
DBRC-079	38	39	1	0.36	4.3	Primary

Hole ID	Depth From m	Depth To m	Interval m	Avg Cu %	Avg Ag g/t	Mineralisation Type	Local Grid Line
DBRC-081	16	33	17	2.73	40.5	Supergene + primary	Line 6100
including	24	27	3	6.69	44.5	Supergene oxide
including	27	33	6	2.63	57.5	Primary + supergene
including	27	30	3	4.68	106.9	Primary + supergene
DBRC-082	15	28	13	0.93	8.4	Supergene oxide	Line 6100
including	23	27	4	1.32	6.2	Supergene oxide
DBRC-082	40	41	1	0.52	2.9	primary
DBRC-089	18	28	3	1.02	3.97	Supergene oxide	Line 6100
including	18	20	2	1.89	16.2	Supergene oxide
DBRC-090	28	29	1	0.39	<0.2	Supergene oxide	Line 6100
including	36	38	2	6.25	214	Supergene + primary
DBRC-094	0	2	2	0.49	1.7	Supergene oxide	Line 6100
DBRC-094	33	45	12	1.78	42	Supergene oxide
Including	37	41	4	4.21	95	Supergene oxide
DBRC-094	52	54	2	0.53	31.2	Supergene oxide
DBRC-097	23	26	3	0.43	8.1	Supergene oxide	Line 6100
DBRC-097	34	40	6	2.27	117	Supergene + primary
including	34	36	2	5.7	322.5	Supergene oxide
DBRC-098	17	24	7	1.2	14.5	Supergene oxide	Line 6100
including	19	23	4	1.80	23.6	Supergene oxide
DBRC-098	31	35	4	1.75	1.1	Supergene + primary
including	32	35	3	2.18	1.2	Supergene + primary
DBRC-099	37	46	9	1.82	68.9	Supergene + primary	Line 6100
including	37	43	6	2.49	95.8	Supergene + primary
DBRC-100	27	35	8	1.44	66.2	Supergene oxide	Line 6100
including	27	30	3	3.39	168	Supergene oxide
DBRC-100	35	40	5	3.58	196	Supergene + primary
Including	38	39	1	10.4	620	Supergene + primary

Hole ID	Depth From m	Depth To m	Interval m	Avg Cu %	Avg Ag g/t	Mineralisation Type	Local Grid Line
DBRC-101	48	49	1	0.81	21.4	Primary
DBRC-101	51	52	1	0.33	0.9	Primary
DBRC-104	3	24	21	0.81	21.7	Supergene oxide	Line 6100
including	6	9	3	2.89	65.0	Supergene oxide
DBRC-106	45	46	1	0.53	<0.2	Supergene oxide	Line 6100
DBRC-107	0	3	3	0.39	<0.2	Supergene oxide	Line 6100
DBRC-107	6	11	5	0.43	0.9	Supergene oxide
DBRC-107	14	23	9	0.49	4.6	Supergene oxide
DBRC-107	24	25	1	0.34	4.1	Supergene oxide
DBRC-107	26	27	1	0.48	8.2	Supergene oxide
DBRC-107	31	33	2	0.46	8.4	Supergene oxide
DBRC-107	33	42	9	2.78	87.3	Primary + supergene
including	35	40	5	4.46	183	Primary + supergene
DBRC-107	43	45	2	0.53	7.2	Primary + supergene	Line 6100
DBRC-108	37	38	1	0.72	0.3	Primary + supergene	Line 6100
DBRC-108	43	53	10	3.86	110	Primary + supergene
including	43	47	4	9.16	268	Primary + supergene
DBRC-110	15	23	8	1.07	<0.2	Supergene oxide	Line 6100
including	17	21	4	1.69	<0.2	Supergene oxide
DBRC-110	28	29	1	0.42	0.5	Supergene oxide
DBRC-111	23	25	2	0.41	1.7	Primary + supergene	Line 6100
DBRC-111	44	51	7	2.1	49.7	Primary + supergene
including	45	48	3	4.08	100	Primary + supergene
DBRC 113	24	25	1	0.42	1.9	Supergene oxide	Line 6100
DBRC-113	40	42	2	1.16	0.2	Supergene oxide

Hole ID	Depth From m	Depth To m	Interval m	Avg Cu %	Avg Ag g/t	Mineralisation Type	Local Grid Line
DBRC-114	4	5	1	0.4	0.8	Supergene oxide	Line 6400
DBRC 114	24	37	13	1.23	36.1	Supergene oxide
including	26	33	7	1.82	53.5	Supergene oxide
DBRC 114	40	44	4	2.57	61.7	Primary + supergene

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

Name of entity

	BOTSWANA METALS LIMITED	BOTSWANA METALS LIMITED
	ABN 96 122 995 073 Consolidated statement of cash flows
			30 JUNE 2011
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net Operating Cash Flows		Current quarter $A’000		Year to date (...6....months) $A’000
		- -1,154 - - -343 - 47 - - -		- -3,556 - - -1,224 - 198 - - -
		-1,450		-4,582
Cash flows related to investing activities 1.8 Payment for purchases of:(a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		- - -127 - - - - - -		- - -251 - - - - - -
		-127		-251
		-1,576		-4,833

• See chapter 19 for defined terms.

Appendix 5B Page 1

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Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	-1,576	-4,833
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows	-1 - - - - -	2,847 - - - - -
	-1	2,847
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	-1577 4,845 -1	-1,985 5,305 -53
	3,266	3,266

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		112
		-
1.25	Explanation necessaryfor an understandingof the transactions
	During the quarter the following payments were made to directors: Salaries Mr P Volpe $75,688 Directors Fees Mr M Cellante $7,500 Dr P Woolrich $7,500 Total Directors Fees $15,000 Dr P Woolrich received $14,062.50 in consulting fees. Superannuation contributions totalling $7,487 accrued from the prior quarter were also paid onbehalfoftheDirectors.

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position.

• See chapter 19 for defined terms.

Appendix 5B Page 2

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Appendix 5B Mining exploration entity quarterly report

3.1 Loan facilities 3.2 Credit standby arrangements

Amount available Amount used $A’000 $A’000 - - - -

Estimated cash outflows for next quarter

4.1 Exploration and evaluation

• 4.2 Development

• 4.3 Production

• 4.4 Administration

Total

$A’000 400 - - 275 675

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other (provide details) Term Deposits	341	887
	1,021	2,237
	-	-
	1,904	1,721
Total: cash at end of quarter(item 1.22)	3,266	4,845

Changes in interests in mining tenements

6.1 Interests in mining tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements acquired or increased	Tenement reference	Nature of interest (note (2))	Interest at beginning ofquarter	Interest at end of quarter
	11/2011	Prospecting Licence	NIL	100%

• See chapter 19 for defined terms.

Appendix 5B Page 3

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Appendix 5B Mining exploration entity quarterly report

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note3) (cents)	Amount paid up per security (see note3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions	NIL	NIL
	NIL	NIL
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	143,717,844	143,717,844
	832	832	10 CENTS	10 CENTS
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	NIL	NIL
	NIL	NIL
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	71,857,670	71,857,670	Exercise price 10 CENTS	Expiry date 30 JUNE 2013
	NIL	NIL
	832	832	10 CENTS	10 CENTS
	50,000 1,366,666 1,366,666	NIL NIL NIL	10 CENTS 15 CENTS 20 CENTS	30 JUNE 2011 30 JUNE 2011 30 JUNE 2011
7.11 Debentures (totals only)	NIL	NIL

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

7.12 Unsecured NIL NIL notes (totals only)

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does give a true and fair view of the matters disclosed.

Sign here: ................. ................... Date: .... 29 JULY 2011 ...... (Company secretary)

Print name: .............. RICHARD BAKER ...........................................

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

• 4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• See chapter 19 for defined terms.

Appendix 5B Page 5

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