VERITY RESOURCES LIMITED — Interim / Quarterly Report 2013

Apr 23, 2013

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TO: COMPANY ANNOUNCEMENTS OFFICE ASX LIMITED

Market Cap

DATE: 24 April 2013

Cash

QUARTERLY REPORT TO 31 MARCH 2013

Cash at Bank as at 31 March 2013 is $434,000.

Issued Capital

An Appendix 5B is attached.

Summary of Activities

Substantial shareholders

• Correspondence with Department of Mines on three Retention Licence applications with advise expected in June 2013 quarter

• Communications with BCL Limited on joint venture exploration plans subject to Retention Licences being granted

• Continuation of mapping and soil sampling at PL 59/2008, PL 111/2011 and PL 46/2004 to identify potential new exploration targets.

Directors

Details:

Retention Licence’s for PL110/94, PL111/94 and PL54/98

During the quarter, BML attended to the correspondence and preparation of additional data required by the Department of Mines in Botswana for BML’s Retention Licence applications over its three discovery area’s (Airstrip Copper, Maibele North and Dibete).

Registered Office

Retention Licence applications lodged over areas of PL110/94, PL111/94 and PL54/98 are still being processed by the Department of Mines (“DOM”) and confirmation that all information required by the DOM in relation to the applications has been received.

It is expected that advice from the Department of Mines will be received in the June 2013 quarter on whether these applications will be granted or otherwise.

Contact

Joint Venture with BCL Limited on PL110/94, PL111/94 and PL54/98

In the December 2012 quarter, BML announced that it had entered into a Joint Venture agreement with BCL Limited (“BCL”), a major Botswana mining and smelting company owned by the Botswana Government and one of the world’s largest nickel-copper producers, Norilsk Nickel.

The agreement relates to the above three PL’s all currently under Retention Licence application and covers the three discoveries areas: Maibele North (nickel, copper and PGEs), Airstrip Copper (copper and silver) and Dibete (copper and silver).

The BCL agreement is subject to the Retention Licences being granted to BML.

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On granting of the Retention Licences, BCL will spend an initial US$4 million on a drilling program to earn 40% of the three Retention Licences.

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.

BML will retain a 30% interest after the BFS is completed, at which time the management of the projects will be transferred to BCL.

During the quarter BML continued to work with BCL in the general planning of exploration, logistics, management and administration in preparation of the Retention Licence being approved and when detailed policy and procedures under the JV will be implemented.

Proposed works within Retention Licence period (if granted).

If granted, the Retention Licence will allow BML and BCL to continue exploration and evaluation of the Maibele North- Ni +Cu project and the Airstrip & Dibete -Cu+Ag project within the three year Retention Licence period. The objective will be to complete a BFS on both projects utilising the processing and smelting plants at BCL’s Selebi Phikwe operations .

The initial exploration spend of $4M by BCL Limited will focus on aggressively drilling these two projects over the three discovery areas to increase the known resources. Additional mineral resources at both Maibele North and Airstrip-Dibete are critical to producing a viable project(s).

If this is achieved then BCL will fund the BFS and earn 70% of the projects along with having the rights to off-take ore at commercial rates.

The Joint Venture partnership makes sense as the BML discovery projects :

• Are only 55km from BCL’s nickel-copper mine, process plant and smelter.

• At Maibele North, the Ni + Cu + PGE mineralisation is similar to that being mined by BCL.

• BCL has established crushing, milling, flotation and smelter plants available that can in effect “toll treat” the J/V ore. This will significantly reduce any capital outlay in developing the project(s).

• BCL has the marketing and sales team in place with international client base to sell the final product. BCL will provide BML and the J/V with the expertise, logistics and access to plant and equipment.

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EXPLORATION ACTIVITIES BY Prospecting Licence (PL) in the March 2013 quarter.

PL59/2008 Shashe South:

Summary:

The recently completed mapping program shows that the Maibele North East Extension has the potential of NiCu-PGE’s mineralisation due to the presence of Ultramafics (Serpentinites) that are the principal host for Ni-CuPGE’s mineralisation in the Magogaphate area.

Soil sampling commenced in the area in the March 2013 quarter.

Details:

The area located on PL059/2008 to the north east of the Maibele North prospect is known as the Maibele North East Extension (refer Figure 1). Mapping was conducted over this area during the December 2012 and March 2013 quarters with the objectives of identifying different rock types and their distribution in the area and to produce a two dimensional representation of the geological units in the form of a geological fact map.

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Figure 1: Maibele North East Extension map in relation to the Maibele North prospect and Selebi-Phikwe.

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Mapping was done by following traverse lines striking North across a general strike of rock units at a spacing of 200 metres. Each locality, strike and dip of the rock units was recorded. Figure 2 shows a plan of the traverse lines that were followed while mapping.

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Figure 2: Plan of traverse lines overlaid on a Google Earth Image.

The spatial distribution of the rocks of the study area depicted in figure 3 shows an abundance of felsic gneisses. Intrusive bodies of mafic and ultrabasic rock types form lenses within felsic gneisses. It also shows dolerite and diorite dykes with a general trend of NE-SW.

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Figure 3: Maibele North East Extension Geological Fact Map.

The Geological Fact Map shows that the Maibele North East Extension has the potential of Ni-Cu-PGE’s mineralisation due to the presence of ultramafics (serpentinites) that are a host for Ni-Cu-PGE mineralisation in the Magogaphate area. Drainage sampling in the area previously indicated the presence of Ni-Cu-PGE mineralisation in the Maibele NE Extension area.

Soil sampling has commenced in the area. Should the soil sampling program show that there is significant soil geochemistry in the area, such an anomaly would be followed by an IP survey and possibly follow up by drilling.

The Geological Fact Map area also covers VTEM anomalies 11420-a and 11470-a which lie within an area of no outcrop along strike to the west of the major amphibolite and serpentinite bodies in the south east of Figure 3. The approximate position of the two VTEM anomalies is shown on Figure 3.

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PL46/2004 Sampowane & PL111/2011 Sampa Central

Summary:

T he mapping program conducted in the December 2012 and March 2013 quarters, concludes that several targets are recommended for further exploration based on their lithology and tectonic structure. The area mapped has been divided into seven separate targets for future soil sampling and trenching programs to test mineralisation presence and tenor of numerous gossans, EM conductors, fold closures and inferred faults.

These programs are expected to commence in the June 2013 quarter.

Details:

Mapping that commenced in the December 2012 quarter was completed during the March 2013 quarter. The area covered by this mapping program includes PL111/2011 Sampa Central and areas within PL46/2004 Sampowane that surround PL111/2011.

From the program it was determined that significant mineralisation may occur on or near contacts of mafic and ultramafic bodies as is the case with the Maibele North prospect. The outcrop exposure of the two rock contacts were observed at three locations and a gossan of approximately 5cm width was observed at one of these locations within the area mapped. the presence of gossan is seen as very positive and many mineralized lenses tend to pinch and swell over short distances.Several targets are recommended for further exploration based on their lithology and tectonic structure (see Figure 4).

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Figure 4: Sampowane and Sampa Central proposed targets map.

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Target 1

200m x 50m soil sampling is proposed in this area to target a small gossan and EM conductor picked up by the 1989 GEOTEM survey. Trenching is also proposed to test the extent and nature of gossans in this area.

Target 2

Soil sampling and trenching is proposed to test mineralisation along EM conductors and gossan rubble observed.

Target 3

Soil sampling is proposed to test anomalies along two EM conductors picked up by the GEOTEM survey and the inferred fault in this area.

Target 4

Soil sampling proposed will test the potential for mineralisation along faults inferred in this area.

Target 5

Soil sampling proposed will test the potential for mineralisation in fold closures of this area.

Target 6

A proposed soil sampling program will test the potential for for mineralisation along EM conductors, banded iron formation and a fold closure identified in this area.

Target 7

Soil sampling proposed will test for anomalies along an EM conductor picked up by the 1989 GEOTEM survey. Trenching is also proposed to test for mineralisation along mafic-ultramafic contact.

TENEMENT UPDATE:

The current status of tenure applications as at 31 March 2013 is:

• The Department of Mines (“DOM”) is yet to advise BML whether its Retention Licence applications over areas within PL110/94, PL111/94 and PL54/98 (all of which expired as PLs on 31 December 2012) have been granted. BML expects this decision to be received in the June 2013 quarter however there is no guarantee that the DOM will provide its advice in this time frame.

• The Company is awaiting confirmation from the Department of Geological Survey regarding the first renewal applications for PL360/2008 and PL158/2009.

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Figure 5: Current tenements held by BML including Retention Licence applications highlighted in red.

Pat Volpe Chairman

Competent Persons Statement

The information in this report that relates to Exploration Results is based on information compiled or reviewed by Mr Peter Temby, a member of The Australian Institute of Geoscientists.

Mr Temby has sufficient experience that is relevant to the style of mineralization 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.

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About Botswana Metals Limited

Botswana Metals Limited is listed on the Australian Securities Exchange (ASX) and its stock code (ticker) is BML. BML is a mineral exploration company fully focused on its portfolio of exploration tenements covering approximately 2,300 sq. km all located in Botswana.

BML’s objective is to discover an economic base and precious metals resource in eastern Botswana on the well-known Limpopo Belt which extends into Botswana from its neighbouring country Zimbabwe.

Recent exploration has resulted in three discoveries for Nickel-Copper and Copper-Silver known as Airstrip Copper, Maibele North and Dibete. The Ni-Cu deposit at Maibele North is just east of Airstrip Copper whilst Dibete is 7 km to the south of Airstrip Copper.

To the east of these discoveries, a recent VTEM program has identified at least 23 new anomalies that are planned to be part of the company’s exploration focus in 2013.

BML has solid logistical support and the projects benefit from excellent infrastructure. The Company is managed by experienced personnel who have many years’ experience in Botswana as well as other African countries. Botswana is considered to be one of the most advanced African countries in respect to its mining and exploration laws, and for safety and education where English is spoken freely.

BML has offices in Australia (Melbourne) and Botswana (at Francistown and Tobane).

About BCL Limited

BCL Limited (“BCL”) is a mining and smelting company owned by the Botswana Government (94%) and Norilsk Nickel (6%). The company commenced operations in 1959 and is now one of the largest private sector employers in Botswana.

BCL produces two types of finished matte containing nickel, copper and cobalt, and precious and platinum group metals to a smaller extent.

The Selebi Phikwe ore deposits are owned and operated by BCL Limited. The Selebi copper and nickel orebody was discovered in 1963, and higher grade ore was discovered at Phikwe in 1966. Mining of nickel-copper ore commenced in 1973 and since 1980, BCL’s smelter has operated at an annual production rate of approximately 50,000 tonnes of nickel-copper matte.

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10

Name of entity

BOTSWANA METALS LIMITED

ABN 96 122 995 073	Quarter ended (“current quarter”)
96 122 995 073	31 MARCH 2013

Consolidated statement of cash flows

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 (3 .months) $A’000
	- (91) - - (231) - 1 - - -	- (346) - - (689) - 12 - - -
	(321)	(1,023)
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)	- - (2) - - - - - -	- - (5) - - 33 - - -
	(2)	28
	(323)	(995)

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(323)	(995)
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	- - - - - -	(13) - - - - -
	-	(13)
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	(323) 762 (5)	(1,009) 1,447 (4)
	434	434

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
		125
		-
1.25	Explanation necessaryfor an understandingof the transactions
	During the quarter the following payments were made to Directors: Directors Fees Mr M Cellante $7,500 Dr P Woolrich $7,500 Total Directors Fees $15,000 Consulting Fees Mr P Volpe $82,500 Dr P Woolrich $27,125 Total Directors Fees $109,625 Superannuation contributions totalling $7,487 accrued from the prior quarter were also paid during the quarter on behalf of the Directors.

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

• See chapter 19 for defined terms.

Appendix 5B Page 2

17/12/2010

Appendix 5B Mining exploration entity quarterly report

• 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.

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

• 3.1 Loan facilities 3.2 Credit standby arrangements

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	$A’000
	75
	-
	-
	250
Total	325

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 (term deposits)	8	76
	265	524
	-	-
	161	161
Total: cash at end of quarter(item 1.22)	434	762

• See chapter 19 for defined terms.

17/12/2010 Appendix 5B Page 3

Appendix 5B Mining exploration entity quarterly report

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

• See chapter 19 for defined terms.

Appendix 5B Page 4

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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
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	188,135,317	188,135,317
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	116,275,143	116,275,143	Exercise price 10 cents	Expiry date 10 cents
7.11 Debentures (totals only)

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity quarterly report

7.12 Unsecured 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 5).

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

Sign here: ......... .............................. Date: .. 24 April 2013 ......... (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 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting 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 6

17/12/2010