ZENITH MINERALS LIMITED — Capital/Financing Update 2012

Oct 29, 2012

NON-RENOUNCEABLE RIGHTS ISSUE

Highlights

• 1 for 6 rights issue to raise $2.04 million before costs

Activities

• Funds to be used for exploration, drilling, evaluation and development studies at Zenith’s 100% owned Earaheedy Manganese and Mount Alexander Iron Projects, and general working capital

Exploration/Development Mt Alexander Magnetite Iron Earaheedy Manganese

Details Issued Shares 81.45 m Unlisted options 0.1 m Mkt. Cap. ($0.22) A$ 17.9 m Cash Sept 2012 A$ 1.065 m Debt Nil Directors Gary Comb Chairman Neil Martin* Managing Director Stan Macdonald Non Exec Director Mike Joyce Non Exec Director

• Commenced 15 October 2012

Zenith Minerals Limited ( “Zenith” or “the Company” ) is pleased to announce a non ‐ renounceable rights issue to raise up to approximately $2.04 million (before issue costs) ( “Rights Issue” ).

The Rights Issue will be offered on the basis of one (1) new share for every six (6) shares held at the record date, at an application price of $0.15 per new share. The Company will apply for quotation of the new shares on ASX.

The Rights Issue is being partially underwritten (at no fee) by two of the Company’s Directors, Mr Rodney Michael Joyce and Mr Gary Comb.

The Company expects the Rights Issue to be conducted in accordance with the following timetable:

Major Shareholders

Major Shareholders
HSBC Custod. Nom.	13.9 %
Giralia (Atlas Iron)	10.8%
JP Morgan Nom.	3.7%
Yandal Inv. PL	3.4%

New Shares are quoted on an “ex” basis (the “Ex” date)	2 November 2012
Record Date to determine entitlement to New Shares	9 November 2012
Despatch prospectus and entitlement and acceptance	15 November 2012
forms to Eligible Shareholders and announce despatch
has been completed
Offer opens for receipt of applications	15 November 2012
Acceptances close at 5pm (WST)	29 November 2012
New Shares quoted on a deferred settlement basis	30 November 2012
Notify ASX of under subscriptions	4 December 2012
Despatch date of holding statements, New Shares	7 December 2012
entered into the holders’ security holdings
Trading commences for New Shares on a normal basis	10 December 2012

The above dates are indicative only. The Company reserves the right to vary the above dates, subject to the ASX Listing Rules and Corporations Act.

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Use of Funds

The Company intends to apply the proceeds from the Rights Issue (together with the Company’s existing cash reserves) towards:

• exploration, resource drilling, evaluation and development studies at the Company’s wholly owned Earaheedy Manganese Project, where drilling has just commenced at the new Red Lake discovery, and the Mount Alexander Iron Project;

• working capital and administrative expenses – including corporate and administrative expenses; and

• expenses of the Offer – including printing, legal and lodgement costs.

Following the Rights Issue, if the issue is fully subscribed, and no options are exercised prior to the record date, Zenith will have approximately 95 million shares on issue.

The Prospectus relating to this Rights Issue has been lodged with ASIC and will be announced shortly to ASX. It will be available on the ASX website and also on the Company’s website www.zenithminerals.com.au. An Appendix 3B is attached to this release.

Zenith Minerals Limited

30[th] October 2012

For further information contact: Neil Martin Managing Director 08 9226 1110

2

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12

Name of entity

ZENITH MINERALS LIMITED

ABN

96 119 397 938

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Fully paid ordinary shares
	13,575,896
	Fully paid ordinary shares

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

4 Do the+securities rank equally in all respects from the date of allotment with an existing+class of quoted+securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A	Yes
	$0.15 per share
	The funds raised will be used to continue exploration, evaluation and development studies at the Company’s 100% owned Earaheedy manganese and Mount Alexander iron ore projects, and to provide working capital
	No
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 2

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Appendix 3B New issue announcement

6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of securities issued under an exception in rule 7.2 6g If securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the issue date and both values. Include the source of the VWAP calculation. 6h If securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 Dates of entering+securities into uncertificated holdings or despatch of certificates 8 Number and +class of all +securities quoted on ASX (_including_the securities in section 2 if applicable)	N/A
	N/A
	N/A
	N/A
	N/A
	7 December 2012
	Number	+Class
	95,031,274	Fully paid ordinary shares

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Number +Class 9 Number and +class of all 100,000 Options expiring +securities not quoted on ASX 31 December 2013 ( including the securities in section exercisable at $0.14 2 if applicable) 10 Dividend policy (in the case of a Same as for other shares (no dividend policy) trust, distribution policy) on the increased capital (interests)

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has+security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations	No
	Non-renounceable
	1 New Share for every 6 Existing Shares
	Fully paid ordinary shares
	9 November 2012
	No
	Rounded up to the nearest whole number
	United States
	29 November 2012

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do+security holders sell their entitlements_in full_through a broker? 31 How do+security holders sell_part_ of their entitlements through a broker and accept for the balance?	The issue is severally and partially underwritten by two directors, Messrs Gary Comb and Rodney Joyce up to an aggregate amount of $402,750, for a total of 2,685,000 New Shares.
	Nil
	N/A
	N/A
	N/A
	N/A
	15 November 2012
	30 October 2012
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

01/08/2012

Appendix 3B Page 5

Appendix 3B New issue announcement

32 How do[+] security holders dispose N/A of their entitlements (except by sale through a broker)? 33 +Despatch date 7 December 2012

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of securities ( tick one )

(a) � Securities described in Part 1

(b)[All other securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities – NOT APPLICABLE

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

Appendix 3B Page 6

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Appendix 3B New issue announcement

Entities that have ticked box 34(b)

38 Number of securities for which N/A +quotation is sought 39 Class of +securities for which N/A quotation is sought 40 Do the[+] securities rank equally in all N/A respects from the date of allotment with an existing[+] class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation N/A now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security) Number +Class 42 Number and[+] class of all[+] securities N/A quoted on ASX ( including the securities in clause 38)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: .... Date: 30 October 2012 ~~Director~~ /Company secretary

Print name: Alex Dermedgoglou

== == == == ==

• See chapter 19 for defined terms.

Appendix 3B Page 8

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Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for[+] eligible entities – NOT APPLICABLE

Introduced 01/08/12

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

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Insert number of fully paid ordinary
securities on issue 12 months before date
of issue or agreement to issue
Add the following:
• Number of fully paid ordinary securities
issued in that 12 month period under an
exception in rule 7.2
• Number of fully paid ordinary securities
issued in that 12 month period with
shareholder approval
• Number of partly paid ordinary
securities that became fully paid in that
12 month period
Note:
• Include only ordinary securities here –
other classes of equity securities cannot
be added
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
Subtract the number of fully paid ordinary
securities cancelled during that 12 month
period
“A”
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”

“B” 0.15 [Note: this value cannot be changed] Multiply “A” by 0.15 Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used Insert number of equity securities issued or agreed to be issued in that 12 month period not counting those issued: • Under an exception in rule 7.2

• Under rule 7.1A • With security holder approval under rule 7.1 or rule 7.4

• Note: • This applies to equity securities, unless specifically excluded – not just ordinary securities

• • Include here (if applicable ) the securities the subject of the Appendix 3B to which this form is annexed

• • It may be useful to set out issues of securities on different dates as separate line items

• “C”

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1 “A” x 0.15 Note: number must be same as shown in Step 2 Subtract “C” Note: number must be same as shown in Step 3 Total [“A” x 0.15] – “C” [Note: this is the remaining placement capacity under rule 7.1]

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Part 2

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Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement
capacity is calculated
“A”
Note: number must be same as shown in
Step 1 of Part 1
Step 2: Calculate 10% of “A”
“D” 0.10
Note: this value cannot be changed
Multiply “A” by 0.10
Step 3: Calculate “E”, the amount of placement capacity under rule
7.1A that has already been used
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Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used Insert number of equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes:

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• This applies to equity securities – not
just ordinary securities
• Include here – if applicable – the
securities the subject of the Appendix
3B to which this form is annexed
• Do not include equity securities issued
under rule 7.1 (they must be dealt with
in Part 1), or for which specific security
holder approval has been obtained
• It may be useful to set out issues of
securities on different dates as separate
line items
“E”
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

“A” x 0.10 Note: number must be same as shown in Step 2 Subtract “E” Note: number must be same as shown in Step 3 Total [“A” x 0.10] – “E” Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

Appendix 3B Page 12

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