ZENITH MINERALS LIMITED — Capital/Financing Update 2012

Oct 29, 2012

EARAHEEDY RC DRILLING COMMENCED

Earaheedy Manganese (ZNC 100%)

Activities

Exploration/Development Mt Alexander Magnetite Iron Earaheedy Manganese

Details as at September 2012

Issued Shares 81.46 m Unlisted options 0.1 m Mkt. Cap. ($0.20) A$ 16.29 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

• RC drilling programme commenced today to follow up to high grade manganese drill intersections at shallow depth at the Red Lake Prospect

• 126 holes permitted with aim to define initial JORC resource based on drill results

• In the June quarter Zenith reported the first potential DSO manganese drill intersections in the Earaheedy Basin, including;

• ZRLRC013a, 5 metres @ 34.8% Mn from 22 metres

  • (including 3 metres @ 41% Mn)

ZRLRC024, 3 metres @ 30.7% Mn from 3 metres

(including 1 metre at 40.2% Mn)

• Potential identified for mineralisation to extend for over 3 kilometres within fault wedge.

• Commenced 15 October 2012

Major Shareholders

HSBC Custod. Nom. 13.88 % Giralia (Atlas Iron) 10.8% JP Morgan Nom. 3.67% Yandal Inv. PL 3.43% RJ Buckley 2.92%

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Figure 1: Location plan showing Zenith’s prospects in the Earaheedy Basin

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Zenith Minerals Limited (ASX-ZNC) is pleased to advise that follow-up reverse circulation (RC) drilling has commenced at the Company’s 100% owned new Red Lake manganese discovery in the Earaheedy Basin (Figure 1). The programme is aimed at infilling previous drill coverage (Figure 2), testing mineralisation along strike to the north-east, and completing an initial JORC resource estimate in the area of detailed drill coverage. A total of 126 drill sites have are fully permitted for programme flexibility (Figure 3).

First pass RC drilling of the target stratigraphy during the June 2012 quarter covered an area of 400 metres by 300 metres (Figure 2). This programme returned excellent results including the first drill intersections of potential DSO (direct shipping ore) grade manganese recorded in the Earaheedy Basin. Intersections included 3 metres @ 41% Mn within 5 metres @ 34.8% Mn in hole ZRLRC013a, and 1 metre at 40.2% Mn within 3 metres @ 30.7% Mn in hole ZRLRC024[*] .

The previous RC drilling was directed at outcrops of manganese oxide grading up to 47% Mn[**] . The manganese outcrops are located within a fault block interpreted from aeromagnetic data to be at a high angle to the shallow north east dipping basin stratigraphy. Prospective stratigraphy within the fault block has been mapped at surface for a further 1 km to the east, and the fault wedge is interpreted from aeromagnetics to extend for more than 3 km to the northeast (Figure 3).

The high grade manganese oxide was intersected at shallow depth within strongly weathered rocks. The drill intersections occur in a stratigraphic unit recognisable within the weathered zone and interpreted to be the product of supergene enrichment of a manganese carbonate precursor, as observed in Zenith’s drilling elsewhere in the Earaheedy Basin.

ASX 14 June 2012, *ASX 4 July 2011

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Figure. 2 Red Lake Prospect – manganese target drill hole locations and interpreted manganese horizon

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Figure 3. Proposed drilling plan for the Red Lake prospect

The drilling programme is planned to be completed during November, with the objective of completion of a resource estimate upon return of analytical results. Additional drilling and collection of bulk samples for further beneficiation testwork is planned for the first quarter of 2013.

Background Information on Earaheedy Manganese Project

In 2010 Zenith identified the Earaheedy Basin north of Wiluna in WA as a potential new manganese province with similarities to the giant Kalahari manganese field in South Africa. As first mover Zenith established a strong land position with tenements covering 75 strike km of prospective stratigraphy. Primary mineralisation comprises stratiform manganese carbonate and is associated with iron formations in adjacent stratigraphy. Zenith’s priority target is high grade (>40% Mn) manganese oxide formed by weathering or supergene upgrade of the primary carbonate.

In late 2010[*] Zenith completed the first ever drilling for manganese in the western Earaheedy at the Lockeridge Prospect, intersecting a shallow dipping bed of manganese mineralisation averaging 10m thickness and extending from surface to 1.2km down dip and along strike for 1.6 km. It is not laterally limited by drilling to date. Lockeridge drilling intersections included:

ZTRC014 12m @ 11.1% Mn from 28m depth ZTRC017 3m @ 18.0% Mn from 37m depth

In late 2011[**] Zenith completed an RC drilling program at the Black and Blue prospect which returned thick manganese oxide intersections including:

ZBRC006 31m @ 7.9% Mn from surface incl. 2m @ 17.1 %Mn, 1m @ 22% Mn & 3m @ 14.3 %Mn

In 2012[#] Zenith reported the first DSO grade Mn drill intersections recorded in the Earaheedy Basin at the Red Lake prospect. Manganese oxide intersections included;

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ZRLRC013a 3m @ 41% Mn (within 5m @ 34.8% Mn from 22m depth) ZRLRC024 1m @ 40.2% Mn (within 3m @ 30.7% Mn from 3m depth)

Preliminary dry screening beneficiation testwork[@] has returned positive results on lower grade (sub-DSO) manganese mineralised samples from RC drill holes at Red Lake, with the combined coarser (+1.6mm) fraction of all the 11 test samples averaging 38.1% Mn in comparison to an original averaged head grade of 26.9% Mn, establishing potential for very simple and low cost beneficiation to produce a material grade improvement.

The Earaheedy project also includes a 30 km long zone of carbonate-hosted zinc (Zn) and lead (Pb) mineralisation in the Yelma Formation at the base of the Earaheedy Basin stratigraphy. Broadly spaced drilling by RGC Exploration from 1992 to 1996 defined several prospects containing drill intersections of oxidised and primary Zn-Pb mineralisation, including;

Navajoh: 7.3 m @ 6.1 % Zn, 0.77% Pb (incl. 3.3 m @ 11.2% Zn, and 0.93% Pb) Magazine: 5 m @ 5.6% Zn +Pb (incl. 2 m @ 8.2% Zn, 2.8% Pb) Chinook: 6 metres @ 3.63% Pb +Zn.

ASX 25 October 2010;[*] ASX 16 December 2011;[#] ASX 14 June 2012,[@] 30 October 2012

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Managing Director

Zenith Minerals Limited

30[th] October 2012

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

The information in this report that relates to Exploration Results is based on information compiled by Neil Martin, who is a Member of the Australian Institute of Geoscientists. Mr Martin 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 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Martin consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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