template.rb

class Template
  def initialize(content)
    @content = content
  end

  def render(context)
    context = Hashie::Mash.new(context)
    
    @content.gsub(/(%{([^}]+)})/) do
      context[Regexp.last_match[2]]
    end
  end
end

Talking of the regex stuff, you can visualise regular expressions with rubular

http://www.rubular.com/r/YLwi7xPkZP

so you see each match matches 2 things, the whole text (%{blah}) and the just key (blah) which is what I wanted.