LCL RESOURCES LIMITED - AGM Information 2011

==> picture [219 x 37] intentionally omitted <==

Level 6 122 Walker St North Sydney NSW 2060 Australia T +61 (0)2 9460 1856 F +61 (0)2 9460 1857

ASX ANNOUNCEMENT

Notice of Annual General Meeting

28 April 2011

The Annual General Meeting of shareholders for the six month period ended 31 December 2010 will be held at 10.00am on 30 May 2011 at Level 14, 131 Macquarie Street, Sydney, Australia.

A copy of the Notice of Meeting and Report to Shareholders for the six months ending 31 December 2010 (refer attached) is also available on the Company’s website:

http://www.metminco.com.au/index.cfm/page/Reports.

==> picture [89 x 55] intentionally omitted <==

William Howe Managing Director

About Metminco:

Metminco is a dual ASX and AIM listed company with a portfolio of copper and gold projects in Peru and Chile. The Los Calatos project located in southern Peru has JORC compliant resources of 926 million tonnes, consisting of Indicated Resources of 111 million tonnes at 0.39% Cu and 380ppm Mo and Inferred Resources of 815 million tonnes at 0.37% Cu and 260ppm Mo (at a 0.2% copper cut-off grade).

The Chilean assets include a 100% interest in the Mollacas copper leach project with JORC compliant resources of 17 million tonnes consisting of Indicated Resources of 7.2 million tonnes at 0.56% copper and Inferred Resources of 9.8 million tonnes @ 0.52% copper (at a 0.2% copper cut-off grade); and a 50% interest in the Vallecillo gold zinc project with JORC compliant resources of 10.1 million tonnes consisting of Indicated Resources of 7.9 million tonnes @ 1.14g/tAu; 11.4g/tAg; 1.32% Zn; 0.29% Pb and Inferred Resources of 2.2 million tonnes @ 0.78g/t Au; 8.2g/t Ag; 0.58% Zn; 0.26% Pb (at a cut-off grade of 0.3g/t Au).

Cut off grade of 0.2% Cu. Copper equivalence (CuEq), in-situ, assumes a ratio of Mo/Cu prices of 5.

For further information please contact:

South America :

William Howe - Managing Director

Ph: +56 (2) 411 2600

Australia:

William Etheridge – Executive Director Phillip Wing – Executive Director Philip Killen - Company Secretary & CFO

Ph: + 61(0) 419 400 919 Ph: + 61(0) 412 254 704 Ph: + 61(0) 408 609 916

Broker – BGF Equities Warwick Grigor Marcus Freeman

Ian Howarth (Collins St Media)

Ph: + 61(0) 2 9263 2700 Ph: + 61 (0) 3 8688 9100 Ph: + 61(0) 407 822 319

United Kingdom:

Tim Read – Director

Ph:+44 (0) 7770721809

Nomad and Broker – Investec Bank plc Stephen Cooper Patrick Robb

Ph: +44 (0)20 7597 5000

Tim Thompson (Buchanan Communications)

Ph:+44 (0) 20 7466 5000

==> picture [114 x 61] intentionally omitted <==

==> picture [150 x 65] intentionally omitted <==

==> picture [63 x 63] intentionally omitted <==

MetMinco LiMited

ACN 119 759 349

notice oF AnnUAL GeneRAL MeetinG And

eXPLAnAtoRY MeMoRAndUM

TO ASSIST SHAREHOLDERS IN THEIR CONSIDERATION OF RESOLUTIONS TO BE PUT AT THE ANNUAL GENERAL MEETING OF THE COMPANY TO BE HELD AT LEVEL 14, 131 MACQUARIE STREET, SYDNEY ON MONDAY 30 MAY 2011 AT 10.00 AM

THIS DOCUMENT IS IMPORTANT

This Notice of Meeting and Explanatory Memorandum shouId be read in their entirety. If you do not understand these documents or are in any doubt as to how to deal with them, you should consult your stockbroker, solicitor, accountant or other professional adviser immediately.

Level 6, 122 Walker Street, North Sydney NSW 2060 Tel: +61 2 9460 1856 Fax: +61 2 9460 1857 email: [email protected] www.metminco.com.au

Annual General Meeting 30 May 2011 1

MetMinco LiMited ACN 119 759 349 ( Metminco or Company )

notice oF AnnUAL GeneRAL MeetinG for the period ended 31 december 2010

Notice is hereby given that an Annual General Meeting of the members of the Company will be held at: Location Level 14, 131 Macquarie Street Sydney, NSW, 2000 Date Monday 30 May 2011

Time 10.00 am Sydney time

The Explanatory Memorandum accompanying this Notice provides additional information on matters to be considered at the Annual General Meeting. The Explanatory Memorandum forms part of this Notice and should be read in conjunction with it. Shareholders are specifically referred to the Glossary in the Explanatory Memorandum which contains definitions of capitalised terms used in this Notice and the Explanatory Memorandum.

AgENDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 VOTING ExCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 APPOINTMENT OF PROxIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 ExpLANATOry MEMOrANDuM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 IMPORTANT NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 FORWARD LOOkING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Resolution 1 – Adoption of Remuneration Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Resolution 2 – Re-election of Antonio Ortuzar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Resolution 3 – Ratification of prior share issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Resolution 4 – Ratification of prior share issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Resolution 5 – Ratification of prior share issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Resolution 6 – Approval for the issue of Shares to sophisticated and institutional investors . . . . . . . . . . . . . . . . . . . 9 GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

2 METMINCO LIMITED ACN 119 759 349

AGendA

ORDINARY BUSINESS

1 Discussion of Financial Statements and reports

To receive and consider the Financial Report, the Directors’ Report and Auditor’s Report for the six months ended 31 December 2010.

Metminco’s Financial Report, Directors’ Report and Auditor’s Report contained in the Report to Shareholders – December 2010 are placed before the meeting giving Shareholders an opportunity to discuss those documents and to ask questions. The auditor will be attending the Annual General Meeting and will be available to answer any questions relevant to the conduct of the audit and report.

2 resolutions

To consider and, if thought fit, pass the following as ordinary resolutions of the Company:

Resolution 1 –	“That the Remuneration Report for the period ended 31 December 2010 be
To adopt the Remuneration	adopted.”
Report for the period	_Note:_The vote on this resolution is advisory only and does not bind the Directors or the
ended 31 December 2010	Company.
Resolution 2 –	“That, for the purpose of clause 15.6 of the Constitution and for all other purposes,
Re-election of Antonio	Antonio Vicuña Ortuzar, a Director appointed 16 March 2011 retires, and being
Vicuña Ortuzar	eligible, is re-elected as a Director.”
Resolution 3 –	“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders
Ratifcation of prior share	approve and ratify the prior allotment and issue of 75,000,000 Shares in the
issues	Company on the terms and conditions set out in the Explanatory Memorandum
	accompanying this Notice.”
Resolution 4 –	“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders
Ratifcation of prior share	approve and ratify the prior allotment and issue of 70,250,855 Shares in the
issues	Company on the terms and conditions set out in the Explanatory Memorandum
	accompanying this Notice.”
Resolution 5 –	“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders
Ratifcation of prior share	approve and ratify the prior allotment and issue of a total of 20,000,000 Shares in
issues	the Company on the terms and conditions set out in the Explanatory Memorandum
	accompanying this Notice.”
Resolution 6 –	“That, for the purposes of Listing Rule 7.1 and for all other purposes, the issue of
Approval for the issue	60,000,000 new fully paid ordinary Shares at a subscription price of A$0.38 per
of 60,000,000 Shares to	Share to selected sophisticated and institutional investors on the basis set out in the
selected sophisticated and	Explanatory Memorandum is approved.”
institutional investors to
raise A$22.8 million

Annual General Meeting 30 May 2011 3

AGendA continued

VOTINg ExClUSION

The Company will disregard any votes cast on the resolutions as follows:

Resolution	3	The Company will disregard any votes cast on this Resolution 3 by any person who has
		participated in the issue of securities identifed in this resolution or any associate of such a person.
Resolution	4	The Company will disregard any votes cast on this Resolution 4 by any person who has
		participated in the issue of securities identifed in this resolution or any associate of such a person.
Resolution	5	The Company will disregard any votes cast on this Resolution 5 by any person who has
		participated in the issue of securities identifed in this resolution or any associate of such a person.
Resolution	6	The Company will disregard any votes cast on this Resolution 6 by any person who may
		participate in the proposed issue of securities identifed in this resolution or any person who
		might obtain a beneft, except a beneft solely in the capacity of a Shareholder, from the issue of
		securities identifed in this resolution if the resolution is passed or any associate of such a person.

However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

It has been determined that persons entitled to attend and vote at the General Meeting are those persons who are registered Shareholders of the Company at 10:00 am (Sydney time) on Saturday 28 May 2011. Accordingly, share transfers registered after that time will be disregarded in determining entitlement to attend and vote at the General Meeting.

APPOINTMENT Of PROxIES

A member entitled to attend and vote at the Annual General Meeting may appoint an individual or a body corporate as a proxy to attend the meeting and on a poll vote on the member’s behalf. A proxy need not be a member of the Company.

A member entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. The enclosed proxy form provides further details on proxies and lodging proxy forms.

If a member appoints the Chairman of the meeting as the member’s proxy and does not specify how the Chairman is to vote on an item of business, the Chairman will vote, as proxy for that member, in favour of that item on a poll.

Dated 28 April 2011 By order of the Board

Philip killen Company Secretary

Questions

If you have any questions about any matter contained in the Notice of Annual General Meeting, please contact the Company Secretary, Philip killen, on 0408 609 916 or at [email protected].

4 METMINCO LIMITED ACN 119 759 349

eXPLAnAtoRY MeMoRAndUM

IMPORTANT NOTICE

This Explanatory Memorandum is an explanation of, and contains information about, the Resolutions to be considered at the Annual General Meeting, which are set out in the accompanying Notice of Meeting dated 28 April 2011 (Notice), to assist Shareholders in determining how they wish to vote on the resolutions.

This Explanatory Memorandum forms part of the accompanying Notice and should be read together with the Notice.

If you are in doubt about what to do in relation to the resolutions contemplated in this Explanatory Memorandum, you should consult your financial or other professional advisor.

This Explanatory Memorandum is dated 28 April 2011.

Capitalised terms used in this Explanatory Memorandum have the meaning given to them in the Glossary attached to this Explanatory Memorandum.

fORWARD lOOKINg STATEMENTS

Certain statements in this Explanatory Memorandum relate to the future.

These statements reflect views only as of the date of this Explanatory Memorandum.

While Metminco believes that the expectations reflected in the forward looking statements are reasonable, neither Metminco nor any other person gives any representation, assurance, or guarantee that the occurrence of an event expressed or implied in any forward looking statements in this Explanatory Memorandum will actually occur.

Resolution 1 – Adoption of Remuneration Report

Shareholders at the Annual General Meeting will be given the opportunity to comment on and ask questions about the Remuneration Report. The Remuneration Report is available in the Directors’ Report section of the Report to Shareholders dated 31 December 2010.

The vote on this resolution is advisory only and will not bind the Directors or the Company. However, the Board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of the Company.

A reasonable opportunity will be provided for discussion of the Remuneration Report at the meeting.

The Chairman of the meeting intends to vote undirected proxies in favour of the adoption of the Remuneration Report. The Directors recommend that Shareholders vote in favour of Resolution 1.

Resolution 2 – Re-election of Antonio Ortuzar

Pursuant to clause 15.6(a) of the Constitution, the Directors may at any time appoint a person to be a director, either to fill a casual vacancy or as an addition to the existing Directors. Any Director so appointed holds office only until the next following annual general meeting and is then eligible for re-election in accordance with clause 15.6(b) of the Constitution.

Listing Rule 14.4 states that a director appointed to fill a casual vacancy or as an addition to the board must not hold office (without re-election) past the next annual general meeting of the Company.

Antonio Ortuzar was appointed by the Board as a Director on 16 March 2011 and retires in accordance with the Company’s Constitution and the Listing Rules and, being eligible for re-election, offers himself for re-election at the Annual General Meeting.

Antonio Ortuzar ’s experience and qualifications are set out in the Report to Shareholders.

The Directors (other than Antonio Ortuzar) recommend that Shareholders vote in favour of Resolution 2.

Annual General Meeting 30 May 2011 5

eXPLAnAtoRY MeMoRAndUM continued

Resolution 3 – Ratification of prior share issues

Resolution 3 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of 75,000,000 Shares to the Barrick Group.

Background

On 21 April 2011, the Metminco Group entered into an agreement with Placer Dome Peru (a member of the Barrick Group) under which Placer Dome Peru surrendered a right to purchase a 51% interest in Minera CN SAC subject to certain conditions in exchange for 75,000,000 Shares.

Minera CN SAC is a wholly owned subsidiary of the Metminco Group and owner of the Alpha, Nelson and Gamma tenements which form part of the Los Calatos Project. In July 2010, Metminco announced upgraded JORC Compliant Resources at Los Calatos of 926 million tonnes, consisting of Indicated Resources of 111 million tonnes at 0.39% Cu and 380 ppm Mo and Inferred Resources of 815 million tonnes at 0.37% Cu and 260 ppm Mo (at a 0.2% copper cut-off grade).

In accordance with an agreement entered into on 28 November 2006 between Placer Dome Peru and Cerro Norte, Placer Dome Peru held a one off right to purchase 51% of Minera CN SAC for consideration of 200% of exploration and other expenditure incurred, if at any time, economic resources of more than 2 million ounces of gold and/or more than 1 million tons of fine copper were converted into provable and/or probable reserves by a scoping study or by a feasibility study (Buy Back Right).

Transaction

This transaction is beneficial to Shareholders as it removes the risk of the Buy Back Right being triggered at some time in the future, which if exercised would result in the Barrick Group acquiring a 51% controlling interest in the Los Calatos Project. The purchase price on exercise of the Buy Back Right may have been significantly lower than a resources based market value, and exercise of the Buy Back Right by Placer Dome Peru would have resulted in considerable complexity and uncertainty surrounding the future development timetable of the Los Calatos Project.

Listing Rule 7.1 prohibits (subject to certain exceptions) Metminco from issuing or agreeing to issue new securities representing more than 15% of its total issued ordinary shares during the following 12 month period, without shareholder approval. However, an issue of shares may be approved retrospectively in accordance with Listing Rule 7.4.

Listing Rule 7.4 provides that an issue of securities is deemed to have been made with shareholder approval if Listing Rule 7.1 is not breached at the time the securities were issued and shareholders subsequently approve the issue.

By Shareholders ratifying the prior issue of securities, the Company is given flexibility to issue further securities up to the 15% limit over the next 12 month period. Once the issue of 75,000,000 Shares is ratified, these securities will not be counted as a new issue for the purposes of the 15% limit set out in Listing Rule 7.1.

Listing Rule 7.5 requires that the following information be provided to Shareholders in respect of Resolution 3 for the purposes of Listing Rule 7.4:

a) The number of securities allotted: 75,000,000 Shares;
b) Issue price: The issue price was A$ 0.395 per Share based on the VWAP on 20 April 2011;
c) The terms of the securities: The Shares rank equally with the existing Shares on issue;
d) Allottee: The Shares were allotted to Barrick Gold Corporation under sections 708(11) of the Corporations Act. The 75,000,000 Shares were issued to the member on 28 April 2011;
e) Use or intended use of funds raised: The purpose of the issue of the 75,000,000 Shares to Barrick Gold Corporation was as consideration for Placer Dome Peru surrendering the Buy Back Right;
f) Voting exclusion statement: The Company will disregard any votes cast on this Resolution 3 by Barrick Gold Corporation or any associate of Barrick Gold Corporation.

However, the Company need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

The Board unanimously recommends that eligible Shareholders vote in favour of Resolution 3.

6 METMINCO LIMITED ACN 119 759 349

Resolution 4 – Ratification of prior share issues

Resolution 4 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of a total of 70,250,855 Shares to Inversiones Em Dos Limitada (Em Dos), a private Chilean company, as part of the consideration payable by the Company for the purchase of a 50% interest in Sociedad Contractual Minera Ovalle (SCM Ovalle).

Background

SCM Ovalle owns the Mollacas copper leach project, the Vallecillo gold-zinc project and the Loica project located in Region IV in central Chile, approximately 450km north of Santiago.

On 21 April 2011, Metminco acquired 50% of SCM Ovalle from Em Dos for $US 35 million paid as follows:

a) US$25,000,000 settled by the issue and allotment of 70,250,855 Shares at an issue price of 90% of the VWAP-US$-30 days calculated on 20 April 2011; and
b) US$10,000,000 in cash.

Under the MN Agreement, Hampton having satisfied all required conditions including exploration works, earned a 50% interest in the MN Projects (Mollacas, Vallecillo and Loica projects).

In accordance with the MN Agreement, Hampton and Em Dos formed SCM Ovalle in September 2007 as a jointly owned company with 100% ownership of the MN Projects.

Transaction

This transaction is beneficial to Shareholders in that an independent valuation of 50% of SCM Ovalle, based on current commodity prices, is in excess of the purchase price paid for the 50% of SCM Ovalle. This is before taking into account the potential exploration upside, particularly at the Vallecillo Project.

In addition, the MN Agreement contemplated that Hampton would exercise its right to increase its ownership of SCM Ovalle to 75% and as such there was some complexity surrounding the form and timing of the contributions by the parties going forward which has now been resolved.

The Company now has 100% of SCM Ovalle and as such is able to advance the MN Projects with Shareholders receiving 100% of the value generated by this advancement.

A summary of the MN Projects follows:

Mollacas

The Mollacas Project has JORC compliant Indicated Resources of 7.2 million tonnes at 0.56% copper and Inferred Resources of 9.8 million tonnes @ 0.52% copper, for total copper resources of 17 million tonnes. A scoping study undertaken by SRk Consulting, Chile, in 2008 estimated that current resources at Mollacas could be mined over a 7 year mine life producing approximately 13,500 tonnes pa copper in cathode at a unit operating cost of approximately US$0.91 per lb. At copper prices of US$2.50/lb the Net Present Value of the project is US$103 million (discounted at 8% pa) with an Internal Rate of Return of 70%.

In late 2008, Hampton completed a 3,970 metre infill drilling program which provided material for detailed leach testing. Column testing on oxide and supergene ores from the Mollacas Project was completed with recoveries expected to average 80% for all ore types. The metallurgical test work will provide information for leaching and solvent extraction/ electrowinning design as part of a final feasibility study.

Vallecillo

The Vallecillo Project, which covers an area of approximately 200 sq kms, is a copper-gold porphyry system and associated breccia zones. The La Colorada breccia ore is a gold-zinc-lead-silver system with existing JORC Compliant resources and significant exploration potential. It is located in central Chile at moderate elevation (2,100 metres) with good access and near to infrastructure, power and water.

SRk Consulting, Chile completed a Resource Estimation for the La Colorada Au-Zn-Ag-Pb deposit at Vallecillo in late 2009 based on drilling in 2006 and 2008 of a total of 29 holes totalling 8,490 metres. Contained metal increased by approximately 40% on the previous estimate completed in 2006. At a cut-off grade of 0.3g/t Au, total resources are estimated as 10.1 million tonnes and can be broken down into;

Indicated Resources: 7.9 million tonnes @ 1.14 g/t Au; 11.4 g/t Ag; 1.32% Zn; 0.29% Pb
Inferred Resources: 2.2 million tonnes @ 0.78 g/t Au; 8.2 g/t Ag; 0.58% Zn; 0.26% Pb

Preliminary metallurgical testwork completed in early 2010 indicates a gold recovery on site of approximately 93% into Dore bullion, via gravity and leaching of concentrates, and recovery of more than 90% zinc into a zinc concentrate averaging approximately 54% zinc.

Surface mapping and geochemical sampling has identified seven targets, four polymetallic targets (Au/Zn/Pb/Ag) with potential to expand the existing La Colorada Au-Zn resources, two Au-Cu porphyry targets and one epithermal Au mineralisation target.

Annual General Meeting 30 May 2011 7

eXPLAnAtoRY MeMoRAndUM continued

Loica Project

The Loica Project, covering approximately 35 sq kms, is a Cu-Mo porphyry system, approximately 4km long striking north south. Drilling by Hampton on the upper part of the Loica system in 2007 intersected long widths of lower grade Cu-Mo mineralisation. Further exploration using geochemical sampling, geophysics and drilling is warranted on the project.

By Shareholders approving the prior issue of securities, the Company is given flexibility to issue further securities up to the 15% limit over the next 12 month period. Once the issue of the Shares is approved, the Shares will not be counted as a new issue for the purposes of the 15% limit set out in Listing Rule 7.1.

Listing Rule 7.5 requires that the following information be provided to Shareholders in respect of Resolution 4 for the purposes of Listing Rule 7.4:

a) The number of securities allotted: 70,250,855 Shares;
b) Issue price: The issue price was US$ 0.36 (A$0.35) per Share based on the VWAP – US$ - 30 days on 20 April 2011
c) Terms of the securities: The Shares rank equally with the existing Shares on issue;
d) Allottee: The Shares were allotted to Em Dos. The Shares were issued on 28 April 2011; and
e) Use or intended use of funds raised: The purpose of the issue of the 70,250,855 Shares to Em Dos was as part of the consideration payable by the Metminco Group for the purchase of a 50% interest in SCM Ovalle; and
f) Voting exclusion statement: The Company will disregard any votes cast on this Resolution 4 by Em Dos or any associate of Em Dos.

However, the Company need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

The Board unanimously recommends that eligible Shareholders vote in favour of Resolution 4.

8 METMINCO LIMITED ACN 119 759 349

Resolution 5 – Ratification of prior share issues

Resolution 5 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of a total of 20,000,000 Shares.

By Shareholders ratifying the prior issue of securities, the Company is given flexibility to issue further securities up to the 15% limit over the next 12 month period. Once the issue of 20,000,000 Shares is ratified, these securities will not be counted as a new issue for the purposes of the 15% limit set out in Listing Rule 7.1.

Listing Rule 7.5 requires that the following information be provided to Shareholders in respect of Resolution 5 for the purposes of Listing Rule 7.4:

a) The number of securities allotted: 20,000,000 Shares;
b) Issue price: The issue price was A$0.38 per Share;
c) Terms of the securities: The Shares rank equally with the existing Shares on issue;
d) Allottee: The Shares were allotted primarily to selected institutional investors under sections 708(8) or 708(11) of the Corporations Act. The Shares were issued on 28 April 2011;
e) Use or intended use of funds raised: The purpose of the issue of the Shares was to raise A$ 7.6 million, a significant part of the funds required to make the payment of US$10 million to Em Dos for the purchase of a 50% interest in SCM Ovalle (Refer Resolution 4); and
f) Voting exclusion statement: The Company will disregard any votes cast on this Resolution 5 by any person who has participated in the issue of securities identified in this resolution or any associate of such a person.
However, the Company need not disregard a vote if:
it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

The Board unanimously recommends that eligible Shareholders vote in favour of Resolution 5.

Resolution 6 – Approval for the issue of 60,000,000 Shares to selected sophisticated and institutional investors to raise A$22.8 million

The Company proposes to issue 60,000,000 Shares at an issue price of A$ 0.38 per Share to raise A$ 22.8 million by a placement of Shares to institutional and professional investors.

The Company has entered into subscription agreements with a number of institutional and professional investors who have committed to subscribe for a total of 60,000,000 Shares at an issue price of $A0.38 per Share , subject to Shareholder approval.

Advantages of supporting resolution 6

1. Advantages of approving the placement of A$22.8 million

The placement of 60,000,000 Shares to raise approximately A$ 22.8 million in accordance with Resolution 6 would enable Metminco to fund a more aggressive drilling program at the Los Calatos Project and advance its Chilean assets, in particular Mollacas and Vallecillo projects.

2. Broader Shareholder base with increased financial capacity

The placement of 60,000,000 Shares is to selected institutional and professional investors in Australia, Asia, Chile and the United kingdom, and broadens the Shareholder base of Metminco as well as introduces additional “corner stone” investors which may result in increased market interest in Metminco and market support for Metminco. This wider pool of Shareholders and market exposure may also increase Metminco’s capability to obtain future equity funding to progress development of the Company’s interests adding Shareholder value.

4. In line with Metminco’s strategic direction

The removal of the Buy Back Right and acquisition of 100% of SCM Ovalle (and with it the Mollacas and Vallecillo projects) is another milestone in Metminco’s strategic direction which commenced in December 2008 when Metminco made an offer to acquire 100% of the issued share capital of Hampton.

Now that the Los Calatos, Mollacas and Valllecillo projects are 100% owned and the risk of the Buy Back Right removed, the Company seeks Shareholder approval to raise funds to advance these projects with a view to increasing Shareholder wealth.

Annual General Meeting 30 May 2011 9

eXPLAnAtoRY MeMoRAndUM continued

Disadvantages of Supporting the resolutions

Shareholders are advised that they should balance the reasons to support the Resolutions against the potential disadvantages of supporting the Resolutions.

The risks to Shareholders and disadvantages of approving Resolution 6 include:

1. Dilution

If Resolution 6 is approved then existing Shareholders would be diluted by approximately 4.1%.

2. Issue Price of Placement may be at a Discount

It is proposed that the placement of Shares in accordance with Resolution 6 would be at a price of A$ 0.38 per Share which potentially represents a discount of 3.8% on the VWAP as at the date of the placement agreement (28 April 2010).

Under Listing Rule 7.1, the prior approval of shareholders is required in respect of the proposed issue of Shares because the securities to be issued will exceed 15% of the number of securities on issue at the commencement of the previous 12 months.

Listing Rule 7.3 requires that the following information be provided to Shareholders in respect of Resolution 6 for the purposes of Listing Rule 7.1:

a) The number of securities the Company is to issue: 60,000,000 Shares;
b) Issue date: The issue of the Shares is anticipated to take place before 2 June 2011, but in any event will occur no later than 30 August 2011;
c) Issue price: The Shares will be issued at an issue price of A$0.38 per Share;
d) Allottees: The 60,000,000 Shares will be issued and allotted primarily to selected institutional investors in accordance with s708(8) and s708(10) of the Corporations Act who are not related parties of the Company no later than 30 August 2011;
e) Terms of the securities: The 60,000,000 Shares will rank equally with the existing Shares on issue;
f) Intended use of funds raised: Funds raised will be used to complete a feasibility study on the Mollacas copper leach project, including further drilling and metallurgical testwork, and to undertake detailed deep looking geophysical surveys on the Vallecillo, Loica and Camaron projects to assist in defining drill targets and a new drilling program covering the Cu-Au porphyry target recently discovered at Vallecillo and enable Metminco to accelerate the drilling campaign currently underway at the Los Calatos project;
g) Voting exclusion statement: The Company will disregard any votes cast on this Resolution 6 by any person who may participate in the proposed issue of securities identified in this resolution or any person who might obtain a benefit, except a benefit solely in the capacity of a Shareholder, from the issue of securities identified in this resolution or any associate of such a person.

However, the Company need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

As Shareholder approval is only being sought under Listing Rule 7.1, the Shares will not be issued to related parties of the Company (as defined in Listing Rule 10.11) including but not limited to Directors and their spouses, entities controlled by Directors and controlling Shareholders of the Company.

The Board unanimously recommends that eligible Shareholders vote in favour of Resolution 6.

10 METMINCO LIMITED ACN 119 759 349

glOSSARY

In this Explanatory Memorandum, the following terms have the following meanings unless the context requires otherwise:

A$	means a dollar in the currency of the Commonwealth of Australia unless otherwise specifed
Annual General Meeting,	means the annual general meeting of Shareholders convened for the purposes of considering
or Meeting	the Resolutions to be held at Level 14, 131 Macquarie Street, Sydney, NSW 2000 on Monday 30
	May 2011 at 10.00 am
ASX	means ASx Limited (ACN 008 624 691)
Barrick Gold Corporation	means Barrick Gold Corporation, a company listed on the Toronto Stock Exchange (TxS: ABx)
Barrick Broup	means Barrick Gold Corporation and its subsidiaries
Board	means the board of Directors of the Company
Buy Back Right	means a once of right to purchase 51% of Minera CN SAC for a consideration of 200% of
	exploration and other expenditure incurred, if at any time, economic resources of more than
	2 million ounces of gold and/or more than 1 million tons of fne copper are converted into
	provable and/or probable reserves by a scoping study or by a feasibility study
Cerro Norte	means Minera Cerro Norte SA a company registered in the Republic of Peru, a member of the
	Metminco Group and owner of 100% of Minera CN SAC
Camaron Project	means mining and exploration tenements located approximately 500 km north of Santiago,
	Chile covering an area of 130 sq km
Company	means Metminco Limited (ACN 119 759 349)
Constitution	means the constitution of the Company
Corporations Act	means_Corporations Act_2001 (Cth)
Daily AUD/USD Rate	means the average interbank rate in respect of the translation or conversion of A$ to US$
Director	means a director of the Company
Em Dos	means Inversiones Em Dos Limitada, a private company registered in the Republic of Chile
Explanatory	means the Explanatory Memorandum accompanying the Notice of Meeting
Memorandum
Hampton	means Hampton Mining Limited (ABN 55 103 712 385), a wholly owned subsidiary of the
	Company
JORC Compliant	means reporting of resources in accordance with the JORC Code
Resources
Listing Rules	means the listing rules of ASx
Loica Project	means mining and exploration tenements located approximately 500 km north of Santiago,
	Chile covering an area of 35 sq km
Los Calatos Project	means mining and exploration tenements located in southern Peru covering an area of 214 sq
	km consisting of a number of tenements including the Alpha, Gamma and Nelson tenements
	owned by Minera CN SAC
Metminco	means Metminco Limited (ACN 119 759 349)
Metminco Group	means Metminco and its subsidiaries
Minera CN SAC	means Minera CN SAC a company registered in the Republic of Peru, a member of the Metminco
	Group and owner of the Alpha, Nelson and Gamma tenements forming part of the Los Calatos
	Project
MN Agreement	means an agreement dated 30 December 2005 between and Em Dos and Hampton in respect of
	the MN Projects
MN Projects	means the Mollacas, Vallecillo and Loica Projects
Mollacas Project	means mining and exploration tenements located approximately 500 km north of Santiago,
	Chile covering an area of 32 sq km
Notice of Meeting, or	means the notice of meeting which accompanies the Explanatory Memorandum.
Notice

Annual General Meeting 30 May 2011

eXPLAnAtoRY MeMoRAndUM continued

Placer Dome Peru	means Placer Dome Del Peru SAC, a company registered in the Republic of Peru and member of
	the Barrick Group.
Remuneration Report	means Remuneration Report forming part of the Report to Shareholders – December 2010
Report to Shareholders	means Report of the Company for the six months ended 31 December 2010
Resolution(s)	means a resolution or resolutions referred to in the Notice
SCM Ovalle	means Sociedad Contractual Minera Ovalle a company registered in the Republic of Chile and
	owner of the Mollacas copper leach project, the Vallecillo gold-zinc project and the Loica project
	located in Region IV in central Chile, approximately 500 km north of Santiago
Share or Shares	means a fully paid ordinary share(s) in the capital of the Company
Shareholder	means a holder of fully paid ordinary shares in the capital of the Company
Sydney time	means date and time in Sydney Australia
US$	means a dollar in the currency of the United States of America unless otherwise specifed
Vallecillo Project	means mining and exploration tenements located approximately 500 km north of Santiago,
	Chile covering an area of 200 sq km
VWAP	means the weighted average A$ sale price of Shares on the ASx
VWAP - US$	means VWAP on a trading day converted at the Daily AUD/USD Rate for that day
VWAP - US$ - 30 days	means the weighted average VWAP - US$ over the 30 trading days immediately preceding the
	day of the respective agreement

Dated: 28 April 2011

12 METMINCO LIMITED ACN 119 759 349

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

PROXY FORM

METMINCO LIMITED

REGISTERED OFFICE:

ACN 119 759 349

Level 6 122 Walker Street NORTH SYDNEY NSW 2060 AUSTRALIA

==> picture [262 x 76] intentionally omitted <==

SHARE REGISTRY: Security Transfer Registrars Pty Ltd All Correspondence to: PO BOX 535, APPLECROSS WA 6953 AUSTRALIA 770 Canning Highway, APPLECROSS WA 6153 AUSTRALIA T: +61 8 9315 2333 F: +61 8 9315 2233 E: [email protected] W: www.securitytransfer.com.au

==> picture [109 x 35] intentionally omitted <==

Code: MNC Holder Number:

SECTION A: Appointment of Proxy

I/We, the above named, being registered holders of the Company and entitled to attend and vote hereby appoint:

OR

The meeting Chairperson The name of the person you are appointing (mark with an "X") (if this person is someone other than the Chairperson of the meeting).

or failing the person named, or if no person is named, the Chairperson of the Meeting, as my/our Proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the Proxy sees fit) at the Annual General Meeting of the Company to be held at 10.00am (AEST) on Monday, 30 May 2011 at Level 14, 131 Macquarie Street, Sydney, NSW, 2000 and at any adjournment of that meeting.

SECTION B: Voting Directions to your Proxy

Please mark "X" in the box to indicate your voting directions to your Proxy.

Resolution

For Against Abstain*

To adopt the Remuneration Report for the 6 months ended 31 December 2010
Re-election of Antonio Ortuzar as a Director
To ratify the prior allotment and issue of a total of 75,000,000 Shares
To ratify the prior allotment and issue of a total of 70,250,855 Shares
To ratify the prior allotment and issue of a total of 20,000,000 Shares
To approve the issue of 60,000,000 new fully paid ordinary shares at a subscription price of $A0.38 per Share to selected sophisticated or institutional investors.

==> picture [111 x 167] intentionally omitted <==

If no directions are given my proxy may vote as the proxy thinks fit or may abstain.

If you mark the Abstain box for a particular item, you are directing your Proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

If you wish to appoint the Chairperson as your proxy and you do not wish to direct the Chairperson how to vote, please mark "X" in the box.

By marking this box, you acknowledge that the Chairperson may exercise your proxy even if he has an interest in the outcome of the resolutions 3 & 6 and votes cast by him/her other than as a proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on the resolutions 3 & 6 and your votes will not be counted in calculating the required majority if a poll is called on the resolutions 3 & 6. The Chairperson of the Meeting intends to vote undirected proxies in favour of the resolutions 3 & 6.

SECTION C: Please Sign Below

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

SECTION C: Please Sign Below This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.	SECTION C: Please Sign Below This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.	SECTION C: Please Sign Below This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.
Individual or Security Holder Sole Director and Sole Company Secretary Security Holder 2 Director Security Holder 3 Director / Company Secretary
	1 Reference Number: MNC 1 2519638543

My/Our contact details in case of enquiries are: NAME

TELEPHONE NUMBER

( )

NOTES

1. Name and Address

This is the name and address on the Share Register of Metminco Limited. If this information is incorrect, please make corrections on this form. Shareholders sponsored by a broker should advise their broker of any changes. Please note that you cannot change ownership of your shares using this form.

2. Appointment of a Proxy

If you wish to appoint the Chairperson of the Meeting as your Proxy please mark "X" in the box in Section A. Please also refer to Section B of this proxy form and ensure you mark the box in that section if you wish to appoint the Chairperson as your Proxy.

If the person you wish to appoint as your Proxy is someone other than the Chairperson of the Meeting please write the name of that person in Section A. If you leave this section blank, or your named Proxy does not attend the meeting, the Chairperson of the Meeting will be your Proxy. A Proxy need not be a Shareholder of Metminco Limited.

3. Directing your Proxy how to vote

To direct the Proxy how to vote place an "X" in the appropriate box against each item in Section B. Where more than one Proxy is to be appointed and the proxies are to vote differently, then two separate forms must be used to indicate voting intentions.

4. Appointment of a Second Proxy

You are entitled to appoint up to two (2) persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second Proxy, an additional Proxy form may be obtained by telephoning the Company's share registry +61 8 9315 2333 or you may photocopy this form.

5. Signing Instructions Individual: where the holding is in one name, the Shareholder must sign.

Joint Holding: where the holding is in more than one name, all of the Shareholders must sign.

Power of Attorney: to sign under Power of Attorney you must have already lodged this document with the Company's share registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the Company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the Company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director may sign alone. Otherwise this form must be signed by a Director jointly with either another Director or Company Secretary. Please indicate the office held in the appropriate place.

If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be lodged with the Company before the meeting or at the registration desk on the day of the meeting. A form of the certificate may be obtained from the Company's share registry.

6. Lodgement of Proxy

Proxy forms (and any Power of Attorney under which it is signed) must be received by Security Transfer Registrars Pty Ltd no later than 10.00am (AEST) on Saturday, 28 May 2011, being 48 hours before the time for holding the meeting. Any Proxy form received after that time will not be valid for the scheduled meeting.

Security Transfer Registrars Pty Ltd PO BOX 535 Applecross, Western Australia 6953

To appoint a second Proxy you must:

(a) On each of the Proxy forms, state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each Proxy may exercise, each Proxy may exercise half of your votes; and
(b) Return both forms in the same envelope.

Street Address: Alexandrea House, Suite 1 770 Canning Highway Applecross, Western Australia 6153

Telephone +61 8 9315 2333 Facsimile +61 8 9315 2233 Email [email protected]

PRIVACY STATEMENT

Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details of your personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

9431638543

==> picture [40 x 86] intentionally omitted <==

==> picture [63 x 63] intentionally omitted <==

REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2010

==> picture [40 x 171] intentionally omitted <==

==> picture [557 x 305] intentionally omitted <==

==> picture [40 x 171] intentionally omitted <==

==> picture [40 x 85] intentionally omitted <==

METMINCO LIMITED REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2010 ABN 43 119 759 349

==> picture [527 x 647] intentionally omitted <==

----- Start of picture text -----

CONTENTS
CHAIRMAN’S LETTER 1
CORPORATE GOVERNANCE STATEMENT 2
DIRECTORS’ REPORT 5
AUDITOR’S INDEPENDENCE DECLARATION 28
FINANCIAL STATEMENTS 29
NOTES TO THE FINANCIAL STATEMENTS 34
DIRECTORS’ DECLARATION 72
INDEPENDENT AUDITOR’S REPORT 73
SHAREHOLDER INFORMATION 75
CORPORATE DIRECTORY INSIDE BACK COVER
----- End of picture text -----

CHAIRMAN’S LETTER

In March 2011 I was honoured to be appointed Chairman of Metminco and I look forward to transforming the Company through advancement of the Company’s high potential portfolio of exploration projects.

During the six month period ended 31 December 2011 Metminco achieved a number of signifi cant milestones with the Company continuing to build on its past achievements.

Metminco completed the purchase of 100% of Hampton Mining Limited (Hampton), announced a 350% increase in resources at Hampton’s Los Calatos project, and raised $35 million to fund advancement of Hampton’s projects and for working capital.

The move to 100% ownership of Hampton has enabled the Company to concentrate on rationalising the operational and corporate aspects of the business, particularly the implementation of an aggressive exploration program to build on the 926 million tonne copper/molybdenum resource already announced at Los Calatos. This resource now contains over 4.7 million tonnes of copper equivalent metal in situ (or over 10 billion lbs copper equivalent).

The Company identifi ed 8 high level targets at Los Calatos within a ‘Porphyry Cluster’ which is 68 km in extent and is defi ned by a strong arsenic soil anomaly. Drill testing of these targets commenced in December 2010 with a 50,000 metre drilling program.

Hampton’s other projects include the Mollacas copper leach project and the Vallecillo gold-zinc project, both located in Chile approximately 500 km north of Santiago.

The Company has now completed detailed metallurgical test work at the Mollacas heap leach/SXEW project. Initial indications are that the results of the testwork have been very positive and detailed analysis of the results of the testwork are currently being fi nalised. The Company will commence with a detailed feasibility study as soon as this analysis is completed.

In March 2011, Mr John Fillmore who was the founding Chairman of Metminco resigned from the Board in order to focus on his legal practice and his other business interests. On behalf of the Board I would like to thank Mr Fillmore for his signifi cant contribution to the Board and the Company as a whole.

I take this opportunity to thank the Board of the Company for their confi dence in my appointment as Chairman of the Board.

Finally I would like to thank the management and staff of Metminco for their very considerable achievements over the last year and our shareholders for their continued support.

Our Chief Executive Offi cer, William Howe, has made a great start building up Metminco’s development structure in Chile and Peru, including fi nancial, legal, technology, health and safety, environment and community and government relations, which are aspects that will enable Metminco to grow rapidly and eff ectively.

Our team has a strong background in project development, mining and doing business in Chile and Peru.

I look forward to the continued strong growth of the Company in the years to come.

Antonio Ortuzar Vicuña Chairman

==> picture [40 x 842] intentionally omitted <==

CORPORATE GOVERNANCE STATEMENT

Unless disclosed below, all the best practice recommendations of the ASX Corporate Governance Council have been applied for the entire six month period ended 31 December 2010.

Board Composition

The skills, experience and expertise relevant to the position of each director who is in offi ce at the date of the report and their term of offi ce are detailed in the Directors’ Report.

The names of the independent directors are Timothy Read and Francisco Vergara-Irarrazaval.

Due to the stage of development of the Company the majority of the directors are not independent.

When determining whether a non-executive director is independent the director must not fail any one of the following materiality thresholds:

less than 10% of Company shares are held by the director and any entity or individual directly or indirectly associated with the director;
no sales are made to or purchases made from any entity or individual directly or indirectly associated with the director; and
none of the directors’ income or the income of an individual or entity directly or indirectly associated with the director is derived from a contract with any member of the Consolidated Group other than income derived as a director of the entity.

Directors have the right to seek independent professional advice in the furtherance of their duties as directors at the Company’s expense. Written approval must be obtained from the chairman prior to incurring any expense on behalf of the Company.

Ethical Standards

The Board acknowledges and emphasises the importance of all directors and employees maintaining the highest standards of corporate governance practice and ethical conduct.

A code of conduct has been established requiring directors and employees to:

act honestly and in good faith;
exercise due care and diligence in fulfi lling the functions of offi ce;
avoid confl icts and make full disclosure of any possible confl ict of interest;
comply with the law;
encourage the reporting and investigating of unlawful and unethical behaviour; and
comply with the share trading policy outlined in the code of conduct.

Directors are obliged to be independent in judgment and ensure all reasonable steps are taken to ensure due care is taken by the Board in making sound decisions.

Trading Policy

The Company’s policy regarding directors and employees trading in its securities is set by the Audit Committee. The policy restricts directors and employees from acting on material information until it has been released to the market and adequate time has been given for this to be refl ected in the security’s prices.

2 METMINCO LIMITED Report for the six months ended 31 December 2010

In compliance with AIM Listing Rules, directors and offi cers of the Company are also not permitted to trade in the Company’s securities for the periods as follows:

two months preceding the publication of the Company’s annual results or, if shorter, the period from its fi nancial year end to the time of publication;
two months immediately preceding the notifi cation of the Company’s half-yearly report or, if shorter, the period from the relevant fi nancial period end up to and including the time of the notifi cation; or
one month immediately preceding the notifi cation of the Company’s quarterly results or, if shorter, the period from the relevant fi nancial period end up to and including the time of the notifi cation.

Occupational Health and Safety Policy

Metminco will be a model for responsible exploration and mining.

Having excellent local and government relationships and solid health, safety and environmental practices is just as important to a successful mining project as strong technical expertise. Metminco and its subsidiaries have demonstrated their corporate responsibility, proof of which was renewal of the Environmental Impact Declaration permit for their exploration activities earlier this year and a continuing and amicable dialogue with local community groups. Metminco will continue to build on its positive record in Chile and Peru.

Diversity Policy Statement

Metminco’s workforce consists of people from diverse backgrounds with a range of skills, values and experiences. The Company recognises the organisational strength, deeper problem solving ability and opportunity for innovation that this diversity brings. The Company is committed to providing an environment in which all employees are treated with fairness and respect, and have equal access to opportunities available at work.

Audit Committee

The names and qualifi cations of those appointed to the Audit Committee and their attendance at meetings of the Committee are included in the Directors’ Report.

Performance Evaluation

Due to the reporting period being a period of six months as a result of a change in year end of the Company, an annual performance evaluation of the Board and all Board members was not conducted.

Board Roles and Responsibilities

The Board is fi rst and foremost accountable ensuring its actions are in accordance with key corporate governance principles.

Shareholder Rights

Shareholders are entitled to vote on signifi cant matters impacting on the business, which include the election and remuneration of directors, changes to the constitution and receipt of annual and interim fi nancial statements. Shareholders are strongly encouraged to attend and participate in the Annual General Meetings of Metminco Limited, to lodge questions to be responded to by the Board, and are able to appoint proxies.

==> picture [40 x 842] intentionally omitted <==

CORPORATE GOVERNANCE STATEMENT continued

Risk Management

The Board considers identifi cation and management of key risks associated with the business as vital to maximise shareholder wealth. A yearly assessment of the business’ risk profi le is undertaken and reviewed by the Board, covering all aspects of the business from the operational level through to strategic level risks. The Chief Financial Offi cer has been delegated the task of implementing internal controls to identify and manage risks for which the Board provides oversight. The eff ectiveness of these controls is monitored and reviewed regularly.

The Chief Executive Offi cer and Chief Financial Offi cer have signed a declaration in accordance with s295A of the Corporations Act that internal compliance and control systems of the Company and Consolidated Group to the extent they relate to fi nancial reporting are operating effi ciently and eff ectively, are founded on a sound system of risk management and internal control and that the system is operating eff ectively in all material respects in relation to the reporting of fi nancial risks.

Remuneration Policies

The Remuneration Policy, which sets the terms and conditions for the key management personnel, was developed by the Remuneration and Nomination Committee after seeking professional advice from independent consultants and was approved by the Board. All executives receive a base salary, superannuation, fringe benefi ts, performance incentives and retirement benefi ts. The Remuneration and Nomination Committee reviews executive packages annually by reference to Company performance, executive performance, comparable information from industry sectors and other listed companies and independent advice. The policy is designed to attract the highest calibre executives and reward them for performance, which results in long-term growth in shareholder value.

Executives are also entitled to participate in any employee share and option arrangements.

The amount of remuneration for all key management personnel for the Company is detailed in the Directors’ Report under the heading Remuneration Report. All remuneration paid to executives is valued at the cost to the Company and expensed. Shares given to executives are valued as the diff erence between the market price of those shares and the amount paid by the executive. Options are valued using the Binomial methodology.

The Board expects that the remuneration structure implemented will result in the Company being able to attract and retain the best executives to manage the Consolidated Group. It will also provide executives with the necessary incentives to work to grow long-term shareholder value.

The payment of bonuses, options and other incentive payments are reviewed by the Remuneration and Nomination Committee annually as part of the review of executive remuneration and a recommendation is put to the Board for approval. The Board can exercise its discretion in relation to approving incentives, bonuses and options and can recommend changes to the committee’s recommendations. Any changes must be justifi ed by reference to measurable performance criteria.

Remuneration and Nomination Committee

The names of the members of the Remuneration and Nomination Committee and their attendance at meetings of the committee are detailed in the Directors’ Report.

There are no schemes for retirement benefi ts other than statutory superannuation for non-executive directors.

Other Information

Further information relating to the Company’s corporate governance practices and policies has been made publicly available on the Company’s website at www.metminco.com.au.

4 METMINCO LIMITED Report for the six months ended 31 December 2010

DIRECTORS’ REPORT

The Directors present their report together with the fi nancial statements of the Group being Metminco Limited (Metminco or the Company) and its controlled entities, for the six month period ended 31 December 2010. During the period Metminco changed its fi nancial year end from 30 June to 31 December in order to synchronise the Group’s reporting. The comparatives used in the report are for the twelve months ended 30 June 2010.

Directors

The following persons held the offi ce of director at anytime during or since the six month period ended 31 December 2010:

John Fillmore (resigned 16 March 2011) Non Exective Chairman William J Howe Managing Director Timothy Read Non Executive Director Francisco Vergara-Irarrazaval Non Executive Director Phillip J Wing Director William S Etheridge Director

Antonio Ortuzar was appointed as a Director of the Company and Chairman of the Board on 16 March 2011.

Directors have been in offi ce since the start of the six month period unless otherwise stated.

Company Secretary

Philip Killen was the Company Secretary for the six month period and was in offi ce at the date of this report.

Principal activities and signifi cant changes in the nature of activities

The principal activities of the Group during the six month period were as a diversifi ed mineral explorer focussing on prospects in South America, through its wholly owned subsidiaries Hampton Mining Limited (Hampton) an unlisted Australian public company and North Hill Holdings Group Inc, (North Hill) a company registered in the British Virgin Islands. Hampton and North Hill have a signifi cant portfolio of projects located in Chile and Peru, primarily focused on porphyry copper style deposits, but including exposure to gold, molybdenum and zinc.

Operating results

The consolidated loss of the Group for the six month period was $11,340,398 after providing for income tax (30 June 2010: loss of $7,776,592 for 12 months).

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ REPORT continued

Review of operations

Metminco, through its wholly owned subsidiaries Hampton and North Hill, holds equity interests and rights over a number of precious metal projects located in the world-class Andean porphyry province of Chile and Peru. A summary of Metminco’s projects is given below, with the two most advanced projects being the Los Calatos coppermolybdenum porphyry deposit in southern Peru and the Mollacas copper leach deposit in Region IV, Chile.

The Company’s premier project, Los Calatos, is located near and in a similar geological setting to three large operating copper-molybdenum porphyry mines held by others, namely the Cerro Verde, Cuajone and Toquepala mines (Figure 1). JORC compliant resources have been estimated at Los Calatos at a 0.2% copper cut-off grade, of 926 million tonnes, comprising Indicated Resources of 111 million tonnes at 0.39% copper and 380 ppm (0.038%) molybdenum and Inferred Resources of 815 million tonnes at 0.37% copper and 260 ppm (0.026%) molybdenum.

A 50,000 metre diamond drilling program commenced in December 2010 which has been designed to further test the Los Calatos porphyry system.

Metminco’s other advanced projects are the Mollacas copper leach project, currently at the pre-feasibility study stage, and the Vallecillo gold-zinc project which are both located approximately 500 km north of Santiago, Chile.

Figure 1: Metminco projects in Chile and Peru

Note: Shows major known copper deposits. Tonnages and grades shown are for estimated resources before any extraction, but taking account of any resource additions subsequent to start of any operations

==> picture [344 x 526] intentionally omitted <==

6 METMINCO LIMITED Report for the six months ended 31 December 2010

==> picture [222 x 26] intentionally omitted <==

The Los Calatos Project is located in southern Peru, approximately 80 kilometres due southeast of the important regional city of Arequipa, and approximately 60 kilometres northwest of the town of Moquegua. Tacna, near the Chile border, is approximately 170 kilometres to the south east of the project. The project is included within 26 granted exploration licences covering 214 square kilometres (Figure 2), and is accessed by sealed road (Pan American Highway) from Moquegua and Arequipa, except for the last 50 kilometres which is unsealed. The port of Ilo is located approximately 160 kilometres by road to the south of the project area. The project area is located at an altitude of approximately 2,900 metres above sea level.

The project occurs within a historically well defi ned copper-molybdenum porphyry belt in southern Peru. Production from mines in this region exceeded 600,000 tonnes of copper metal in 2009. With the proposed upgrade to the Toquepala and Cerro Verde mines and the development of the Tia Maria and Quellaveco mines, production from this belt is anticipated to increase to more than 1.2 million tonnes of copper metal per annum. Molybdenum is a signifi cant byproduct of copper mining from this belt.

Metminco commenced a 50,000 metre diamond drilling program in December 2010 which is designed to test the Los Calatos porphyry system.

In late 2010 Metminco commissioned a comprehensive program of ground geophysical surveys across the large Los Calatos Cu-Mo porphyry system. The program was undertaken by an independent contractor, Quantec, and surveyed magnetic and electrical properties.

Surveying, analysis and interpretation of the resistivity and chargeability features will give a detailed subsurface 3D understanding of the alteration, structural and lithological features at Los Calatos. These features will be integrated with the results of various surface sampling and drilling programs conducted over Los Calatos to date, and are expected to provide an important guide to the occurrence of potential additional mineralisation across the system.

In July 2010, Hampton announced a JORC compliant Mineral Resource estimate, as follows:

Total combined resources of 926,234,000 tonnes reported at a cut-off grade of 0.2% Cu comprising:

� Indicated Resources 111,264,000 tonnes at 0.39% Cu and 380 ppm (0.038%) Mo � Inferred Resources 814,970,000 tonnes at 0.37% Cu and 260 ppm (0.026%) Mo

Resources estimated across a range of copper cut-off grades are tabulated as follows:

==> picture [483 x 121] intentionally omitted <==

----- Start of picture text -----

CUT-OFF GRADE INDICATED RESOURCES INFERRED RESOURCES
% t (‘000) Cu % Mo % t (‘000) Cu % Mo %
0.40 36,975 0.59 0.62 296,699 0.55 0.034
0.35 49,036 0.54 0.055 365,562 0.52 0.034
0.30 64,108 0.49 0.049 463,465 0.47 0.032
0.25 86,325 0.43 0.044 594,390 0.43 0.030
0.20 111,264 0.39 0.038 814,970 0.37 0.026
0.15 136,269 0.35 0.034 1,049,445 0.33 0.022
----- End of picture text -----

At the 0.2% copper cutoff grade, the drilling to date defi nes a mineralised porphyry body with a drill tested strike length of 900 metres, a maximum drill tested width of 500 metres, and a drill tested vertical depth of 1100 metres. The cutoff grade of 0.2% copper is broadly consistent with a development concept of large-scale open pit mining.

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ REPORT continued

LOS CALATOS continued

Extensive regional scale mapping and geochemical traverse sampling have been undertaken by Hampton over the last two and half years, covering a large part of the extensive licences. This work has identifi ed eight signifi cant surface alteration and geochemical anomalous zones which collectively fall within a porphyry ´cluster´ (Figure 2). These anomalies, along with the main zone at Los Calatos have recently been geophysically surveyed and now require follow-up modelling and analysis ahead of being drill tested. The geochemically anomalous areas occur as ‘windows’ beneath overlying unmineralised volcanics and recent volcanic ash (Figure 4).

Preliminary fl otation testwork undertaken in 2009 on composite samples from drill core have been previously reported by the Company. The test results (predicted results from each of the locked cycle tests) are shown in the following table:

Further metallurgical testwork is warranted to optimise copper recoveries and copper concentrate grade by conventional fl otation, and to test fl otation and separation of the molybdenum from the copper/ molybdenum concentrate. Gold and silver are also likely to contribute as credits to any revenue stream from mining and concentrating operations at Los Calatos. The grades of eight concentrate samples are shown in the table below:

		CONCENTRATE	GRADE OF 8 SAMPLES
Element	Unit	Average	Range
Ag Au Cu	g/t g/t %	42 1.15 24.93	12 - 91 0.7 - 1.8 21.4 - 30.5
Mo	%	3.08	0.62 - 5.94

CONCENTRATE GRADES	CONCENTRATE GRADES	CONCENTRATE RECOVERIES	CONCENTRATE RECOVERIES
Cu %	Mo %	Cu %	Mo %
25.0	3.1	87.5	79.1

==> picture [379 x 263] intentionally omitted <==

Figure 2: Plan of the Los Calatos copper-molybdenum project showing the Metminco licences, geological and geochemical anomalism and the trend of associated mineralisation

8 METMINCO LIMITED Report for the six months ended 31 December 2010

==> picture [398 x 237] intentionally omitted <==

Figure 3: Los Calatos diamond drill core showing the presence of copper and molybdenum

==> picture [398 x 277] intentionally omitted <==

Figure 4: Los Calatos copper-molybdenum project

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ REPORT continued

==> picture [184 x 26] intentionally omitted <==

The Mollacas Project, 50% owned by Metminco, covers an area of 33 square kilometres and is located in Region IV Chile, approximately 65 kilometres east of the town of Ovalle. The Mollacas Project is 160 kilometres by road from the important port of La Serena, and approximately 450 kilometres north of Santiago. Metminco holds its 50% interest in the project through its wholly owned subsidiary Minera Hampton Chile Limitada (Minera Hampton), with the balance benefi cially held by Chilean corporation MN Ingenerios Limitada.

The Mollacas Project is located along a north south trending volcanic sequence, which has been subsequently intruded by sub-volcanic porphyritic rocks. The deposit occurs within an alteration zone approximately 800 x 600 metres in size. Copper mineralisation is developed as an oxide and supergene “blanket” above the primary porphyry mineralisation.

Initial drilling of 10 reverse circulation and 46 diamond core drill holes (Figure 7) generated JORC compliant Indicated Resources of 7.2 million tonnes at 0.56% copper and Inferred Resources of 9.8 million tonnes @ 0.52% copper, for total copper resources of 17.0 million tonnes. A Scoping Study undertaken by SRK Consulting, Chile, in 2008 estimated that current resources at Mollacas could be mined over a 7 year mine life producing approximately 13,500 tonnes per annum cathode at a unit operating cost of approximately US$0.91 per pound. At copper prices of US$2.50/pound the Net Present Value of the project is estimated as US$103 million at a Discount Rate of 8% with an Internal Rate of Return 70%.

In November 2008, Hampton completed a 3,970 metre infi ll drilling program, providing material for detailed leach testing. Detailed column leach testwork on oxide and supergene ores for the Mollacas deposit, undertaken by CIMM laboratories in Santiago, was completed late October 2010. Analysis of the leach results is currently being completed.

This will provide information for leaching and solvent extraction/ electrowinning design as part of a fi nal feasibility study, and will refi ne copper recoveries and provide more accurate estimates of operating and capital costs.

Figure 7: Mollacas copper leach SXEW project: Google Earth image showing drilled deposit and valley to west, proposed site for leach pads and plant

10 METMINCO LIMITED Report for the six months ended 31 December 2010

==> picture [200 x 26] intentionally omitted <==

The Vallecillo Project, owned variably between 50% and 100% by Metminco, covers an area of 179 square kilometres (including recent applications), and is located approximately 50 kilometres northeast of Ovalle and some 25 kilometres north of the Mollacas Project. The Vallecillo Project contains porphyry and porphyry related base and precious metal mineralisation. JORC compliant resources have been defi ned for gold-zinc breccia mineralisation within the La Colorada deposit. As with Mollacas, Minera Hampton has a 50% interest in the project, with the balance benefi cially held by MN Ingenerios Limitada.

SRK Consulting (Chile) completed a revised resource estimation for the La Colorada gold-zinc-silver-lead (Au-ZnAg-Pb) deposit at Vallecillo in late 2009 based on two campaigns of drilling by Hampton (in 2006 and 2008) for a total of 29 holes totalling 8,490 metres. At a cut-off grade of 0.3 g/t gold, total JORC compliant resources (2008) are estimated as 10.1 million tonnes and can be broken down into;

Indicated Resources: 7.9 million tonnes @ 1.14 g/t Au; 11.4 g/t Ag; 1.32% Zn; 0.29% Pb
Inferred Resources: 2.2 million tonnes @ 0.78 g/t Au; 8.2 g/t Ag; 0.58% Zn; 0.26% Pb

Contained metal equivalent increased by approximately 40% over the previous resource estimate undetaken in 2006.

Preliminary metallurgical testwork for the La Colorada deposit, completed in early 2010, indicates a gold recovery on site of approximately 93% into Dore bullion, via gravity and leaching of zinc concentrates, and recovery of greater than 90% zinc into a zinc concentrate averaging approximately 54% zinc.

The Company has recently increased its licence area in the Vallecillo area through further exploration licence applications following up on regional exploration undertaken by the Company.

Detailed surface mapping and grid geochemical sampling of Vallecillo during 2009 and 2010 has identifi ed seven exploration targets: four targets (V-1 to V-4) are polymetallic (Au/Pb/Zn/Ag), two targets (V-5 and V-6) are Au-Cu porphyry (Figure 5) and one target (V-7) is Au. Three targets (V-2 to V-4) are possible extensions to the La Colorada gold-zinc breccia deposit (V-1), where Metminco has delineated JORC resources (Figure 6).

==> picture [318 x 212] intentionally omitted <==

Figure 5:

Vallecillo project: view northwest across the undrilled copper-gold porphyry target

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ REPORT continued

VALLECILLO continued

==> picture [432 x 490] intentionally omitted <==

Figure 6: Vallecillo project: Plan showing granted and application leases and current exploration targets (Pb/Au/Cu) overlain on IKONOS satellite image.

12 METMINCO LIMITED Report for the six months ended 31 December 2010

==> picture [173 x 26] intentionally omitted <==

The Camaron Project covers an area of approximately 130 square kilometres and is located at an elevation of 1500 metres above sea level to the north of the Vallecillo Project, some 20 kilometres south of the town of Vicuna and 60 kilometres to the east of the port of La Serena.

Minera Hampton holds 100 square kilometres of tenements in its own right and has an option to purchase 100% of the remaining 30 square kilometres of tenements.

Camaron is a large anomalous untested low-sulphidation gold mineralised system that may be related to a porphyry hydrothermal system.

Broad spaced grid geochemical mapping and sampling completed in late 2009 returned signifi cant copper, gold and molybdenum values and identifi ed a number of drill targets (Figure 8). Three main areas have been selected for a maiden drilling program and an initial reverse circulation drilling program is anticipated to commence during 2011.

==> picture [316 x 412] intentionally omitted <==

Exploration results to date suggest that the Camaron Project presents a large intensely leached gold-copper porphyry complex, known to also be anomalous in molybdenum at surface. The surface expression of this large alteration system (argillic/ chloritic/silicifi cation) covers an area of approximately 10 kilometres x 6 kilometres and is oriented northwestsoutheast.

Geological surveying and geochemical analysis suggests the gold anomalies are associated with low sulphidation ‘Hot Springs’ type gold mineralisation.

Figure 8: Camaron gold project: large low sulphidation epithermal gold system (note: anomalous Au occurs within the areas outlined by dashed red lines)

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ REPORT continued

ISIDRO

The Isidro Project, which is located immediately north and east of Vicuna and hence north of the Camaron Project, covers an area of approximately 250 square kilometres: 230 square kilometres of which are 100% owned by Minera Hampton; and the remaining 20 square kilometres is held by SCM San Lorenzo which is 50% owned by Minera Hampton.

Isidro has been interpreted to be a large copper-gold (Cu-Au) stacked manto system, and is as yet untested by drilling. Surface geochemical sampling by Minera Hampton has indicated extensive strong Cu-Au anomalism.

Future exploration will comprise prospect scale mapping, as well as broader reconnaissance mapping, assisted by satellite imagery and broad scale geochemical sampling, leading to further defi nition of drilling targets. A maiden drilling program is scheduled to commence in 2011.

LOICA

The Loica Project, 50% owned by Metminco, covers an area of 35 square kilometres and is located approximately 100 kilometres south east of Ovalle. It comprises a large copper-molybdenum porphyry system, approximately 4 kilometres long, and is oriented north-south. Minera Hampton drilling of the upper part of the Loica system in 2007 intersected signifi cant widths of low grade Cu-Mo mineralisation.

Future exploration is warranted and will comprise mapping, geochemical sampling and geophysical surveys of the breccia zones as a prelude to possible further drill testing.

OTHER AREAS

The identifi cation of new areas in the north of Chile has commenced with applications placed for Caldera (42 square kilometres) in the Arica area, and Jaspe (14 square kilometres) in the Antofagasta area.

14 METMINCO LIMITED Report for the six months ended 31 December 2010

RESOURCE INVENTORY

MINERAL RESOURCE ESTIMATES AS AT 31 DECEMBER 2010

				GRADE		CONTAINED TONNES
PROJECT	CATEGORY	RESOURCE	COPPER	MOLYBDENUM	COPPER EQUIVALENT METAL
LOS CALATOS1 MOLLACAS2	INDICATED INFERRED INDICATED	million tonnes 111.26 814.97 7.21	% 0.39 0.37 0.56	% 0.038 0.026	million tonnes million pounds 0.65 1,422.71 4.07 8,983.50 0.04 89.05
	INFERRED	9.83	0.52		0.05	112.68
					GRADE
PROJECT	CATEGORY	RESOURCE	GOLD	SILVER	ZINC	LEAD
		million tonnes	grams/tonne	grams/tonne	%	%
VALLECILLO3	INDICATED	7.89	1.14	11.39	1.32	0.29
	INFERRED	2.21	0.78	8.16	0.58	0.26

NOTES:

1 Reported at a 0.2% copper cutoff

2 Reported at a 0.2% copper cutoff

3 Reported at a 0.3 grams per tonne gold cutoff

Competency Statements

The estimate of the Resources for the Los Calatos Project as presented in this statement, has been carried out in accordance with the guidelines of the ‘Australian Code for Reporting of Mineral Resources and Ore Reserves’ committee of the Australian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and the Mineral Council of Australia, 2004. Information was collated and interpreted by C. Sinclair and resource block modelling undertaken by SRK Consulting, Chile. C. Sinclair reviewed and validated the information provided by Hampton and the work undertaken by SRK Consulting, Chile. C. Sinclair is a full time employee of Minera Hampton Chile Limitada, a wholly owned subsidiary of Hampton Mining Limited, and estimated the resources based on the block modelling undertaken by SRK Consulting, Chile. Mr. Sinclair has suffi cient experience (over 30 years) which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defi ned in the 2004 edition of the Australian Code for Reporting Mineral Resources and Ore Reserves. Mr. Sinclair is a Member of the AusIMM and has over 40 years’ experience. Mr. Sinclair is signing off as the competent person for this statement, and consents to the inclusion in the report based on his information in the form and context in which it appears.

The information in this report that relates to Mineral Resources for the Mollacas Project is based on information compiled and reviewed by George G. Even, Principal Geologist of SRK Consulting, Chile (SRK), in Santiago, who is a member of the AusIMM (overseas branch). Mr. Even has suffi cient 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 defi ned in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Even consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Mr. Ernesto Jaramillo, Senior Resource Geologist of SRK Consulting, Chile, performed the updating of the geologic model as well as the estimation and classifi cation of the mineral resources.

The information in this report that relates to Mineral Resources of the Vallecillo gold-zinc deposit is based on information compiled by George G. Even, Principal Geologist of SRK Consulting in Santiago, Chile. Mr. Even a Qualifi ed Person for JORC compliant statements, reviewed the technical information presented in this document. Mr. Ernesto Jaramillo, Principal Resource Geologist with SRK Santiago, performed the resource estimation. Mr. Even has suffi cient experience that is relevant to the style of mineralisation and type of mineral deposit under consideration and to the activity which was undertaken, to make the statements found in this report in the form and context in which they appear.

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ REPORT continued

Corporate

On the corporate front, Metminco achieved a number of signifi cant milestones including completion of 100% ownership of Hampton which together with the earlier acquisition of North Hill secured 100% ownership of the Los Calatos Project located in southern Peru. Hampton’s portfolio of projects also includes a 50% interest in the Vallecillo, Mollacas and Loica projects located in Chile.

During the six month period ended 31 December 2010, Metminco raised funds of A$35 million to fund advancement of Hampton’s projects, complete the acquisition of North Hill and Hampton and for working capital.

On 18 March 2011 Metminco joined the S&P/ASX 300 index which will provide Metminco with the opportunity for stronger institutional investment support and wider investor recognition for the Company’s six assets in Chile and Peru.

Metminco completed the acquisition of a 100% interest in Hampton

During the six month period ended 31 December 2010, Metminco increased its ownership of Hampton from 69.4% to 100% by completing the following transactions:

On 28 July 2010 Metminco increased its ownership of Hampton from 69.4% to 72.6% by acquisition of 5,376,562 fully paid ordinary shares in Hampton from Hampton minorities for consideration of 21,506,248 fully paid ordinary Metminco shares, and accepting its full entitlement in Hampton pro-rata rights off ers for consideration of A$1.66 million.
On 3 December Metminco completed the purchase of 60,970,425 fully paid ordinary Hampton shares (27.3% of Hampton) resulting in Hampton becoming a wholly owned subsidiary of Metminco. Following shareholder approval at the Annual General Meeting on 24 November 2010, 160,000,000 Metminco Shares were issued to Takoradi Limited (Takoradi), 35,000,000 to the Sentient Group, 11,434,076 to Notesan Pty Ltd and 6,400,000 to AJ Holdings Corporation as consideration for the acquisition of the 27.3% interest in Hampton that Metminco did not already own. Takoradi’s consideration included a cash component of A$3.35 million, A$175,000 paid on signing the sale agreement with the remaining A$3.175 million paid on settlement.
Eff ective 3 December 2010, Mr Rodney Hudspeth and Mr Terry Wilsteed, appointees to the Board of Hampton in accordance with a share subscription agreement between Hampton and Takoradi dated April 2006, resigned from the Hampton Board. Mr Hudspeth’s application to the Federal Court to seek leave as a director of Hampton in accordance with section 237 of the Corporations Act to pursue legal action on behalf of Hampton has been subsequently dismissed by the Federal Court.

Capital raisings

During the six months year ended 31 December 2010, Metminco raised A$35 million before costs through issue of shares as follows:

Issue of 9,999,999 shares, raising A$1.5 million and a further 23,333,333 shares to raise A$3.5 million before costs in July 2010.
Issue of 150 million shares to raise A$30 million before costs in November 2010.
Issue of 12,500 converted options to raise A$3,125 and a further 100 shares to raise A$100.

Financial Position

The net assets of the Consolidated Group have increased by $28,231,314 from 30 June 2010 to $134,169,609 as at 31 December 2010. This increase is largely due to the following factors:

Proceeds from share issues raising a total of A$35 million before costs of raising, and
Acquisition of the remaining minority interest in Hampton.

16 METMINCO LIMITED Report for the six months ended 31 December 2010

Managing Director appointed

On 8 December 2010, William Howe was appointed as Managing Director of Metminco. Mr Howe is based in Santiago, Chile. The Company maintains a strong presence through its wholly owned Chilean and Peruvian subsidiaries. Minera Hampton Chile Limitada (Minera Hampton) and Hampton Mining Peru SAC (Hampton Peru).

Hampton, now wholly owned by Metminco, was founded by Mr Howe, who together with a strong exploration team in Chile and Peru, has driven the development of the Company’s portfolio of copper and gold projects from the Company’s base in Chile.

Investec Bank plc appointed as Broker and Nomad to the AIM market

On 8 December 2010, the Company appointed Investec Bank plc as its Nominated Advisor and Broker to the AIM market.

Early Repayment of US$3.5 million Convertible Notes

On 24 December 2010, the Company completed early repayment of convertible notes totalling US$3.5 million by issue of 30,114,160 Metminco Shares in satisfaction of principal and accrued interest to date of repayment. The Company also paid US$560,000 in early repayment fees.

Change of Financial Year

Pursuant to subsections 323D(3) of the Corporation Act 2001 (Cth), Metminco is required to ensure the fi nancial years of its consolidated entities are synchronised with its own fi nancial year. Metminco announced that eff ective 31 December 2010, the Company will change its fi nancial year from 30 June to 31 December in order to synchronise with the Hampton group of companies. The comparative used in the fi nancial report are for the twelve months ended 30 June 2010.

Signifi cant Changes in State of Aff airs

There are no signifi cant changes in the state of aff airs during the period other than as disclosed in the Directors’ Report.

Dividends paid or recommended

No dividends were paid or declared during the period by the Company. The Directors do not recommend paying an interim dividend for the period ended 31 December 2010.

Events subsequent to reporting date

Matters that have arisen between the end of the period and the date of this report of a material or unusual nature likely, in the opinion of the Directors of the Company, to aff ect signifi cantly the operations of the Metminco Group, the results of those operations, or the state of aff airs of the Metminco Group, in future fi nancial years are as follows:

On 16 March 2010, John Fillmore resigned as a Director of the Company after guiding Metminco from its Initial Public Off ering in 2007 to a market capitalisation of over A$500 million.

On 16 March 2010, Antonio Ortuzar Vicuña, a Chilean national and resident was appointed a Director and Chairman of the Company. Mr Ortuzar, a lawyer by profession, is a highly respected fi gure in the global resources sector and has extensive experience and networks in the fi nancial markets in both North and South America as well as in London.

No other events have occurred subsequent to the reporting date which have aff ected, or which may materially aff ect, these fi nancial statements.

The Company accepted its full entitlement in accordance with a Hampton pro rata rights off er dated 26 July 2010 and late August 2010 was allotted 3,509,339 fully paid ordinary Hampton shares for a total cost of A$982,615 increasing its interest in Hampton from 71.9% to 72.6%.

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ REPORT continued

Likely future developments

The Group will continue to focus on exploration activities and further advancement of mineralised deposits in Chile and Peru.

Environmental regulations

The Group’s operations are subject to signifi cant environmental regulations under the laws of Australia, Chile and Peru. The Directors are not aware of any breaches of the legislation during the half year that are material in nature.

In Chile the Environmental Act provides a framework for environmental policy and in Peru environmental policy is governed by the Environmental Regulation for Mining Exploration Projects (Supreme Decree N 020-200-EM).

Information on Directors

John Fillmore Non Executive Chairman (resigned 16 March 2011) QUALIFICATIONS LLB, BComm EXPERIENCE Appointed Chairman in May 2007. Board member since May 2007. John has practiced as a lawyer continuously since his admission in 1977. In 1985 he established his own fi rm, J.A. Fillmore & Co. That fi rm continues under his control today as a boutique legal fi rm providing advice and services to a range of business enterprises both within and outside Australia. John is Chairman or director of a number of unlisted companies in agriculture, fi nancial services, investment, property and several private companies. John holds a Bachelor of Commerce and Bachelor of Laws degrees from the University of Melbourne and is a fellow of the Tax Institute of Australia. INTEREST IN SHARES 2,220,000 ordinary shares in Metminco Limited and 7,099,999 options to acquire shares. AND OPTIONS SPECIAL Member of the audit and remuneration and nomination committees. RESPONSIBILITIES

Antonio Ortúzar Non Executive Chairman (appointed 16 March 2011)

QUALIFICATIONS University Gabriela Mistral (LLB) EXPERIENCE Antonio is a senior partner of Cruzat, Ortúzar & Mackenna Ltda, a member of Baker & McKenzie International, one of the leading law fi rms in Chile. He is also the joint coordinator of the Latin America Energy, Mining, Chemicals and Infrastructure Group. Antonio’s experience includes international joint ventures, project fi nancing, foreign investments, corporate and commercial arrangements, as well as major mining infrastructure projects, mining and telecommunications. He has been involved in the placement of shares in the Chilean stock market, ADRs in the New York Stock Exchange and IPOs in Australia and Canada. Antonio also handles the issuing of bonds, various mining infrastructure issues, and energy and water projects in Chile. He also serves as assistant professor of economic law at Finis Terrae University in Santiago, and is a member of the Chilean Bar Association. He is a former vice president of the Australian-Chilean Chamber of Commerce. Mr Otuzar is a director of Atacama Pacifi c Corporation, a TSX listed company and Baker & McKenzie LLP. INTEREST IN SHARES A related party holds 6,400,000 ordinary shares in Metminco Limited and 3,000,000 options to acquire AND OPTIONS shares. SPECIAL Member of the remuneration and nomination committees. RESPONSIBILITIES

18 METMINCO LIMITED Report for the six months ended 31 December 2010

William Howe Managing Director QUALIFICATIONS B.Sc. FAusIMM EXPERIENCE Appointed as a Director on 17 July 2009 and Managing Director on 8 December 2010. Mr Howe, the founder of Hampton, has over 30 years experience in the mining industry and has worked in Southern and West Africa, Asia, Australia and the USA. He has been instrumental in the development of a number of new mining operations in Australia and Indonesia including the development and management of the fi rst copper heap leach Project in Australia, and an open pit coal mine in South East Kalimantan in Indonesia. He specializes in optimising existing operations and the development of new operations in both underground and open pit mining environments and has extensive experience in mine development, mine management and corporate management. He has worked in many geological and mining environments in several countries around the world and in such commodities as gold, coal, copper, uranium, antimony, chrome and tin. Mr Howe was a founding director of Straits Resources Limited and was Managing Director of Ghana Gold Mines Limited, Hargraves Resources NL and Selwyn Mines Limited. INTEREST IN SHARES 48,264,168 ordinary shares in Metminco Limited. AND OPTIONS

Phillip Wing Director QUALIFICATIONS PhD, MEc, BEc, CPA EXPERIENCE Appointed on 17 July 2009, Dr Wing is the Executive Chairman of a number of special purpose private equity fi rms. He is currently Chairman or non executive Director of six investee companies ranging from mining to medical devices. Until January 2006, Phillip was for 7 years a partner of Technology Venture Partners (TVP), a specialist Institutional Information Technology and Telecommunications venture capital fi rm, and was an active non-executive director on many of TVP’s portfolio companies in Australia and overseas. Prior to joining TVP, Phillip was a senior executive in IBM’s global and Asia Pacifi c management team. He held responsibility for a major industry business unit in Asia and was also General Manager of the IBM (Australia and New Zealand) consulting business. His last role in IBM was as General Manager (Global Services) responsible for strategy, marketing and business development including acquisitions, alliances and business partners. Prior to his career at IBM, Phillip was a partner at Ernst and Young, KPMG Peat Marwick and Touche Ross, specializing in strategy and IT and corporate advisory consulting. Phillip held managing partner roles responsible for the consulting business units and spent two years on secondment as the Chief Information Offi cer of NSW Health. Phillip has worked extensively in the USA, Asia, and Europe. He has a Bachelor and Masters of Economics and has completed a PhD in Organisational Change. He is a member of the Institute of Chartered Accountants, and also an adjunct lecturer with the Centre for Applied Finance (Macquarie University).

INTEREST IN SHARES 15,893,336 ordinary shares in Metminco Limited. AND OPTIONS

William Etheridge Director

QUALIFICATIONS B.Eng, MA (Economics, Cantab) EXPERIENCE Appointed on 17 July 2009. Mr Etheridge has over 35 years experience in the mining and mining fi nance industry, based mainly in Sydney and London. He worked as a mining engineer with Hamersley Iron, and as an economist / business development executive for mining companies in London (Consolidated Gold Fields) and Sydney (Renison Goldfi elds Consolidated). He has also since worked within mining companies (including Hargraves Resources and Selwyn Mines Limited) focusing on mining project scoping, analysis and appraisal, valuation of internal and external opportunities, cut-off grade analysis, project administration, preparation of company reports and investor relations. He also worked in stockbroking (including Merrill Lynch, ABS White and HSBC James Capel) as a resource analyst, covering a range of mining companies, and including experience in equity raising. He has consulted on mining investment opportunities in coal, gold and base metals and has undertaken detailed analysis of a number of mineral commodities.

INTEREST IN SHARES 62,400,000 ordinary shares in Metminco Limited. AND OPTIONS

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ REPORT continued

Information on Directors continued

Timothy Read	Non Executive Director
QUALIFICATIONS	BA (Economics), Fellow of the Chartered Institute for Securities and Investment
EXPERIENCE	Appointed on 1 April 2010, Tim has over forty years experience in the mining and metals sector, f rst
	as a mining analyst, then as an investment banker and, most recently, as a corporate executive and
	director. Between 1995 and 1999, he was Managing Director and Global Co-Head of Mining and Metals
	Investment Banking for Merrill Lynch Inc. and, accordingly has extensive experience of all aspects of
	corporate f nance, particularly M&A and equity capital markets. Between 1999 and 2006, he was the
	chief executive of Adastra Minerals Inc (acquired by First Quantum Minerals in 2006) and since then has
	acted as a non-executive director for several natural resource companies including Cumerio SA (acquired
	by Norddeutsche Af nerie in 2008), Kopane Diamond Developments (until December 2009), Starf eld
	Resources Inc. and Faroe Petroleum plc. Tim is also a Director of Capital Drilling Limited a company listed
	on the London Stock Exchange.
INTEREST IN SHARES	250,000 ordinary fully paid shares in Metminco Limited and 6,000,000 options to acquire shares.
AND OPTIONS
SPECIAL	Chairman of the audit and remuneration and nomination committees.
RESPONSIBILITIES
Francisco	Non Executive Director
Vergara-Irarrazaval
QUALIFICATIONS	Law Degree from the Catholic University of Chile, Fulbright Scholar and undertook graduate studies in
	the Institute of International and Foreign Trade Law of Georgetown University, Washington D.C. and at the
	Law School of Cornell University, Ithaca, New York.
EXPERIENCE	Appointed on 1 April 2010, Francisco has over 30 years experience in the mining industry in Chile and
	other Latin American countries where he was Vice President of Compaò”a Minera El Indio and Compaò”a
	Minera San Josè, subsidiaries of St. Joe Minerals Corporation until 1991. In 1991, he established Vergara
	& Cia, Law Firm, providing legal services to dif erent mining companies and international engineering
	f rms focused in natural resources, energy, shipping, agriculture, and foreign governments through their
	embassies in Chile and has acted as Director of listed companies and Chairman and Director of a number
	of unlisted companies.
INTEREST IN SHARES	50,140,000 ordinary shares in Metminco Limited.
AND OPTIONS
SPECIAL	Member of the audit and remuneration and nomination committees.
RESPONSIBILITIES

Company Secretary

Philip Killen Chief Financial Offi cer/Company Secretary QUALIFICATIONS B.Maths/B.Commerce, CPA EXPERIENCE Mr Killen is a fi nance professional with over 16 years experience in the mining and exploration sector as principal of CPK Consulting and prior to that in various senior executive roles, including Financial Controller of Plutonic Resources Limited and Chief Financial Offi cer of Otter Gold Mines Limited. Previously he was with the Caltex Group for over 10 years in various senior fi nance, audit and technology roles located in Australia and overseas. His experience includes fi nancial modeling to support bankable feasibility studies, development of funding strategies, treasury, statutory and ASX compliance reporting, and implementation of commercial systems. INTEREST IN SHARES 3,949,836 ordinary shares in Metminco Limited and 4,000,000 options to acquire shares. AND OPTIONS

20 METMINCO LIMITED Report for the six months ended 31 December 2010

Meetings of the Board

The Board of Directors held 7 meetings during the period ended 31 December 2010. Attendances of Directors at these meetings are shown in the table below:

DIRECTOR	MEETINGS ATTENDED	ELIGIBLE TO ATTEND BOARD MEETINGS
John Fillmore	7	7
Phillip Wing	6	7
William Howe	6	6
William Etheridge	6	7
Timothy Read	7	7
Francisco Vergara-Irarrazaval	7	7

Meetings of Board Committees

Directors who are members of board committees held each one meeting during the period ended 31 December 2010. Attendances of Directors at these meetings are shown in the table below:

	AUDIT	COMMITTEE	REMUNERATION AND	NOMINATION COMMITTEE
DIRECTOR	MEETINGS ATTENDED	ELIGIBLE TO ATTEND MEETINGS	MEETINGS ATTENDED	ELIGIBLE TO ATTEND MEETINGS
John Fillmore	1	1	1	1
Timothy Read	1	1	1	1
Francisco Vergara-Irarrazaval	–	–	1	1

The Board has also resolved to form an occupational health and safety committee; the membership of this committee is currently being considered.

Indemnifi cation of Directors and Offi cers

Under the provisions of the Constitution of the Company every offi cer (and former offi cer) of the Company is indemnifi ed, to the extent permitted by law, against all costs expenses and liabilities incurred as such an offi cer providing it is in respect of a liability to another person (other than the Company or a related body corporate) where such liability does not arise out of conduct involving a lack of good faith and is in respect of a liability for costs and expenses incurred in defending proceedings in which judgment is given in favour of the offi cer or in which the offi cer is acquitted or is granted relief under the Law.

The Company has paid premiums to insure the Directors and Offi cers against liabilities for costs and expenses incurred by them in defending legal proceedings arising from their conduct while acting in their capacity as offi cers of the Company other than conduct involving a wilful breach of duty in relation to the Company. The premiums amounted to $28,447 for the period ended 31 December 2010 (for the year ended 30 June 2010: $6,538).

Indemnifi cation of Auditors

No indemnities have been given or insurance premiums paid, during or since the end of the half year, for any person who is or has been an auditor of the Company.

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ REPORT continued

Options

At the date of this report, the unissued ordinary shares of Metminco Limited under option are as follows:

Listed options

GRANT DATE	DATE OF EXPIRY	EXERCISE PRICE	NUMBER UNDER OPTION
4 December 2009	4 December 2012	$0.25	1,000,000
4 December 2007	4 December 2012	$0.25	26,217,517
			27,217,517
Unlisted options
GRANT DATE	DATE OF EXPIRY	EXERCISE PRICE	NUMBER UNDER OPTION
29 September 2010	31 July 2012	$0.30	4,500,000
30 December 2010	06 December 2013	$0.44	14,250,000
30 December 2010	06 December 2013	$0.525	14,250,000
30 December 2010	06 December 2013	$0.44	2,000,000
30 December 2010	06 December 2013	$0.525	2,000,000
			37,000,000

Option holders do not have any right to participate in any issues of shares or other interests in the Company or any other entity. There have been no unissued shares or interests under option of any controlled entity within the Group during the reporting period. For details of options issued to directors and executives as remuneration, refer to the Remuneration Report.

Non-audit services

The Board of Directors is satisfi ed that the provision of non-audit services during the period is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfi ed that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

all non-audit services are reviewed prior to commencement to ensure they do not adversely aff ect the integrity and objectivity of the auditor; and
the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

The following fees were paid or payable to Grant Thornton for non-audit services provided during the period ended 31 December 2010:

ber 2010:
	$
Advisory services regarding Employee Share Option Plan	4,500
Chile Tax Review by Grant Thornton Chile	9,756
	14,256

Auditor’s Independence Declaration

The lead auditors’ independence declaration as required under section 307C of the Corporations Act 2001 for the half year ended 31 December 2010 is set out on page 28.

Proceedings on behalf of the Company

No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the half year.

22 METMINCO LIMITED Report for the six months ended 31 December 2010

REMUNERATION REPORT

Remuneration Policy

The remuneration policy of Metminco Limited has been designed to align key management personnel objectives with shareholder and business objectives by providing a fi xed remuneration component and off ering specifi c longterm incentives based on key performance areas aff ecting the Company’s fi nancial results. The Board of Metminco Limited believes the remuneration policy to be appropriate and eff ective in its ability to attract and retain the best key management personnel to run and manage the Company, as well as create goal congruence between directors, executives and shareholders.

The Board’s policy for determining the nature and amount of remuneration for key management personnel of the Company is as follows:

The remuneration policy is to be developed by the remuneration and nomination committee and approved by the Board in consideration with professional advise from independent external consultants.
The remuneration and nomination committee reviews key management personnel packages annually by reference to the Company´s performance, executive performance and comparable information from industry sectors.

The performance of key management personnel is measured against criteria agreed with each executive. The Board may, however, exercise its discretion in relation to approving incentives, bonuses and options, and can recommend changes to the Committee’s recommendations. The policy is designed to attract the highest calibre of executives and reward them for performance results leading to long-term growth in shareholder wealth.

Key Australian resident management personnel receive a superannuation guarantee contribution required by the Superannuation Guarantee legislation, and do not receive any other retirement benefi ts.

Upon retirement, key management personnel are paid employee benefi t entitlements accrued to the date of retirement. All remuneration paid to key management personnel is valued at the cost to the Company and expensed.

The Board’s policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The remuneration and nomination committee determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting.

Performance based Remuneration

The Company does not currently have a performance based remuneration scheme for directors. The Company has provided some performance based remuneration to directors for the period. The Company does provide performance based remuneration to certain key executives of the Group.

Employment Details of Members of Key Management Personnel and Other Executives

The following table provides employment details of persons who were, during the half year, members of key management personnel of the Group. The table also illustrates the proportion of remuneration that was performance and non-performance based and the proportion of remuneration received in the form of options.

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ REPORT continued

REMUNERATION REPORT continued

			PROPORTIONS OF	ELEMENTS OF
		PROPORTIONS OF ELEMENTS	REMUNERATION NOT RELATED TO
		OF REMUNERATION RELATED TO PERFORMANCE	PERFORMANCE
POSITION HELD AS AT	CONTRACT DETAILS	NON-SALARY
31 DECEMBER 2010 AND	(DURATION AND	CASH-BASED	FIXED SALARY/
ANY CHANGE DURING THE YEAR	TERMINATION)	INCENTIVES SHARES/UNITS OPTIONS/RIGHTS	FEES	TOTAL
		% % %	%	%
Group Key Management Personnel John Fillmore Chairman	No written contract	– – 92	8	100
William Howe Managing Director	No f xed term	– – –	100	100
(appointed 6 December 2010) Philip Wing Non Executive Director	Written contract	– – –	100	100
William Etheridge Director	No written contract	– – –	100	100
Tim Read Non Executive Director	No written contract	– – 94	4	100
Francisco Vergara- Non Executive Director	No written contract	– – –	100	100
Irarrazaval Philip Killen CFO and Company	No f xed term	– – 74	26	100
Secretary Colin Sinclair General Manager	No f xed term	– – 76	24	100
Exploration Keith Weston Exploration Manager Peru	Fixed term	– – 74	26	100

The employment terms and conditions of key management personnel are usually formalised in contracts of employment.

Terms of employment require that the relevant group entity provide an executive with their contractual entitlements.

A contracted person employed on a permanent basis may terminate their employment in accordance with their contract. Termination payments are not payable on resignation or under the circumstances of unsatisfactory performance.

Non-executive directors are not subject to contracts. Termination payments are at the discretion of the remuneration and nomination committee.

Changes in Directors and Executives Subsequent to 31 December 2010

John Fillmore resigned as a Director and Chairman of the Company and Antonio Ortúzar was appointed a Director and Chairman of the Company on 16 March 2011. There were no other changes in Directors or Executives subsequent to 31 December 2010.

24 METMINCO LIMITED Report for the six months ended 31 December 2010

Remuneration Details for the period to 31 December 2010

The following table of benefi ts and payments details, in respect to the fi nancial year, the components of remuneration for each member of the key management personnel of the Consolidated Group:

==> picture [483 x 445] intentionally omitted <==

----- Start of picture text -----

CASH-
SETTLED
EQUITY-SETTLED SHARE-
POST-EMPLOYMENT LONG-TERM SHARE-BASED BASED TERMINATION
SHORT-TERM BENEFITS BENEFITS BENEFITS PAYMENTS PAYMENTS BENEFITS TOTAL
PENSION
PROFIT AND
SALARY, FEES SHARE AND NON- SUPER- INCENTIVE SHARES/ OPTIONS/
AND LEAVE BONUSES MONETARY OTHER ANNUATION OTHER PLANS LSL UNITS RIGHTS
$ $ $ $ $ $ $ $ $ $ $ $ $
Group Key Management Personnel
John Fillmore Dec 2010 43,000 – – – – – – – – 505,554 – – 548,554
Jun 2010 72,000 – – – – – – – – – – – 72,000
William Howe Dec 2010 200,000 – – – – – – – – – – – 200,000
Jun 2010 87,500 – – – – – – – – – – – 87,500
Phillip Wing Dec 2010 121,250 – – – – – – – – – – – 121,250
Jun 2010 372,782 – – – – – – – – – – – 372,782
William Dec 2010 103,593 – – – 9,323 – – – – – – – 112,916
Etheridge Jun 2010 145,260 – – – 13,073 – – – – – – – 158,333
Tim Read Dec 2010 40,773 – – – – – – – – 505,554 – – 546,327
Jun 2010 60,766 – – – – – – – – – – – 60,766
Francisco Dec 2010 31,251 – – – – – – – – – – – 31,251
Vergara-
Irarrazaval Jun 2010 12,501 – – – – – – – – – – – 12,501
Philip Killen Dec 2010 116,250 – – – – – – – – 337,036 – – 453,286
Jun 2010 99,312 – – – 4,438 – – – – – – – 103,750
Colin Sinclair Dec 2010 132,500 – – – – – – – – 421,295 – – 553,795
Jun 2010 57,500 – – – – – – – – – – – 57,500
Keith Weston Dec 2010 87,500 – – – – – – – – 252,777 – – 340,277
Jun 2010 113,750 14,000 – – 6,417 – – – – – – – 134,167
Shane Turner Dec 2010 – – – – – – – – – – – – –
Jun 2010 15,604 – – – 1,288 – – – – 53,000 – – 69,892
Total Key Dec 2010 876,117 – – – 9,323 – – – – 2,022,216 – – 2,907,656
Management Personnel Jun 2010 1,036,975 14,000 – – 25,216 – – – – 53,000 – – 1,129,191
----- End of picture text -----

Securities received that are not performance-related

No members of key management personnel are entitled to receive securities which are not performance-based as part of their remuneration package.

Cash bonuses, performance-related bonuses and share-based payments

No cash bonus or share-based payments were paid during the half year.

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ REPORT continued

REMUNERATION REPORT continued

Options and rights issued, granted and exercised

Following shareholder approval at the Annual General Meeting on 24 November 2010, the Company issued options to directors and key management personnel under terms and conditions set out in the Employee Share Option Plan as follows:

John Fillmore:

3,000,000 options exercisable at A$0.44 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.
3,000,000 options exercisable at A$0.525 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.

Timothy Read:

3,000,000 options exercisable at A$0.44 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.
3,000,000 options exercisable at A$0.525 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.

Colin Sinclair:

2,500,000 options exercisable at A$0.44 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.
2,500,000 options exercisable at A$0.525 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.

Philip Killen:

2,000,000 options exercisable at A$0.44 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.
2,000,000 options exercisable at A$0.525 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.

Keith Weston:

1,500,000 options exercisable at A$0.44 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.
1,500,000 options exercisable at A$0.525 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.

Other employees:

2,500,000 options exercisable at A$0.44 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.
2,500,000 options exercisable at A$0.525 per share no later than 6 December 2013 in accordance with the rules of the Company’s Employee Option Plan.

The options have been included in employee and director’s benefi ts expense in the statement of comprehensive income. The options have been valued using the Binomial method based share price of $0.35 (based on the Company’s 30 Day Weighted Average Price as at 6 December 2010), interest rate of 4.75%, 70% volatility, the terms of the options and an estimated option life to 31 March 2012 based on the Company’s best estimate of the expected exercise patterns, which may not eventuate. The options are not transferrable, the expiry date is contingent on a number of terms and conditions set out the in the Employee Share Option Plan and the holder will only realise a benefi t through exercise of the options.

There were no other options or rights issued or granted to directors and employess, or exercised by directors and employees during the year.

26 METMINCO LIMITED Report for the six months ended 31 December 2010

Options

Option holders do not have any rights to participate in any issues of shares or other interests in the Company. For details of options issued to directors and executives as remuneration, refer to the Remuneration Report.

This Report of the directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of directors.

==> picture [99 x 62] intentionally omitted <==

William Howe Managing Director

31 March 2011 Sydney

==> picture [40 x 842] intentionally omitted <==

AUDITOR’S INDEPENDENCE DECLARATION to the Directors of Metminco Limited

==> picture [132 x 26] intentionally omitted <==

Grant Thornton Audit Pty Ltd ACN 130 913 594

Level 17, 383 Kent Street Sydney NSW 2000 PO Locked Bag Q800 QVB Post Offi ce Sydney NSW 1230

T +61 2 8297 2400 F +61 2 9299 4445 E [email protected] W www.grantthornton.com.au

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Metminco Limited for the year ended 31 December 2010, I declare that, to the best of my knowledge and belief, there have been:

a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

b no contraventions of any applicable code of professional conduct in relation to the audit.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

A G Rigele Director – Audit & Assurance Sydney, 31 March 2011

Grant Thornton Australia Limited is a member fi rm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member fi rms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards Legislation

28 METMINCO LIMITED Report for the six months ended 31 December 2010

STATEMENTS OF COMPREHENSIVE INCOME for the six months ended 31 December 2010

NOTE CONSOLIDATED GROUP COMPANY 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ Revenue Other revenue 2 67,695 51,297 66,341 47,469 Gain on consolidation of subsidiary – 600,062 – – Fair value loss on convertible notes (5,882,403) (2,185,129) (5,882,403) (2,185,129) Fair value adjustment on equity swap 2,210,160 (96,625) 2,210,160 (96,625) Realised gain on equity swap 327,868 – 327,868 – Finance costs (1,290,843) (360,810) (1,290,843) (360,810) Foreign exchange gain/(loss) (334,224) 170,942 (494,727) (13,436) Administration expenses (3,760,239) (1,324,707) (2,991,149) (973,826) Corporate expenses (2,571,390) (2,165,748) (2,273,960) (1,918,786) Occupancy expense (89,966) (85,067) (31,191) (52,403) Exploration expenditure impaired (9,875) (1,588,013) 249 (1,144,664) Share of net loss of associates and joint ventures (7,181) (793,156) – – Loss before income tax 3 (11,340,398) (7,776,592) (10,359,655) (6,697,848) Income tax expense 4 – – – – Loss for the year (11,340,398) (7,776,592) (10,359,655) (6,697,848) Other comprehensive income Exchange dif erences on translating foreign controlled entities (3,612,522) 1,599,074 – – Total comprehensive loss for the year (14,952,920) (6,177,518) (10,359,655) (6,697,848) Loss attributable to: Members of the parent entity (11,140,906) (7,508,615) (10,359,655) (6,697,848) Non controlling interests (199,492) (267,977) – – (11,340,398) (7,776,592) (10,359,655) (6,697,848) Total comprehensive loss attributable to: Members of the parent entity (13,767,291) (6,398,667) (10,359,655) (6,697,848) Non controlling interests (1,185,629) 221,149 – – (14,952,920) (6,177,518) (10,359,655) (6,697,848) Loss per share From continuing operations: Basic loss per share (cents) 7 (1.25) (1.70) Diluted loss per share 7 (1.25) (1.70)	NOTE CONSOLIDATED GROUP COMPANY 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ Revenue Other revenue 2 67,695 51,297 66,341 47,469 Gain on consolidation of subsidiary – 600,062 – – Fair value loss on convertible notes (5,882,403) (2,185,129) (5,882,403) (2,185,129) Fair value adjustment on equity swap 2,210,160 (96,625) 2,210,160 (96,625) Realised gain on equity swap 327,868 – 327,868 – Finance costs (1,290,843) (360,810) (1,290,843) (360,810) Foreign exchange gain/(loss) (334,224) 170,942 (494,727) (13,436) Administration expenses (3,760,239) (1,324,707) (2,991,149) (973,826) Corporate expenses (2,571,390) (2,165,748) (2,273,960) (1,918,786) Occupancy expense (89,966) (85,067) (31,191) (52,403) Exploration expenditure impaired (9,875) (1,588,013) 249 (1,144,664) Share of net loss of associates and joint ventures (7,181) (793,156) – – Loss before income tax 3 (11,340,398) (7,776,592) (10,359,655) (6,697,848) Income tax expense 4 – – – – Loss for the year (11,340,398) (7,776,592) (10,359,655) (6,697,848) Other comprehensive income Exchange dif erences on translating foreign controlled entities (3,612,522) 1,599,074 – – Total comprehensive loss for the year (14,952,920) (6,177,518) (10,359,655) (6,697,848) Loss attributable to: Members of the parent entity (11,140,906) (7,508,615) (10,359,655) (6,697,848) Non controlling interests (199,492) (267,977) – – (11,340,398) (7,776,592) (10,359,655) (6,697,848) Total comprehensive loss attributable to: Members of the parent entity (13,767,291) (6,398,667) (10,359,655) (6,697,848) Non controlling interests (1,185,629) 221,149 – – (14,952,920) (6,177,518) (10,359,655) (6,697,848) Loss per share From continuing operations: Basic loss per share (cents) 7 (1.25) (1.70) Diluted loss per share 7 (1.25) (1.70)	NOTE CONSOLIDATED GROUP COMPANY 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ Revenue Other revenue 2 67,695 51,297 66,341 47,469 Gain on consolidation of subsidiary – 600,062 – – Fair value loss on convertible notes (5,882,403) (2,185,129) (5,882,403) (2,185,129) Fair value adjustment on equity swap 2,210,160 (96,625) 2,210,160 (96,625) Realised gain on equity swap 327,868 – 327,868 – Finance costs (1,290,843) (360,810) (1,290,843) (360,810) Foreign exchange gain/(loss) (334,224) 170,942 (494,727) (13,436) Administration expenses (3,760,239) (1,324,707) (2,991,149) (973,826) Corporate expenses (2,571,390) (2,165,748) (2,273,960) (1,918,786) Occupancy expense (89,966) (85,067) (31,191) (52,403) Exploration expenditure impaired (9,875) (1,588,013) 249 (1,144,664) Share of net loss of associates and joint ventures (7,181) (793,156) – – Loss before income tax 3 (11,340,398) (7,776,592) (10,359,655) (6,697,848) Income tax expense 4 – – – – Loss for the year (11,340,398) (7,776,592) (10,359,655) (6,697,848) Other comprehensive income Exchange dif erences on translating foreign controlled entities (3,612,522) 1,599,074 – – Total comprehensive loss for the year (14,952,920) (6,177,518) (10,359,655) (6,697,848) Loss attributable to: Members of the parent entity (11,140,906) (7,508,615) (10,359,655) (6,697,848) Non controlling interests (199,492) (267,977) – – (11,340,398) (7,776,592) (10,359,655) (6,697,848) Total comprehensive loss attributable to: Members of the parent entity (13,767,291) (6,398,667) (10,359,655) (6,697,848) Non controlling interests (1,185,629) 221,149 – – (14,952,920) (6,177,518) (10,359,655) (6,697,848) Loss per share From continuing operations: Basic loss per share (cents) 7 (1.25) (1.70) Diluted loss per share 7 (1.25) (1.70)
	(11,340,398) (7,776,592) (10,359,655) – – –	(6,697,848) –
	(11,340,398) (7,776,592) (10,359,655)	(6,697,848)
	(3,612,522) 1,599,074 –	–
	(14,952,920) (6,177,518) (10,359,655)	(6,697,848)
	(11,140,906) (7,508,615) (10,359,655) (199,492) (267,977) –	(6,697,848) –
	(11,340,398) (7,776,592) (10,359,655)	(6,697,848)
	(13,767,291) (6,398,667) (10,359,655) (1,185,629) 221,149 –	(6,697,848) –
	(14,952,920) (6,177,518) (10,359,655)	(6,697,848)

The fi nancial statements should be read in conjunction with the accompanying notes

==> picture [40 x 842] intentionally omitted <==

STATEMENTS OF FINANCIAL POSITION as at 31 December 2010

NOTE CONSOLIDATED GROUP COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ ASSETS Current assets Cash and cash equivalents 8 23,189,432 2,159,428 21,572,370 1,189,206 Trade and other receivables 9 1,999,828 2,317,751 1,851,497 1,999,915 Equity swap derivative 9 1,648,388 – 1,648,388 – Other assets 10 196,571 215,694 158,537 158,537 Total current assets 27,034,219 4,692,873 25,230,792 3,347,658 Non-current assets Trade and other receivables 9 3,340,018 4,132,878 951,292 1,864,078 Equity swap derivative 9 465,147 (96,625) 465,147 (96,625) Financial assets 11 – – 155,085,360 100,561,933 Investments accounted for using equity method 12 4,160,154 5,053,371 – – Property, plant and equipment 15 669,378 820,461 6,084 2,883 Exploration and evaluation expenditure 16 102,297,461 101,608,247 – – Total non-current assets 110,932,158 111,518,332 156,507,883 102,332,269 TOTAL ASSETS 137,966,377 116,211,205 181,738,675 105,679,927 LIABILITIES Current liabilities Trade and other payables 17 2,021,494 3,350,183 1,249,815 2,756,220 Short term provisions 19 73,382 68,519 2,242 23,036 Total current liabilities 2,094,876 3,418,702 1,252,057 2,779,256 Non-current liabilities Borrowings 18 1,701,892 6,854,208 1,701,892 6,854,208 Total non-current liabilities 1,701,892 6,854,208 1,701,892 6,854,208 TOTAL LIABILITIES 3,796,768 10,272,910 2,953,949 9,633,464 NET ASSETS 134,169,609 105,938,295 178,784,726 96,046,463 EQUITY Issued capital 20 196,501,824 106,133,934 196,501,824 106,133,934 Reserves 29 (39,990,443) 1,412,576 3,032,656 302,628 Accumulated losses (22,341,772) (11,200,866) (20,749,754) (10,390,099) Parent interest 134,169,609 96,345,644 178,784,726 96,046,463 Non-controlling interest – 9,592,651 – – TOTAL EQUITY 134,169,609 105,938,295 178,784,726 96,046,463	NOTE CONSOLIDATED GROUP COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ ASSETS Current assets Cash and cash equivalents 8 23,189,432 2,159,428 21,572,370 1,189,206 Trade and other receivables 9 1,999,828 2,317,751 1,851,497 1,999,915 Equity swap derivative 9 1,648,388 – 1,648,388 – Other assets 10 196,571 215,694 158,537 158,537 Total current assets 27,034,219 4,692,873 25,230,792 3,347,658 Non-current assets Trade and other receivables 9 3,340,018 4,132,878 951,292 1,864,078 Equity swap derivative 9 465,147 (96,625) 465,147 (96,625) Financial assets 11 – – 155,085,360 100,561,933 Investments accounted for using equity method 12 4,160,154 5,053,371 – – Property, plant and equipment 15 669,378 820,461 6,084 2,883 Exploration and evaluation expenditure 16 102,297,461 101,608,247 – – Total non-current assets 110,932,158 111,518,332 156,507,883 102,332,269 TOTAL ASSETS 137,966,377 116,211,205 181,738,675 105,679,927 LIABILITIES Current liabilities Trade and other payables 17 2,021,494 3,350,183 1,249,815 2,756,220 Short term provisions 19 73,382 68,519 2,242 23,036 Total current liabilities 2,094,876 3,418,702 1,252,057 2,779,256 Non-current liabilities Borrowings 18 1,701,892 6,854,208 1,701,892 6,854,208 Total non-current liabilities 1,701,892 6,854,208 1,701,892 6,854,208 TOTAL LIABILITIES 3,796,768 10,272,910 2,953,949 9,633,464 NET ASSETS 134,169,609 105,938,295 178,784,726 96,046,463 EQUITY Issued capital 20 196,501,824 106,133,934 196,501,824 106,133,934 Reserves 29 (39,990,443) 1,412,576 3,032,656 302,628 Accumulated losses (22,341,772) (11,200,866) (20,749,754) (10,390,099) Parent interest 134,169,609 96,345,644 178,784,726 96,046,463 Non-controlling interest – 9,592,651 – – TOTAL EQUITY 134,169,609 105,938,295 178,784,726 96,046,463	NOTE CONSOLIDATED GROUP COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ ASSETS Current assets Cash and cash equivalents 8 23,189,432 2,159,428 21,572,370 1,189,206 Trade and other receivables 9 1,999,828 2,317,751 1,851,497 1,999,915 Equity swap derivative 9 1,648,388 – 1,648,388 – Other assets 10 196,571 215,694 158,537 158,537 Total current assets 27,034,219 4,692,873 25,230,792 3,347,658 Non-current assets Trade and other receivables 9 3,340,018 4,132,878 951,292 1,864,078 Equity swap derivative 9 465,147 (96,625) 465,147 (96,625) Financial assets 11 – – 155,085,360 100,561,933 Investments accounted for using equity method 12 4,160,154 5,053,371 – – Property, plant and equipment 15 669,378 820,461 6,084 2,883 Exploration and evaluation expenditure 16 102,297,461 101,608,247 – – Total non-current assets 110,932,158 111,518,332 156,507,883 102,332,269 TOTAL ASSETS 137,966,377 116,211,205 181,738,675 105,679,927 LIABILITIES Current liabilities Trade and other payables 17 2,021,494 3,350,183 1,249,815 2,756,220 Short term provisions 19 73,382 68,519 2,242 23,036 Total current liabilities 2,094,876 3,418,702 1,252,057 2,779,256 Non-current liabilities Borrowings 18 1,701,892 6,854,208 1,701,892 6,854,208 Total non-current liabilities 1,701,892 6,854,208 1,701,892 6,854,208 TOTAL LIABILITIES 3,796,768 10,272,910 2,953,949 9,633,464 NET ASSETS 134,169,609 105,938,295 178,784,726 96,046,463 EQUITY Issued capital 20 196,501,824 106,133,934 196,501,824 106,133,934 Reserves 29 (39,990,443) 1,412,576 3,032,656 302,628 Accumulated losses (22,341,772) (11,200,866) (20,749,754) (10,390,099) Parent interest 134,169,609 96,345,644 178,784,726 96,046,463 Non-controlling interest – 9,592,651 – – TOTAL EQUITY 134,169,609 105,938,295 178,784,726 96,046,463
	27,034,219 4,692,873 25,230,792	3,347,658
	3,340,018 4,132,878 951,292 465,147 (96,625) 465,147 – – 155,085,360 4,160,154 5,053,371 – 669,378 820,461 6,084 102,297,461 101,608,247 –	1,864,078 (96,625) 100,561,933 – 2,883 –
	110,932,158 111,518,332 156,507,883	102,332,269
	137,966,377 116,211,205 181,738,675	105,679,927
	2,021,494 3,350,183 1,249,815 73,382 68,519 2,242	2,756,220 23,036
	2,094,876 3,418,702 1,252,057	2,779,256
	1,701,892 6,854,208 1,701,892	6,854,208
	1,701,892 6,854,208 1,701,892	6,854,208
	3,796,768 10,272,910 2,953,949	9,633,464
	134,169,609 105,938,295 178,784,726	96,046,463
	196,501,824 106,133,934 196,501,824 (39,990,443) 1,412,576 3,032,656 (22,341,772) (11,200,866) (20,749,754)	106,133,934 302,628 (10,390,099)
	134,169,609 96,345,644 178,784,726 – 9,592,651 –	96,046,463 –
	134,169,609 105,938,295 178,784,726	96,046,463

The Net Assets of the Company are in excess of the Consolidated Group due primarily to the acquisition of Hampton minority interests being recorded at carrying value in the Consoldiated Group whereas in the Company the acquistion has been recorded at cost.

The fi nancial statements should be read in conjunction with the accompanying notes

30 METMINCO LIMITED Report for the six months ended 31 December 2010

STATEMENTS OF CHANGES IN EQUITY for the six months ended 31 December 2010

				FOREIGN
				CURRENCY		NON-
		ACCUMULATED	OPTION	TRANSLATION	ACQUISITION	CONTROLLING
	ISSUED CAPITAL	LOSSES	RESERVE	RESERVE	RESERVE	INTERESTS	TOTAL
	$	$	$	$		$	$
Consolidated Group
Total equity as at 1 July 2009	5,399,061	(3,692,251)	249,628	–	–	–	1,956,438
Loss attributable to members of the
parent entity	–	(7,508,615)	–	–	–	–	(7,508,615)
Loss attributable to non-controlling
interest	–	–	–	–	–	(267,977)	(267,977)
Other comprehensive income Total comprehensive loss Recognition of non-controlling interest in Hampton Options issued to director Shares issued during the period Transaction costs Balance as at 30 June 2010 Total equity as at 1 July 2010 Loss attributable to members of the parent entity Loss attributable to non-controlling interests Other comprehensive income	– – – – 101,901,908 (1,167,035) 106,133,934 106,133,934 – – –	– (7,508,615) – – – – (11,200,866) (11,200,866) (11,140,906) – –	– – – 53,000 – – 302,628 302,628 – – –	1,109,948 1,109,948 – – – – 1,109,948 1,109,948 – – (2,626,385)	– – – – – – – – – – –	489,126 221,149 9,371,502 – – – 9,592,651 9,592,651 – (199,492) (986,137)	1,599,074 (6,177,518) 9,371,502 53,000 101,901,908 (1,167,035) 105,938,295 105,938,295 (11,140,906) (199,492) (3,612,522)
Total comprehensive loss Acquisition of minority interest Options issued to directors and employees and service providers Shares issued during the period Transaction costs Balance as at 31 December 2010	– – – 92,232,755 (1,864,865) 196,501,824	(11,140,906) – – – – (22,341,772)	– – 2,730,028 – – 3,032,656	(2,626,385) – – – – (1,516,437)	– (41,506,662) – – – (41,506,662)	(1,185,629) (8,407,022) – – – –	(14,952,920) (49,913,684) 2,730,028 92,232,755 (1,864,865) 134,169,609

The fi nancial statements should be read in conjunction with the accompanying notes

==> picture [40 x 842] intentionally omitted <==

STATEMENTS OF CHANGES IN EQUITY for the six months ended 31 December 2010 continued

ISSUED CAPITAL ACCUMULATED LOSSES OPTION RESERVE FOREIGN CURRENCY TRANSLATION RESERVE ACQUISITION RESERVE NON- CONTROLLING INTERESTS $ $ $ $ $ Company Total equity as at 1 July 2009 5,399,061 (3,692,251) 249,628 – – – Loss attributable to members of the parent entity – (6,697,848) – – – – Total comprehensive loss – (6,697,848) – – – – Shares issued during the period 101,901,908 – – – – – Transaction costs (1,167,035) – – – – – Options issued to director – – 53,000 – – – Balance as at 30 June 2010 106,133,934 (10,390,099) 302,628 – – – Total equity as at 1 July 2010 106,133,934 (10,390,099) 302,628 – – – Loss attributable to members of the parent entity – (10,359,655) – – – – Total comprehensive loss – (10,359,655) – – – – Shares issued during the period 92,232,755 – – – – – Transaction costs (1,864,865) – – – – – Options issued to directors and employees and service providers – – 2,730,028 – – – Balance as at 31 December 2010 196,501,824 (20,749,754) 3,032,656 – – –	ISSUED CAPITAL ACCUMULATED LOSSES OPTION RESERVE FOREIGN CURRENCY TRANSLATION RESERVE ACQUISITION RESERVE NON- CONTROLLING INTERESTS $ $ $ $ $ Company Total equity as at 1 July 2009 5,399,061 (3,692,251) 249,628 – – – Loss attributable to members of the parent entity – (6,697,848) – – – – Total comprehensive loss – (6,697,848) – – – – Shares issued during the period 101,901,908 – – – – – Transaction costs (1,167,035) – – – – – Options issued to director – – 53,000 – – – Balance as at 30 June 2010 106,133,934 (10,390,099) 302,628 – – – Total equity as at 1 July 2010 106,133,934 (10,390,099) 302,628 – – – Loss attributable to members of the parent entity – (10,359,655) – – – – Total comprehensive loss – (10,359,655) – – – – Shares issued during the period 92,232,755 – – – – – Transaction costs (1,864,865) – – – – – Options issued to directors and employees and service providers – – 2,730,028 – – – Balance as at 31 December 2010 196,501,824 (20,749,754) 3,032,656 – – –	TOTAL $ 1,956,438 (6,697,848)
	– (6,697,848) – – – – 101,901,908 – – – – – (1,167,035) – – – – – – – 53,000 – – –	(6,697,848) 101,901,908 (1,167,035) 53,000
	106,133,934 (10,390,099) 302,628 – – –	96,046,463
	106,133,934 (10,390,099) 302,628 – – – – (10,359,655) – – – –	96,046,463 (10,359,655)
	– (10,359,655) – – – – 92,232,755 – – – – – (1,864,865) – – – – – – – 2,730,028 – – –	(10,359,655) 92,232,755 (1,864,865) 2,730,028
	196,501,824 (20,749,754) 3,032,656 – – –	178,784,726

The fi nancial statements should be read in conjunction with the accompanying notes

32 METMINCO LIMITED Report for the six months ended 31 December 2010

STATEMENTS OF CASH FLOWS for the six months ended 31 December 2010

NOTE CONSOLIDATED GROUP COMPANY 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ Cash f ows from operating activities Payments to suppliers and employees (3,623,291) (3,146,544) (2,923,350) (2,180,445) Interest received 67,695 50,554 64,341 46,727 Finance costs paid (560,486) (173,304) (558,488) (173,304) Net cash used in operating activities 25(b) (4,116,082) (3,269,294) (3,417,497) (2,307,022) Cash f ows from investing activities Purchase of property, plant and equipment (11,160) (1,298) (5,158) (1,298) Payments for exploration expenditure (3,388,351) (1,450,772) – (108,701) Proceeds from sale of assets – 13,998 – 13,998 Payment for subsidiary net of cash acquired (5,010,762) (13,945,118) (9,560,968) (17,003,250) Net cash used in investing activities (8,410,273) (15,383,190) (9,566,126) (17,099,251) Cash f ows from f nancing activities Proceeds from issue of shares 35,003,160 16,067,225 35,003,160 16,067,225 Proceeds in respect to capital raisings (1,864,865) 4,407,334 (1,864,865) (4,407,334 Proceeds from borrowing – (1,167,035) (1,167,035) (1,167,035) Proceeds from equity swap 1,026,086 156,251 1,062,086 156,251 Proceeds from issue of shares to non-controlling interest 29,068 31,584 – – Net cash provided by f nancing activities 34,193,449 19,495,359 34,164,381 19,463,775 Net increase in cash and cash equivalents held 21,667,094 842,875 21,180,758 57,502 Cash and cash equivalents at beginning of the period 2,159,428 991,713 1,189,206 991,713 Ef ect of exchange rates on cash holdings in foreign currencies (637,090) 324,840 (797,594) 139,991 Cash and cash equivalents at 31 December 2010 25(a) 23,189,432 2,159,428 21,572,370 1,189,206	NOTE CONSOLIDATED GROUP COMPANY 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ Cash f ows from operating activities Payments to suppliers and employees (3,623,291) (3,146,544) (2,923,350) (2,180,445) Interest received 67,695 50,554 64,341 46,727 Finance costs paid (560,486) (173,304) (558,488) (173,304) Net cash used in operating activities 25(b) (4,116,082) (3,269,294) (3,417,497) (2,307,022) Cash f ows from investing activities Purchase of property, plant and equipment (11,160) (1,298) (5,158) (1,298) Payments for exploration expenditure (3,388,351) (1,450,772) – (108,701) Proceeds from sale of assets – 13,998 – 13,998 Payment for subsidiary net of cash acquired (5,010,762) (13,945,118) (9,560,968) (17,003,250) Net cash used in investing activities (8,410,273) (15,383,190) (9,566,126) (17,099,251) Cash f ows from f nancing activities Proceeds from issue of shares 35,003,160 16,067,225 35,003,160 16,067,225 Proceeds in respect to capital raisings (1,864,865) 4,407,334 (1,864,865) (4,407,334 Proceeds from borrowing – (1,167,035) (1,167,035) (1,167,035) Proceeds from equity swap 1,026,086 156,251 1,062,086 156,251 Proceeds from issue of shares to non-controlling interest 29,068 31,584 – – Net cash provided by f nancing activities 34,193,449 19,495,359 34,164,381 19,463,775 Net increase in cash and cash equivalents held 21,667,094 842,875 21,180,758 57,502 Cash and cash equivalents at beginning of the period 2,159,428 991,713 1,189,206 991,713 Ef ect of exchange rates on cash holdings in foreign currencies (637,090) 324,840 (797,594) 139,991 Cash and cash equivalents at 31 December 2010 25(a) 23,189,432 2,159,428 21,572,370 1,189,206	NOTE CONSOLIDATED GROUP COMPANY 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ Cash f ows from operating activities Payments to suppliers and employees (3,623,291) (3,146,544) (2,923,350) (2,180,445) Interest received 67,695 50,554 64,341 46,727 Finance costs paid (560,486) (173,304) (558,488) (173,304) Net cash used in operating activities 25(b) (4,116,082) (3,269,294) (3,417,497) (2,307,022) Cash f ows from investing activities Purchase of property, plant and equipment (11,160) (1,298) (5,158) (1,298) Payments for exploration expenditure (3,388,351) (1,450,772) – (108,701) Proceeds from sale of assets – 13,998 – 13,998 Payment for subsidiary net of cash acquired (5,010,762) (13,945,118) (9,560,968) (17,003,250) Net cash used in investing activities (8,410,273) (15,383,190) (9,566,126) (17,099,251) Cash f ows from f nancing activities Proceeds from issue of shares 35,003,160 16,067,225 35,003,160 16,067,225 Proceeds in respect to capital raisings (1,864,865) 4,407,334 (1,864,865) (4,407,334 Proceeds from borrowing – (1,167,035) (1,167,035) (1,167,035) Proceeds from equity swap 1,026,086 156,251 1,062,086 156,251 Proceeds from issue of shares to non-controlling interest 29,068 31,584 – – Net cash provided by f nancing activities 34,193,449 19,495,359 34,164,381 19,463,775 Net increase in cash and cash equivalents held 21,667,094 842,875 21,180,758 57,502 Cash and cash equivalents at beginning of the period 2,159,428 991,713 1,189,206 991,713 Ef ect of exchange rates on cash holdings in foreign currencies (637,090) 324,840 (797,594) 139,991 Cash and cash equivalents at 31 December 2010 25(a) 23,189,432 2,159,428 21,572,370 1,189,206
	(4,116,082) (3,269,294) (3,417,497)	(2,307,022)
		(1,298) (108,701) 13,998 (17,003,250)
	(8,410,273) (15,383,190) (9,566,126)	(17,099,251)
	35,003,160 16,067,225 35,003,160 (1,864,865) 4,407,334 (1,864,865) – (1,167,035) (1,167,035) 1,026,086 156,251 1,062,086 29,068 31,584 –	16,067,225 (4,407,334 (1,167,035) 156,251 –
	34,193,449 19,495,359 34,164,381	19,463,775
		57,502 991,713 139,991
	23,189,432 2,159,428 21,572,370	1,189,206

The fi nancial statements should be read in conjunction with the accompanying notes

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

This fi nancial report includes the consolidated fi nancial statements and notes of Metminco Limited and controlled entities for the six month period ended 31 December 2010 (“Consolidated Group” or “Group”) and the separate fi nancial statements and notes of Metminco Limited as an individual parent entity (“Parent Entity” or “Company”) for the half year ended 31 December 2010. The Company has applied Australian Securities & Investment Commission class order CO 10/654 in the preparation of the fi nancial statements. CO 10/654 permits entities to continue to include parent entity fi nancial statements in their fi nancial reports. Entities taking advantage of the relief are not required to present the summary parent entity information otherwise required by regulation 2M.3.01.

Basis of preparation

The fi nancial report is a general purpose fi nancial report which has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a fi nancial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the fi nancial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this fi nancial report are presented below and have been consistently applied unless otherwise stated.

Pursuant to subsections 323D(3) of the Corporation Act 2001 (Cth), Metminco has changed its fi nancial year from 30 June to 31 December to synchronise with its consolidated entities. Therefore comparatives for income and expense and cash fl ow items represent 12 months as opposed to 6 months.

The fi nancial report has been prepared on an accruals basis and is based on historical costs, modifi ed, where applicable, by the measurement at fair value of selected non-current assets, fi nancial assets and fi nancial liabilities.

The fi nancial statements were authorised for issue by the directors on 31 March 2011.

a. Going concern basis of accounting

Both the Consolidated Group and the Company have made losses for the half year. Metminco Limited is an exploration Company currently without an operating cash fl ow and the net cash position of the Group will continue to decrease until such time as the Group has an operating cashfl ow.

The Group will need to raise additional capital to advance its current portfolio of exploration projects and meet ongoing working capital requirements. The directors are satisfi ed that the Company and Group have suffi cient cash reserves to maintain its current portfolio and meet its debts as and when they fall due.

b. Principles of Consolidation

The consolidated fi nancial statements incorporate the assets, liabilities and results of entities controlled by Metminco Limited at the end of the reporting period. A controlled entity is any entity over which Metminco Limited has the power to govern the fi nancial and operating policies so as to obtain benefi ts from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and eff ect of holdings of actual and potential voting rights are also considered.

Where controlled entities have entered or left the Group during the half year, the fi nancial performance of those entities are included only for the period of the half year that they were controlled. A list of controlled entities is contained in Note 14 to the fi nancial statements.

In preparing the consolidated fi nancial statements, all inter-group balances and transactions between entities in the Consolidated Group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the Equity section of the consolidated Statement of Financial Position and Statement of Comprehensive Income. The noncontrolling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

c. Business Combinations

Business combinations occur where an acquirer obtains control over one or more businesses and results in the consolidation of its assets and liabilities.

34 METMINCO LIMITED Report for the six months ended 31 December 2010

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The acquisition method requires that for each business combination one of the combining entities must be identifi ed as the acquirer (ie parent entity). The business combination will be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the parent entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to certain limited exceptions, the fair value of the identifi able assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be reliably measured.

The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted for the measurement of goodwill will impact on the measurement of any non-controlling interest to be recognised in the acquiree where less than 100% ownership interest is held in the acquiree.

The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate fi nancial statements. Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.

Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of comprehensive income. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profi t or loss.

Acquisitions of non-controlling interests in a subsidiary that does not result in a loss of control are accounted for as an equity transaction. The carrying amount of the controlling and non-controlling interests shall be adjusted to refl ect the changes in their relative interests in the subsidiary. Any diff erence between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received shall be recognised directly in equity and attributed to the owners of the parent.

All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.

d. Income Tax

The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).

Current income tax expense charged to the profi t or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred income tax expense refl ects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.

Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profi t or loss when the tax relates to items that are credited or charged directly to equity.

Deferred tax assets and liabilities are ascertained based on temporary diff erences arising between the tax bases of assets and liabilities and their carrying amounts in the fi nancial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no eff ect on accounting or taxable profi t or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their measurement also refl ects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary diff erences and unused tax losses are recognised only to the extent that it is probable that future taxable profi t will be available against which the benefi ts of the deferred tax asset can be utilised.

Where temporary diff erences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary diff erence can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are off set where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are off set where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or diff erent taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which signifi cant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

e. Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipment

Plant and equipment are measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash fl ows that will be received from the asset’s employment and subsequent disposal. The expected net cash fl ows have been discounted to their present values in determining recoverable amounts.

The cost of property, plant and equipment constructed within the Consolidated Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fi xed and variable overheads.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefi ts associated with the item will fl ow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the fi nancial period in which they are incurred.

Depreciation

The depreciable amount of all fi xed assets including buildings and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over the asset’s useful life to the Consolidated Group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable assets are:

CLASS OF FIXED ASSET	DEPRECIATION RATE
Land	Nil
Plant and equipment	33%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.

f. Exploration and Development Expenditure

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifi able area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profi t in the period in which the decision to abandon the area is made.

When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

There are currently no restoration requirements for the areas of interest held.

g. Leases

Leases of fi xed assets where substantially all the risks and benefi ts incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the Consolidated Group, are classifi ed as fi nance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

36 METMINCO LIMITED Report for the six months ended 31 December 2010

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term. Lease payments for operating leases, where substantially all the risks and benefi ts remain with the lessor, are charged as expenses in the periods in which they are incurred.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

h. Financial Instruments

Recognition and initial measurement

Financial assets and fi nancial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For fi nancial assets, this is equivalent to the date that the Company commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classifi ed ‘at fair value through profi t or loss’, in which case transaction costs are expensed to profi t or loss immediately.

Classifi cation and subsequent measurement

Finance instruments are subsequently measured at either of fair value, amortised cost using the eff ective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as:

a. the amount at which the fi nancial asset or fi nancial liability is measured at initial recognition;
b. less principal repayments;
c. amount initially recognised and the maturity amount calculated using the eff ective interest method; and
d. less any reduction for impairment.

The eff ective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the fi nancial instrument to the net carrying amount of the fi nancial asset or fi nancial liability. Revisions to expected future net cash fl ows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profi t or loss. The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifi cally applicable to fi nancial instruments.

i. Financial assets at fair value through profi t or loss

Financial assets are classifi ed at ‘fair value through profi t or loss’ when they are either held for trading for the purpose of short-term profi t taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of fi nancial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profi t or loss.

ii. Loans and receivables Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period. (All other loans and receivables are classifi ed as non-current assets.)

iii. Held-to-maturity investments

Held-to-maturity investments are non-derivative fi nancial assets that have fi xed maturities and fi xed or determinable payments, and it is the Group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.

Held-to-maturity investments are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period. (All other investments are classifi ed as current assets.)

If during the period the Group sold or reclassifi ed more than an insignifi cant amount of the held-to-maturity investments before maturity, the entire held-to-maturity investments category would be tainted and reclassifi ed as available-for-sale.

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

h. Financial Instruments continued

iv. Available-for-sale fi nancial assets

Available-for-sale fi nancial assets are non-derivative fi nancial assets that are either not suitable to be classifi ed into other categories of fi nancial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fi xed maturity nor fi xed or determinable payments. Available-for-sale fi nancial assets are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period. (All other fi nancial assets are classifi ed as current assets.)

v. Financial liabilities

Non-derivative fi nancial liabilities (excluding fi nancial guarantees) are subsequently measured at amortised cost.

Impairment

At the end of each reporting period, the Group assesses whether there is objective evidence that a fi nancial instrument has been impaired. In the case of available-for-sale fi nancial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the statement of comprehensive income.

De-recognition

Financial assets are de-recognised where the contractual rights to receipt of cash fl ows expires or the asset is transferred to another party whereby the entity no longer has any signifi cant continuing involvement in the risks and benefi ts associated with the asset. Financial liabilities are de-recognised where the related obligations are either discharged, cancelled or expired. The diff erence between the carrying value of the fi nancial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in the profi t or loss.

i. Derivative fi nancial instruments

Metminco Limited and controlled entities designate derivatives held as non-eff ective and all movements are recognised through the statement of comprehensive income.

Equity swap agreement

The equity swap arrangement embedded in the receivable (Note 9) has been designated as a fair value derivative and movements taken through the statement of comprehensive income.

Convertible note option

The conversion option embedded in the convertible notes (Note 18) has been treated as an embedded derivative and fair valued through the statement of comprehensive income.

On conversion of a convertible instrument at maturity, the entity derecognises the liability component and recognises it as equity. The original equity component remains as equity (although it may be transferred from one line item within equity to another). There is no gain or loss on conversion at maturity.

When an entity extinguishes a convertible instrument before maturity through an early redemption or repurchase in which the original conversion privileges are unchanged, the entity allocates the consideration paid and any transaction costs for the repurchase or redemption to the liability and equity components of the instrument at the date of the transaction. The method used in allocating the consideration paid and transaction costs to the separate components is consistent with that used in the original allocation to the separate components of the proceeds received by the entity when the convertible instrument was issued. The amount of gain or loss relating to the liability component is recognised in the profi t or loss.

38 METMINCO LIMITED Report for the six months ended 31 December 2010

j. Impairment of Non-Financial Assets

At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profi ts. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income.

Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Impairment testing is performed annually for goodwill and intangible assets with indefi nite lives.

k. Investments in Associates

Associate companies are companies in which the Group has signifi cant infl uence through holding, directly or indirectly, 20% or more of the voting power of the company. Investments in associates are accounted for in the fi nancial statements by applying the equity method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the postacquisition change in the Group’s share of net assets of the associate company. In addition the Group’s share of the profi t or loss of the associate company is included in the Group’s profi t or loss.

The carrying amount of the investment includes goodwill relating to the associate. Any excess of the Group’s share of the net fair value of the associate’s identifi able assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the investor’s share of the associate’s profi t or loss in the period in which the investment is acquired.

Profi ts and losses resulting from transactions between the Group and the associate are eliminated to the extent of the relation to the Group’s investment in the associate.

When the reporting dates of the Group and the associate are diff erent, the associate prepares, for the Group’s use, fi nancial statements as of the same date as the fi nancial statements of the Group with adjustments being made for the eff ects of signifi cant transactions or events that occur between that date and the date of the investor’s fi nancial statements.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group discontinues recognising its share of further losses unless it has incurred legal or constructive obligations or made payments on behalf of the associate. When the associate subsequently makes profi ts, the Group will resume the recognition of its share of those profi ts once its share of the profi ts equals the share of the losses not recognised.

l. Interests in Joint Ventures

The Consolidated Group’s share of the assets, liabilities, revenue and expenses of jointly controlled assets have been included in the appropriate line items of the consolidated fi nancial statements. Details of the Consolidated Group’s interests are shown at Note 13.

The Consolidated Group’s interests in joint venture entities are brought to account using the equity method of accounting (refer to Note 1(k) for details) in the consolidated fi nancial statements. The parent entity’s interests in joint venture entities are brought to account at cost.

Where the Group contributes assets to the joint venture or if the Group purchases assets from the joint venture, only the portion of the gain or loss that is not attributable to the Group’s share of the joint venture shall be recognised. The Group however will recognise the full amount of any loss when the contribution results in a reduction in the net realisable value of current assets or an impairment loss.

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

m. Foreign Currency Transactions and Balances

Functional and presentation currency

The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated fi nancial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange diff erences arising on the translation of monetary items are recognised in the statement of comprehensive income, except where deferred in equity as a qualifying cash fl ow or net investment hedge.

Exchange diff erences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange diff erence is recognised in the statement of comprehensive income.

Group companies

The fi nancial results and position of foreign operations whose functional currency is diff erent from the Group’s presentation currency are translated as follows:

assets and liabilities are translated at year-end exchange rates prevailing at the end of the reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange diff erences arising on translation of foreign operations are transferred directly to the Group’s foreign currency translation reserve in the statement of fi nancial position. These diff erences are recognised in the statement of comprehensive income in the period in which the operation is disposed.

n. Employee Benefi ts

Provision is made for the Group’s liability for employee benefi ts arising from services rendered by employees to balance date. Employee benefi ts that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefi ts payable later than one year have been measured at the present value of the estimated future cash outfl ows to be made for those benefi ts. In determining the liability, consideration is given to employee wages increases and the probability that the employee may satisfy vesting requirements. Those cash outfl ows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash fl ows.

o. Provisions

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outfl ow of economic benefi ts will result and that outfl ow can be reliably measured.

p. Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of one month or less that are readily convertible to a known amount of cash and subject to an insignifi cant risk of change in value, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of fi nancial position.

q. Revenue and Other Income

Interest revenue is recognised using the eff ective interest rate method, which, for fl oating rate fi nancial assets, is the rate inherent in the instrument.

All revenue is stated net of the amount of goods and services tax (GST).

40 METMINCO LIMITED Report for the six months ended 31 December 2010

r. Equity Settled Compensation

The Group operates equity-settled share-based payment employee share and option schemes. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using a Binomial pricing model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting date such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

Other equity settled share-based payments to service providers the Group measures the goods or services received and the corresponding increase in equity, directly, at the fair value of the goods or services received, unless that fair value cannot be estimated reliably.

If the entity cannot estimate reliably the fair value of the goods or services received, the entity shall measure their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted.

s. Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Offi ce. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of fi nancial position are shown inclusive of GST. Cash fl ows are presented in the statement of cashfl ows on a gross basis, except for the GST component of investing and fi nancing activities, which are disclosed as operating cash fl ows.

t. Comparative Figures

When required by Accounting Standards, comparative fi gures have been adjusted to conform to changes in presentation for the current fi nancial year.

When the Group applies an accounting policy retrospectively, makes a retrospective restatement or reclassifi es items in its

fi nancial statements, a statement of fi nancial position as at the beginning of the earliest comparative period will be disclosed.

u. Key estimates

i. Impairment

The Group assesses impairment at the end of each reporting period by evaluating conditions and events specifi c to the Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using valuein-use calculations which incorporate various key assumptions. These assumptions are disclosed in each of the notes to the fi nancial report where applicable.

ii. Exploration and Evaluation Expenditure

The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. While there are certain areas of interest from which no reserves have been extracted, the directors are of the continued belief that such expenditure should not be written off since feasibility studies in such areas have not yet concluded. Such capitalised expenditure is carried at the end of the reporting period at $102,297,461.

iii. Fair value of derivative fi nancial instruments

The fair value of derivative fi nancial instruments are determined using various key assumptions. These assumptions are disclosed in each of the notes to the fi nancial report where applicable.

iv. Valuation methodology used in calcuation of share options

The Binomial method has been used to value shares options in respect of the optionality underlying the convertible notes, share options issued in lieu of consulting fees and share options issued to directors and employees. The Company has used a 70% volatility (based on historical volatility), the share price on the applicable date (being either the date of issue or the balance date) and an option life based on the Company’s best estimate of the expected exercise patterns which may not eventuate in the future.

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

v. New Accounting Standards for Application In Future Periods

The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future periods and which the company has not decided to early adopt. A discussion of those future requirements and their impact on the Company is as follows:

AASB 2009-10 Amendments to Australian Accounting Standards – Classifi cation of Rights Issues (applicable for annual reporting periods ending on or after 31 January 2011)

This standard makes amendments which clarify that rights, options or warrants to acquire a fi xed number of an company’s own equity instruments for a fi xed amount in any currency are equity instruments if the company off ers the rights, options or warrants pro rata to all existing owners of the same class of its non-derivative equity instruments. This Standard is not expected to impact the Company.

AASB 9 Financial Instruments and AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 (applicable for annual reporting periods ending on or after 31 December 2013)

AASB 9 introduces new requirements for the classifi cation and measurement of fi nancial assets and liabilities. AASB 9 uses a single approach to determine whether a fi nancial asset is measured at amortised cost or fair value, replacing the many diff erent rules in AASB 139 and removes the impairment requirement for fi nancial assets held at fair value.

In addition, the majority of requirements from AASB 139 for the classifi cation and measurement of fi nancial liabilities has been carried forward unchanged, except in relation to own credit risk where an entity takes the option to measure fi nancial liabilities at fair value. AASB 9 requires the amount of the change in fair value due to changes in the entity’s own credit risk to be presented in other comprehensive income (OCI), unless there is a accounting mismatch in the profi t or loss, in which case all gains or losses are to be presented in the profi t or loss.

This Standard is not expected to impact the Company.

AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting Standards arising from AASB 124 (applicable for annual reporting periods ending on or after 31 December 2011)

This revision amends the disclosure requirements for government related entities and the defi nition of a related party. This Standard is not expected to impact the Company.

AASB 2009-13 Amendments to AASB 1 arising from Interpretation 19 (applicable for annual reporting periods ending on or

after 30 June 2011)

This standard amends AASB 1 to allow a fi rst-time adopter to use the transitional provisions in Interpretation 19 as identifi ed in AASB 1048.This Standard is not expected to impact the Company.

AASB 2009-14 Prepayments of a Minimum Funding Requirement (Amendments to Interpretation 14) (applicable for annual reporting periods ending on or after 31 December 2011)

This amendment to Interpretation 14 addresses the unintended consequences that can arise from the previous requirements when an entity prepays future contributions into a defi ned benefi t pension plan. This Standard is not expected to impact the Company.

AASB 2010-01 Limited exemption from comparative AASB 7 disclosures for fi rst time adopters (Amendments to AASB 1 and AASB 7) (applicable for annual reporting periods ending on or after 30 June 2011)

These amendments principally give eff ect to extending the transition provisions of AASB 2009-2 Amendments to Australian Accounting Standards – Improving Disclosures about Financial Instruments to fi rst-time adopters of Australian Accounting Standards.

This Standard is not expected to impact the Company.

42 METMINCO LIMITED Report for the six months ended 31 December 2010

AASB 2010-2 Amendments to Australian Accounting Standards arising from reduced disclosure requirements (applicable for annual reporting periods ending on or after 30 June 2014)

This Standard gives eff ect to Australian Accounting Standards - Reduced Disclosure Requirements. AASB 1053 provides further information regarding the diff erential reporting framework and the two tiers of reporting requirements for preparing general purpose fi nancial statements.

This Standard is not expected to impact the Company.

AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 3, AASB 7, AASB 121, AASB 128, AASB 131, AASB 132 & AASB 139] (applicable for annual reporting periods ending on or after 30 June 2011)

This Standard limits the scope of the measurement choices of non-controlling interest at proportionate share of net assets in the event of liquidation. Other components of NCI are measured at fair value.

Requires an entity (in a business combination) to account for the replacement of the acquiree’s share-based payment transactions (whether obliged or voluntarily), i.e.split between consideration and post combination expenses.

It clarifi es that contingent consideration from a business combination that occurred before the eff ective date of AASB 3 Revised is not restated.

Eliminates the requirement to restate fi nancial statements for a reporting period when signifi cant infl uence or joint control is lost and the reporting entity accounts for the remaining investment under AASB 139. This includes the eff ect on accumulated foreign exchange diff erences on such investments.

This Standard is not expected to impact the Company.

AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101, AASB 134 and Interpretation 13] (applicable for annual reporting periods ending on or after 31 December 2011)

This Standard emphasises the interaction between quantitative and qualitative AASB 7 disclosures and the nature and extent of risks associated with fi nancial instruments.

It clarifi es that an entity will present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity or in the notes to the fi nancial statements.

It provides guidance to illustrate how to apply disclosure principles in AASB 134 for signifi cant events and transactions.

Clarify that when the fair value of award credits is measured based on the value of the awards for which they could be redeemed, the amount of discounts or incentives otherwise granted to customers not participating in the award credit scheme, is to be taken in account.

This Standard is not expected to impact the Company.

AASB 1053 Application of Tiers of Australian Accounting Standards (applicable for annual reporting periods ending on or

after 30 June 2014)

This Standard establishes a diff erential fi nancial reporting framework consisting of two Tiers of reporting requirements for preparing general purpose fi nancial statements:

a Tier 1: Australian Accounting Standards; and
b Tier 2: Australian Accounting Standards - Reduced Disclosure Requirements.
Tier 2 comprises the recognition, measurement and presentation requirements of Tier 1 and substantially reduced disclosures corresponding to those requirements.

The following entities apply Tier 1 requirements in preparing general purpose fi nancial statements:

a for-profi t entities in the private sector that have public accountability (as defi ned in this Standard); and
b the Australian Government and State, Territory and Local Governments.

The following entities apply either Tier 2 or Tier 1 requirements in preparing general purpose fi nancial statements:

a for-profi t private sector entities that do not have public accountability;
b all not-for-profi t private sector entities; and
c public sector entities other than the Australian Government and State,

This Standard is not expected to impact the Company.

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

v. New Accounting Standards for Application In Future Periods continued

Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments (applicable for annual reporting periods ending on or after 30 June 2011)

This interpretation clarifi es that equity instruments issued to a creditor to extinguish a fi nancial liability are ‘consideration paid’ in accordance with AASB 139. As a result, the fi nancial liability is derecognised and the equity instruments issued are treated as consideration paid to extinguish that fi nancial liability.

The interpretation states that equity instruments issued in a debt for equity swap should be measured at the fair value of the equity instruments issued, if this can be determined reliably. If the fair value of the equity instruments issued is not reliably determinable, the equity instruments should be measured by reference to the fair value of the fi nancial liability extinguished as of the date of extinguishment.

This Standard is not expected to impact the Company.

AASB 2010-05 Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] (applicable for annual reporting periods ending on or after 31 December 2011)

The Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to refl ect changes made to the text of International Financial Reporting Standards by the International Accounting Standards Board.

This Standard is not expected to impact the Company.

AASB 7 Financial Instruments: Disclosures (Transfers of Financial Assets) (applicable for annual reporting periods ending on or after 30 June 2012)

The Standard amends the disclosures required, to help users of fi nancial statements evaluate the risk exposures relating to more complex transfers of fi nancial assets (eg. securitisations) and the eff ect of those risks on an entity’s fi nancial position. This Standard is not expected to impact the Company.

44 METMINCO LIMITED Report for the six months ended 31 December 2010

CONSOLIDATED COMPANY 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ NOTE 2: REVENUE Interest received – other persons 67,695 51,297 66,341 47,469 Prof t on sale of asset – 362 – 362 67,695 51,659 66,341 47,831 NOTE 3: LOSS FOR THE YEAR Expenses Expenses from continuing operations: Finance costs – external 1,290,843 360,810 1,290,843 360,810 Gain on consolidation of subsidiary – (600,062) – – Foreign currency translation losses/(gains) 334,224 (170,942) 494,727 13,436 AIM listing costs – 1,164,478 – 1,164,478 Rental expense on operating leases 89,966 111,708 – – Capitalised exploration expenditure impaired 9,875 1,588,013 – 1,144,664 Employee and directors’ benef ts expense 3,299,090 1,180,443 2,960,866 902,910 Depreciation and amortisation expense 79,008 5,221 1,709 4,112 NOTE 4: INCOME TAX EXPENSE a. The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows: Loss before tax 11,340,398 7,776,592 10,359,655 6,697,848 Total income tax benef t calculated at 30% (2009: 30%) (3,402,119) (2,332,978) (3,107,896) (2,009,354) Tax ef ect of: Foreign exchange losses/(gains) 100,267 (51,283) 148,418 4,031 Fair value of receivables losses/(gains) (761,408) (28,988) (761,408) (28,988) Gain on consolidation of a subsidiary – (180,019) – – Fair value loss on convertible notes 1,764,721 655,539 1,764,721 655,539 Options issued 819,008 – 819,008 – Write of capitalised exploration expenditure 2,963 476,404 – 343,399 Exploration expenditure capitalised (1,016,506) (32,610) – (32,610) Share of associates’ loss 2,154 237,947 – – (2,490,920) (1,255,988) (1,137,157) (1,067,983) Deferred tax asset not brought to account 2,490,920 1,255,988 1,137,157 1,067,983 Income tax expense on pre-tax loss – – – – Applicable weighted average ef ective tax rate 0% 0% 0% 0% Deferred tax asset not taken to account Tax losses carried forward: – Revenue losses carried forward 19,498,983 11,195,916 12,047,195 8,256,672	CONSOLIDATED COMPANY 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ NOTE 2: REVENUE Interest received – other persons 67,695 51,297 66,341 47,469 Prof t on sale of asset – 362 – 362 67,695 51,659 66,341 47,831 NOTE 3: LOSS FOR THE YEAR Expenses Expenses from continuing operations: Finance costs – external 1,290,843 360,810 1,290,843 360,810 Gain on consolidation of subsidiary – (600,062) – – Foreign currency translation losses/(gains) 334,224 (170,942) 494,727 13,436 AIM listing costs – 1,164,478 – 1,164,478 Rental expense on operating leases 89,966 111,708 – – Capitalised exploration expenditure impaired 9,875 1,588,013 – 1,144,664 Employee and directors’ benef ts expense 3,299,090 1,180,443 2,960,866 902,910 Depreciation and amortisation expense 79,008 5,221 1,709 4,112 NOTE 4: INCOME TAX EXPENSE a. The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows: Loss before tax 11,340,398 7,776,592 10,359,655 6,697,848 Total income tax benef t calculated at 30% (2009: 30%) (3,402,119) (2,332,978) (3,107,896) (2,009,354) Tax ef ect of: Foreign exchange losses/(gains) 100,267 (51,283) 148,418 4,031 Fair value of receivables losses/(gains) (761,408) (28,988) (761,408) (28,988) Gain on consolidation of a subsidiary – (180,019) – – Fair value loss on convertible notes 1,764,721 655,539 1,764,721 655,539 Options issued 819,008 – 819,008 – Write of capitalised exploration expenditure 2,963 476,404 – 343,399 Exploration expenditure capitalised (1,016,506) (32,610) – (32,610) Share of associates’ loss 2,154 237,947 – – (2,490,920) (1,255,988) (1,137,157) (1,067,983) Deferred tax asset not brought to account 2,490,920 1,255,988 1,137,157 1,067,983 Income tax expense on pre-tax loss – – – – Applicable weighted average ef ective tax rate 0% 0% 0% 0% Deferred tax asset not taken to account Tax losses carried forward: – Revenue losses carried forward 19,498,983 11,195,916 12,047,195 8,256,672	CONSOLIDATED COMPANY 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ NOTE 2: REVENUE Interest received – other persons 67,695 51,297 66,341 47,469 Prof t on sale of asset – 362 – 362 67,695 51,659 66,341 47,831 NOTE 3: LOSS FOR THE YEAR Expenses Expenses from continuing operations: Finance costs – external 1,290,843 360,810 1,290,843 360,810 Gain on consolidation of subsidiary – (600,062) – – Foreign currency translation losses/(gains) 334,224 (170,942) 494,727 13,436 AIM listing costs – 1,164,478 – 1,164,478 Rental expense on operating leases 89,966 111,708 – – Capitalised exploration expenditure impaired 9,875 1,588,013 – 1,144,664 Employee and directors’ benef ts expense 3,299,090 1,180,443 2,960,866 902,910 Depreciation and amortisation expense 79,008 5,221 1,709 4,112 NOTE 4: INCOME TAX EXPENSE a. The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows: Loss before tax 11,340,398 7,776,592 10,359,655 6,697,848 Total income tax benef t calculated at 30% (2009: 30%) (3,402,119) (2,332,978) (3,107,896) (2,009,354) Tax ef ect of: Foreign exchange losses/(gains) 100,267 (51,283) 148,418 4,031 Fair value of receivables losses/(gains) (761,408) (28,988) (761,408) (28,988) Gain on consolidation of a subsidiary – (180,019) – – Fair value loss on convertible notes 1,764,721 655,539 1,764,721 655,539 Options issued 819,008 – 819,008 – Write of capitalised exploration expenditure 2,963 476,404 – 343,399 Exploration expenditure capitalised (1,016,506) (32,610) – (32,610) Share of associates’ loss 2,154 237,947 – – (2,490,920) (1,255,988) (1,137,157) (1,067,983) Deferred tax asset not brought to account 2,490,920 1,255,988 1,137,157 1,067,983 Income tax expense on pre-tax loss – – – – Applicable weighted average ef ective tax rate 0% 0% 0% 0% Deferred tax asset not taken to account Tax losses carried forward: – Revenue losses carried forward 19,498,983 11,195,916 12,047,195 8,256,672
	(2,490,920) (1,255,988) (1,137,157) 2,490,920 1,255,988 1,137,157	(1,067,983) 1,067,983
	– – –	–
		0% 8,256,672

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 4: INCOME TAX EXPENSE continued

The deductible temporary diff erences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not yet considered probable that future taxable income will be available to utilise them. The Group does not have any capital losses.

b. Tax eff ects relating to each component of other comprehensive income

b. Tax ef ects relating to each component of other comprehensive income
31 DECEMBER 2010 30 JUNE 2010 BEFORE-TAX AMOUNT $000 TAX (EXPENSE) BENEFIT $000 NET-OF-TAX AMOUNT $000 BEFORE-TAX AMOUNT $000 TAX (EXPENSE) BENEFIT $000 Consolidated Group Exchange dif erences on translating foreign controlled entities (3,612,522) – (3,612,522) 1,599,074 – (3,612,522) – (3,612,522) 1,599,074 –	NET-OF-TAX AMOUNT $000 1,599,074
	1,599,074

NOTE 5: INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP)

Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each member of the Group’s key management personnel for the period ended 31 December 2010.

The totals of remuneration paid to KMP of the Company and the Group during the period are as follows:

Short term employee benef ts Post-employment benef ts Other long term benef ts Termination benef ts Share based payments	CONSOLIDATED 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ 876,117 1,050,975 9,323 25,216 – – – – 2,022,216 53,000
	2,907,656 1,129,191

46 METMINCO LIMITED Report for the six months ended 31 December 2010

KMP Options and Rights Holdings

The number of options over ordinary shares held by each KMP of the Group during the period is as follows:

BALANCE AT THE BEGINNING OF THE PERIOD GRANTED AS REMUNER- ATION DURING THE PERIOD EXERCISED DURING THE PERIOD OTHER CHANGES DURING THE PERIOD BALANCE AT END OF PERIOD VESTED DURING THE PERIOD 31 December 2010 John Fillmore Listed option @ $0.25 Dec 2012 1,099,999 – – – 1,099,999 – Unlisted option @ $0.44 Dec 2013 – 3,000,000 – – 3,000,000 3,000,000 Unlisted option @ $0.525 Dec 2013 – 3,000,000 – – 3,000,000 3,000,000 William Howe – – – – – – Philip Wing – – – – – – William Etheridge – – – – – – Tim Read – – – – – – Unlisted option @ $0.44 Dec 2013 – 3,000,000 – – 3,000,000 3,000,000 Unlisted option @ $0.525 Dec 2013 – 3,000,000 – – 3,000,000 3,000,000 Francisco Vergara-Irarrazaval – – – – – – Philip Killen – – – – – – Unlisted option @ $0.44 Dec 2013 – 2,000,000 – – 2,000,000 2,000,000 Unlisted option @ $0.525 Dec 2013 – 2,000,000 – – 2,000,000 2,000,000 Colin Sinclair – – – – – – Unlisted option @ $0.44 Dec 2013 – 2,500,000 – – 2,500,000 2,500,000 Unlisted option @ $0.525 Dec 2013 – 2,500,000 – – 2,500,000 2,500,000 Keith Weston Listed option @ $0.25 Dec 2012 274,999 – – – 274,999 – Unlisted option @ $0.44 Dec 2013 – 1,500,000 – – 1,500,000 1,500,000 Unlisted option @ $0.525 Dec 2013 – 1,500,000 – – 1,500,000 1,500,000 1,374,998 24,000,000 – – 25,374,998 24,000,000 30 June 2010 John Fillmore 1,099,999 – – – 1,099,999 – Keith Weston 274,999 – – – 274,999 – 1,374,998 – – – 1,374,998 –	BALANCE AT THE BEGINNING OF THE PERIOD GRANTED AS REMUNER- ATION DURING THE PERIOD EXERCISED DURING THE PERIOD OTHER CHANGES DURING THE PERIOD BALANCE AT END OF PERIOD VESTED DURING THE PERIOD 31 December 2010 John Fillmore Listed option @ $0.25 Dec 2012 1,099,999 – – – 1,099,999 – Unlisted option @ $0.44 Dec 2013 – 3,000,000 – – 3,000,000 3,000,000 Unlisted option @ $0.525 Dec 2013 – 3,000,000 – – 3,000,000 3,000,000 William Howe – – – – – – Philip Wing – – – – – – William Etheridge – – – – – – Tim Read – – – – – – Unlisted option @ $0.44 Dec 2013 – 3,000,000 – – 3,000,000 3,000,000 Unlisted option @ $0.525 Dec 2013 – 3,000,000 – – 3,000,000 3,000,000 Francisco Vergara-Irarrazaval – – – – – – Philip Killen – – – – – – Unlisted option @ $0.44 Dec 2013 – 2,000,000 – – 2,000,000 2,000,000 Unlisted option @ $0.525 Dec 2013 – 2,000,000 – – 2,000,000 2,000,000 Colin Sinclair – – – – – – Unlisted option @ $0.44 Dec 2013 – 2,500,000 – – 2,500,000 2,500,000 Unlisted option @ $0.525 Dec 2013 – 2,500,000 – – 2,500,000 2,500,000 Keith Weston Listed option @ $0.25 Dec 2012 274,999 – – – 274,999 – Unlisted option @ $0.44 Dec 2013 – 1,500,000 – – 1,500,000 1,500,000 Unlisted option @ $0.525 Dec 2013 – 1,500,000 – – 1,500,000 1,500,000 1,374,998 24,000,000 – – 25,374,998 24,000,000 30 June 2010 John Fillmore 1,099,999 – – – 1,099,999 – Keith Weston 274,999 – – – 274,999 – 1,374,998 – – – 1,374,998 –	VESTED AND EXERCISABLE 1,099,999 3,000,000 3,000,000 – – – – 3,000,000 3,000,000 – – 2,000,000 2,000,000 – 2,500,000 2,500,000 274,999 1,500,000 1,500,000
	1,374,998 24,000,000 – – 25,374,998 24,000,000	25,374,998
	1,099,999 – – – 1,099,999 – 274,999 – – – 274,999 –	1,099,999 274,999
	1,374,998 – – – 1,374,998 –	1,374,998

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 5: INTERESTS OF KEY MANAGEMENT PERSONNEL (KMP) continued

KMP Shareholdings

The number of ordinary shares in Metminco Limited held by each KMP of the Group during the period is as follows:

BALANCE AT 30 JUNE 2010 GRANTED AS REMUNERATION DURING THE PERIOD ISSUED ON EXERCISE OF OPTIONS DURING THE PERIOD OTHER CHANGES DURING THE PERIOD 31 December 2010 John Fillmore 2,220,000 – – – William Howe 48,264,168 – – – Philip Wing 15,893,336 – – – William Etheridge 62,400,000 – – – Tim Read 250,000 – – – Francisco Vergara - Irarrazaval 50,140,000 – – – Philip Killen 3,949,836 – – – Colin Sinclair 5,766,353 – – – Keith Weston 550,000 – – – Shane Turner 40,000 – – – 189,473,693 – – – 30 June 2010 John Fillmore 2,220,000 – – – William Howe – – – 48,264,168 Philip Wing – – – 15,893,336 William Etheridge – – – 62,400,000 Tim Read – – – 250,000 Francisco Vergara - Irarrazaval – – – 50,140,000 Philip Killen – – – 3,949,836 Colin Sinclair – – – 5,766,353 Keith Weston 550,000 – – – Shane Turner 40,000 – – – 2,810,000 – – 186,663,693	BALANCE AT 30 JUNE 2010 GRANTED AS REMUNERATION DURING THE PERIOD ISSUED ON EXERCISE OF OPTIONS DURING THE PERIOD OTHER CHANGES DURING THE PERIOD 31 December 2010 John Fillmore 2,220,000 – – – William Howe 48,264,168 – – – Philip Wing 15,893,336 – – – William Etheridge 62,400,000 – – – Tim Read 250,000 – – – Francisco Vergara - Irarrazaval 50,140,000 – – – Philip Killen 3,949,836 – – – Colin Sinclair 5,766,353 – – – Keith Weston 550,000 – – – Shane Turner 40,000 – – – 189,473,693 – – – 30 June 2010 John Fillmore 2,220,000 – – – William Howe – – – 48,264,168 Philip Wing – – – 15,893,336 William Etheridge – – – 62,400,000 Tim Read – – – 250,000 Francisco Vergara - Irarrazaval – – – 50,140,000 Philip Killen – – – 3,949,836 Colin Sinclair – – – 5,766,353 Keith Weston 550,000 – – – Shane Turner 40,000 – – – 2,810,000 – – 186,663,693	BALANCE AT 31 DECEMBER 2010 2,220,000 48,264,168 15,893,336 62,400,000 250,000 50,140,000 3,949,836 5,766,353 550,000 40,000
	189,473,693 – – –	189,473,693
	2,220,000 – – – – – – 48,264,168 – – – 15,893,336 – – – 62,400,000 – – – 250,000 – – – 50,140,000 – – – 3,949,836 – – – 5,766,353 550,000 – – – 40,000 – – –	2,220,000 48,264,168 15,893,336 62,400,000 250,000 50,140,000 3,949,836 5,766,353 550,000 40,000
	2,810,000 – – 186,663,693	189,473,693

Other KMP Transactions

There have been no other KMP transactions involving equity instruments other than those described in the tables above. For details of other transactions with KMP refer to Note 27 Related Party Transactions.

48 METMINCO LIMITED Report for the six months ended 31 December 2010

NOTE 6: AUDITORS’ REMUNERATION Audit services: Parent Subsidiaries – Hampton and North Hill Expert’s report and professional services	CONSOLIDATED COMPANY 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ 70,566 70,000 70,566 70,000 26,493 20,000 – –
	97,059 90,000 70,566 70,000 14,256 223,287 4,500 223,287 111,315 313,287 75,066 293,287

NOTE 7: LOSS PER SHARE

a. Reconciliation of earnings to loss Loss Loss attributable to minority equity interest Loss used in the calculation of basic and dilutive EPS b. Weighted average number of ordinary shares outstanding during the period used in calculating basic EPS Weighted average number of dilutive options outstanding Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS c. Anti-dilutive options on issue not used in dilutive EPS calculation NOTE 8: CASH AND CASH EQUIVALENTS CONSOLIDATED 31 DECEMBER 2010 30 JUNE 2010 $ $ Cash at bank 23,189,432 2,151,232 Short-term bank deposits – 8,196 23,189,432 2,159,428	CONSOLIDATED 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ (11,340,398) (7,776,592) 199,492 267,977	CONSOLIDATED 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ (11,340,398) (7,776,592) 199,492 267,977
	(11,140,906) (7,508,615)
	NO. NO. 892,478,975 443,794,287 – –
	892,478,975 443,794,287
	64,217,517 27,230,017 COMPANY 31 DECEMBER 2010 30 JUNE 2010 $ $ 21,572,370 1,181,010 – 8,196
	31 DECEMBER 2010
	$
	21,572,370
	–
	21,572,370	1,189,206

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ NOTE 9: TRADE AND OTHER RECEIVABLES AND DERIVATIVES Current Other receivables 287,500 389,751 139,168 71,915 Receivable from equity swap – secured 1,712,328 1,928,000 1,712,329 1,928,000 Total current trade and other receivables 1,999,828 2,317,751 1,851,497 1,999,915 Equity swap derivative at fair value 1,648,388 – 1,648,388 – Non-current VAT receivables 2,295,511 2,268,800 – – Long term receivables 93,215 – – – Receivable from equity swap – secured 951,292 1,864,078 951,292 1,864,078 Total non-current trade and other receivables 3,340,018 4,132,878 951,292 1,864,078 Equity swap derivative at fair value 465,147 (96,625) 465,147 (96,625)	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ NOTE 9: TRADE AND OTHER RECEIVABLES AND DERIVATIVES Current Other receivables 287,500 389,751 139,168 71,915 Receivable from equity swap – secured 1,712,328 1,928,000 1,712,329 1,928,000 Total current trade and other receivables 1,999,828 2,317,751 1,851,497 1,999,915 Equity swap derivative at fair value 1,648,388 – 1,648,388 – Non-current VAT receivables 2,295,511 2,268,800 – – Long term receivables 93,215 – – – Receivable from equity swap – secured 951,292 1,864,078 951,292 1,864,078 Total non-current trade and other receivables 3,340,018 4,132,878 951,292 1,864,078 Equity swap derivative at fair value 465,147 (96,625) 465,147 (96,625)	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ NOTE 9: TRADE AND OTHER RECEIVABLES AND DERIVATIVES Current Other receivables 287,500 389,751 139,168 71,915 Receivable from equity swap – secured 1,712,328 1,928,000 1,712,329 1,928,000 Total current trade and other receivables 1,999,828 2,317,751 1,851,497 1,999,915 Equity swap derivative at fair value 1,648,388 – 1,648,388 – Non-current VAT receivables 2,295,511 2,268,800 – – Long term receivables 93,215 – – – Receivable from equity swap – secured 951,292 1,864,078 951,292 1,864,078 Total non-current trade and other receivables 3,340,018 4,132,878 951,292 1,864,078 Equity swap derivative at fair value 465,147 (96,625) 465,147 (96,625)
	1,999,828 2,317,751 1,851,497	1,999,915
	1,648,388 – 1,648,388	–
	2,295,511 2,268,800 – 93,215 – – 951,292 1,864,078 951,292	– – 1,864,078
	3,340,018 4,132,878 951,292	1,864,078
	465,147 (96,625) 465,147	(96,625)

No amounts are past due or considered impaired. No provision for impairment has been made. The maturity of trade and other receivables is in Note 28.

The Company entered into a subscription agreement, an equity swap confi rmation, an interest rate swap confi rmation and a credit support agreement on 1 April 2010. Pursuant to these agreements the Company issued 25,000,000 shares at 9p per share for an aggregate subscription amount of £2,250,000. As security for the proceeds of these shares the recipient of the shares has placed £2,250,000 in government bonds with an escrow agent as security for the proceeds receivable.

Over a 24 month period the Company will exchange £93,750 worth of government bonds per month for a cash payment the amount of which is determined against a benchmark price of $A0.12 per ordinary share. If the volume weighted average price of an ordinary share for the fi ve dealing days prior to settlement exceeds the benchmark price then the Company will receive more than 100% of the monthly payment due. If the price is less than the benchmark price, the Company will receive less than 100% of the monthly payment due. There is no higher or lower limit on the amount of the payments due to the Company under these arrangements but the total number of shares issued is fi xed.

The secured equity swap receivable is measured at amortised cost.

Fair value adjustment

The fair value of the derivative is based on the future discounted cash fl ow assuming the 90 day VWAP of shares, GBP/AUD exchange rate and applicable United Kingdom interest rate as at 31 December 2010.

Movement in the fair value of equity swap derivative is as follows:

	OPENINGBALANCE			CLOSING BALANCE
	1 JULY 2009	CHARGE FOR THE PERIOD	AMOUNTS WRITTEN OFF	30 JUNE 2010
Consolidated Group
Non-current receivable from equity swap	–	(96,625)	–	(96,625)
Company
Non-current receivable from equity swap	–	(96,625)	–	(96,625)

50 METMINCO LIMITED Report for the six months ended 31 December 2010

OPENINGBALANCE 1 JULY 2010 CHARGE FOR THE YEAR AMOUNTS WRITTEN OFF CLOSING BALANCE 31 DECEMBER 2010 Consolidated Group Current receivable from equity swap – 1,648,388 – 1,648,388 Non-current receivable from equity swap (96,625) 561,772 – 465,147 Company Non-current receivable from equity swap (96,625) 561,772 – 465,147 No other receivables are past due or considered impaired. CONSOLIDATED COMPANY NOTE 31 DECEMBER2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ NOTE 10: OTHER ASSETS CURRENT Prepayments 196,571 215,694 158,537 158,537 Total current other assets 196,571 215,694 158,537 158,537 NOTE 11: FINANCIAL ASSETS Investments in controlled entities: – Shares at cost – – 155,085,360 100,561,933 Total f nancial assets – – 155,085,360 100,561,933 NOTE 12: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD Advances to joint venture entities – 110,485 – – Equity accounted investments in joint venture entities 4,160,154 4,942,886 – – 13 4,160,154 5,053,371 – –	OPENINGBALANCE 1 JULY 2010 CHARGE FOR THE YEAR AMOUNTS WRITTEN OFF CLOSING BALANCE 31 DECEMBER 2010 Consolidated Group Current receivable from equity swap – 1,648,388 – 1,648,388 Non-current receivable from equity swap (96,625) 561,772 – 465,147 Company Non-current receivable from equity swap (96,625) 561,772 – 465,147 No other receivables are past due or considered impaired. CONSOLIDATED COMPANY NOTE 31 DECEMBER2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ NOTE 10: OTHER ASSETS CURRENT Prepayments 196,571 215,694 158,537 158,537 Total current other assets 196,571 215,694 158,537 158,537 NOTE 11: FINANCIAL ASSETS Investments in controlled entities: – Shares at cost – – 155,085,360 100,561,933 Total f nancial assets – – 155,085,360 100,561,933 NOTE 12: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD Advances to joint venture entities – 110,485 – – Equity accounted investments in joint venture entities 4,160,154 4,942,886 – – 13 4,160,154 5,053,371 – –	OPENINGBALANCE 1 JULY 2010 CHARGE FOR THE YEAR AMOUNTS WRITTEN OFF CLOSING BALANCE 31 DECEMBER 2010 Consolidated Group Current receivable from equity swap – 1,648,388 – 1,648,388 Non-current receivable from equity swap (96,625) 561,772 – 465,147 Company Non-current receivable from equity swap (96,625) 561,772 – 465,147 No other receivables are past due or considered impaired. CONSOLIDATED COMPANY NOTE 31 DECEMBER2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ NOTE 10: OTHER ASSETS CURRENT Prepayments 196,571 215,694 158,537 158,537 Total current other assets 196,571 215,694 158,537 158,537 NOTE 11: FINANCIAL ASSETS Investments in controlled entities: – Shares at cost – – 155,085,360 100,561,933 Total f nancial assets – – 155,085,360 100,561,933 NOTE 12: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD Advances to joint venture entities – 110,485 – – Equity accounted investments in joint venture entities 4,160,154 4,942,886 – – 13 4,160,154 5,053,371 – –
	196,571 215,694 158,537	158,537
	– – 155,085,360	100,561,933
	– – 155,085,360	100,561,933
		– –
		–

NOTE 13: INTEREST IN JOINT VENTURES

Interests are held in the following:

NAME PRINCIPAL ACTIVITIES COUNTRY OF INCORPORATION SHARES OWNERSHIP INTEREST 31 DECEMBER 2010 30 JUNE 2010 Unlisted: SCM Ovalle Exploration Chile Ordinary 50% 50% SCM San Lorenzo Exploration Chile Ordinary 50% 50%	CARRYING AMOUNT OF INVESTMENT 31 DECEMBER 2010 30 JUNE 2010 1,209,237 1,552,146 2,950,917 3,501,225
	4,160,154 5,053,371

In July 2008 Minera Hampton Chile Limitada (a wholly owned subsidiary of Hampton) and MN Ingenieros (an unrelated entity) formed a jointly owned (ie each party holding 50% of the equity) Chilean company, Sociedad Contractual Minera Ovalle (SCM Ovalle).

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 13: INTEREST IN JOINT VENTURES continued

In January 2009, in accordance with an agreement between Golden Amazonas (Amazonas) and Minera Hampton entered into on 19 May 2008, SCM San Lorenzo was incorporated. The shareholders of SCM San Lorenzo are Minera Hampton, with 50% of the shares, and fi ve minor shareholders with the remaining 50%. For the transfer of title of the San Lorenzo Properties to SCM San Lorenzo, Minera Hampton paid Amazonas US$3 million. Minera Hampton does not control SCM Ovalle and SCM San Lorenzo as both entities are joint ventures formed for the sole purpose of holding ownership of their respective mining tenements.

Advances by Minera Hampton to SCM Ovalle and SCM San Lorenzo are in USD and are non interest bearing with no fi xed repayment terms.

CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ a. Movements during the year in equity accounted investment in joint venture entities: Balance as at the beginning of the period 5,053,371 – – – Add new investment during the period – 5,846,527 – – Share of joint venture company’s loss after tax (7,181) (793,156) – – Impact of foreign exchange movement on balance at beginning of period (886,036) – – – Balance as at the end of the period 4,160,154 5,053,371 – – b. Equity accounted losses of joint venture companies are broken down as follows: Share of joint venture companies’ loss before income tax (7,181) (793,156) – – Share of joint venture companies’ income tax expense – – – – Share of joint venture companies’ loss after income tax (7,181) (793,156) – – c. Summarised presentation of aggregate assets, liabilities and performance of joint venture Current assets 6,608 6,682 – – Non-current assets 8,410,752 9,986,963 – – Total assets 8,417,360 9,993,645 – – Current liabilities 97,053 103,444 – – Total liabilities 97,053 103,444 – – Net assets 8,320,307 9,890,201 – – Loss after income tax (14,362) (1,586,312) – –	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ a. Movements during the year in equity accounted investment in joint venture entities: Balance as at the beginning of the period 5,053,371 – – – Add new investment during the period – 5,846,527 – – Share of joint venture company’s loss after tax (7,181) (793,156) – – Impact of foreign exchange movement on balance at beginning of period (886,036) – – – Balance as at the end of the period 4,160,154 5,053,371 – – b. Equity accounted losses of joint venture companies are broken down as follows: Share of joint venture companies’ loss before income tax (7,181) (793,156) – – Share of joint venture companies’ income tax expense – – – – Share of joint venture companies’ loss after income tax (7,181) (793,156) – – c. Summarised presentation of aggregate assets, liabilities and performance of joint venture Current assets 6,608 6,682 – – Non-current assets 8,410,752 9,986,963 – – Total assets 8,417,360 9,993,645 – – Current liabilities 97,053 103,444 – – Total liabilities 97,053 103,444 – – Net assets 8,320,307 9,890,201 – – Loss after income tax (14,362) (1,586,312) – –	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ a. Movements during the year in equity accounted investment in joint venture entities: Balance as at the beginning of the period 5,053,371 – – – Add new investment during the period – 5,846,527 – – Share of joint venture company’s loss after tax (7,181) (793,156) – – Impact of foreign exchange movement on balance at beginning of period (886,036) – – – Balance as at the end of the period 4,160,154 5,053,371 – – b. Equity accounted losses of joint venture companies are broken down as follows: Share of joint venture companies’ loss before income tax (7,181) (793,156) – – Share of joint venture companies’ income tax expense – – – – Share of joint venture companies’ loss after income tax (7,181) (793,156) – – c. Summarised presentation of aggregate assets, liabilities and performance of joint venture Current assets 6,608 6,682 – – Non-current assets 8,410,752 9,986,963 – – Total assets 8,417,360 9,993,645 – – Current liabilities 97,053 103,444 – – Total liabilities 97,053 103,444 – – Net assets 8,320,307 9,890,201 – – Loss after income tax (14,362) (1,586,312) – –
	4,160,154 5,053,371 –	–
		– –
	(7,181) (793,156) –	–
	6,608 6,682 – 8,410,752 9,986,963 –	– –
	8,417,360 9,993,645 – 97,053 103,444 –	– –
	97,053 103,444 –	–
	8,320,307 9,890,201 –	–
	(14,362) (1,586,312) –	–

52 METMINCO LIMITED Report for the six months ended 31 December 2010

NOTE 14. CONTROLLED ENTITIES

		COUNTRY OF INCORPORATION	PERCENTAGE OWNED	PERCENTAGE OWNED
			31 DECEMBER 2010	30 JUNE 2010
a.	Controlled entities consolidated		%	%
*Subsidiaries of Metminco Limited:*
	Hampton Mining Limited	Australia	100	69.4
	North Hill Holdings Group Inc	British Virgin Islands	100	100
*Wholly owned subsidiaries of Hampton*:
	Hampton Mining Peru S.A.C	Peru	100	69.4
	Minera Hampton Chile Limitada	Chile	100	69.4
*Wholly owned subsidiaries of North Hill:*
	Cerro Norte Mining Inc	British Virgin Islands	100	100
	Minera Cerro Norte SA	Peru	100	100
	Minera CN SAC	Peru	100	100

b. Acquisition of minority interest in Hampton Mining Limited

On 3 December 2010, the Company acquired the minority shareholders interest in Hampton and Hampton became a wholly owned subsidiary of the Company.

Purchase consideration: Cash payments Ordinary shares issued Less proceeds from issue of shares to non-controlling interest Acquisition reserves1 Non-controlling interest	CONSOLIDATED $ 4,150,000 45,792,752
	49,942,752 (29,068) (41,506,662)
	8,407,022

1 The acquisition reserve is the diff erence between the carrying value of the minority interest acquired and the consideration paid to acquire the minority interest.

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ NOTE 15: PROPERTY, PLANT AND EQUIPMENT *Land* At cost 314,111 372,629 – – Total land 314,111 372,629 – – *Plant and equipment* At cost 548,017 583,445 11,746 6,587 Accumulated depreciation (192,750) (135,613) (5,662) (3,704) Total plant and equipment 355,267 447,832 6,084 2,883 Total property, plant and equipment 669,378 820,461 6,084 2,883 Reconciliations Reconciliation of the carrying amounts for each class of property, plant and equipment are set out below: *Land* Carrying amount at beginning of year 372,629 – – – Additions through acquisition of entity – 347,179 – – Impact of foreign exchange movement on balance at beginning of year (58,518) 25,450 – – Depreciation – – – – Carrying amount of plant and equipment at end of year 314,111 372,629 – – *Plant and equipment* Carrying amount at beginning of year 447,832 19,333 2,883 19,333 Additions 11,160 1,298 5,158 1,298 Disposals – (13,636) – (13,636) Additions through acquisition of entity – 415,854 – – Impact of foreign exchange movement on balance at beginning of year (24,717) 30,204 – – Depreciation (79,008) (5,221) (1,957) (4,112) Carrying amount of plant and equipment at end of year 355,267 447,832 6,084 2,883 Carrying amount at end of year 669,378 820,461 6,084 2,883	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ NOTE 15: PROPERTY, PLANT AND EQUIPMENT *Land* At cost 314,111 372,629 – – Total land 314,111 372,629 – – *Plant and equipment* At cost 548,017 583,445 11,746 6,587 Accumulated depreciation (192,750) (135,613) (5,662) (3,704) Total plant and equipment 355,267 447,832 6,084 2,883 Total property, plant and equipment 669,378 820,461 6,084 2,883 Reconciliations Reconciliation of the carrying amounts for each class of property, plant and equipment are set out below: *Land* Carrying amount at beginning of year 372,629 – – – Additions through acquisition of entity – 347,179 – – Impact of foreign exchange movement on balance at beginning of year (58,518) 25,450 – – Depreciation – – – – Carrying amount of plant and equipment at end of year 314,111 372,629 – – *Plant and equipment* Carrying amount at beginning of year 447,832 19,333 2,883 19,333 Additions 11,160 1,298 5,158 1,298 Disposals – (13,636) – (13,636) Additions through acquisition of entity – 415,854 – – Impact of foreign exchange movement on balance at beginning of year (24,717) 30,204 – – Depreciation (79,008) (5,221) (1,957) (4,112) Carrying amount of plant and equipment at end of year 355,267 447,832 6,084 2,883 Carrying amount at end of year 669,378 820,461 6,084 2,883	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ NOTE 15: PROPERTY, PLANT AND EQUIPMENT *Land* At cost 314,111 372,629 – – Total land 314,111 372,629 – – *Plant and equipment* At cost 548,017 583,445 11,746 6,587 Accumulated depreciation (192,750) (135,613) (5,662) (3,704) Total plant and equipment 355,267 447,832 6,084 2,883 Total property, plant and equipment 669,378 820,461 6,084 2,883 Reconciliations Reconciliation of the carrying amounts for each class of property, plant and equipment are set out below: *Land* Carrying amount at beginning of year 372,629 – – – Additions through acquisition of entity – 347,179 – – Impact of foreign exchange movement on balance at beginning of year (58,518) 25,450 – – Depreciation – – – – Carrying amount of plant and equipment at end of year 314,111 372,629 – – *Plant and equipment* Carrying amount at beginning of year 447,832 19,333 2,883 19,333 Additions 11,160 1,298 5,158 1,298 Disposals – (13,636) – (13,636) Additions through acquisition of entity – 415,854 – – Impact of foreign exchange movement on balance at beginning of year (24,717) 30,204 – – Depreciation (79,008) (5,221) (1,957) (4,112) Carrying amount of plant and equipment at end of year 355,267 447,832 6,084 2,883 Carrying amount at end of year 669,378 820,461 6,084 2,883
	314,111 372,629 –	–
	548,017 583,445 11,746 (192,750) (135,613) (5,662)	6,587 (3,704)
	355,267 447,832 6,084	2,883
	669,378 820,461 6,084	2,883
	372,629 – – – 347,179 – (58,518) 25,450 – – – –	– – – –
	314,111 372,629 –	–
	447,832 19,333 2,883 11,160 1,298 5,158 – (13,636) – – 415,854 – (24,717) 30,204 – (79,008) (5,221) (1,957)	19,333 1,298 (13,636) – – (4,112)
	355,267 447,832 6,084	2,883
	669,378 820,461 6,084	2,883

54 METMINCO LIMITED Report for the six months ended 31 December 2010

CONSOLIDATED	COMPANY	COMPANY
31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010		30 JUNE 2010
$	$ $	$
NOTE 16: EXPLORATION AND EVALUATION
EXPENDITURE
Costs carried forward in respect of areas of interest
in:
– exploration and evaluation phases at the end of
year 102,297,461 101,608,247 – *Reconciliations*		–
Carrying amount at the beginning of year 101,608,247	1,035,963 –	1,035,963
Expenditure incurred during current year 3,388,601	1,450,772 –	108,701
Additions through acquisition of entity – 100,721,654 –		–
Impact of foreign exchange movement during the (2,689,511)	(12,129) –	–
year
Exploration written of (9,875)	(1,588,013) –	(1,144,664)
Carrying amount at the end of year 102,297,461 101,608,247 –		–

Recoverability of the carrying amount of exploration assets is dependent upon the successful recovery of mineral reserves. Capitalised costs amounting to $3,388,351 (for the year ended 30 June 2010: $1,450,772) have been included in cash fl ows from investing activities.

NOTE 17: TRADE AND OTHER PAYABLES

Trade payables Amount payable to wholly owned subsidiary Other payables and accrued expenses NOTE 18: BORROWINGS NON CURRENT Unsecured liabilities Convertible notes Conversion option at fair value	700,434 – 1,321,060 2,021,494 491,981 1,209,911	855,273 – 2,494,910 3,350,183 4,669,079 2,185,129	208,216 – 1,041,599 1,249,815 491,981 1,209,911	526,661 37,191 2,192,368 2,756,220 4,669,079 2,185,129
Total non-current borrowings Total borrowings	1,701,892 1,701,892	6,854,208 6,854,208	1,701,892 1,701,892	6,854,208 6,854,208

Convertible loan facility

The Company has a convertible loan facility of $US0.5 million (30 June 2010: US$4 million) repayable on or before 1 April 2012. The interest rate is fi xed at 16% per annum which is capitalised at $0.12 per share. The principal may be capitalised at the lender’s option at any time after six months following drawdown at the lower of A$0.12 per share and 80% of the average mid market closing price for the Company’s shares on the ASX over the three dealing days prior to service of the relevant notice. The lender may convert earlier on a change of control of the Company, defi ned as the acquisition of 50% or more of the voting rights in the shares of the Company by a party or a change in more than 50% in the board of directors, a capital raising by the Company of $US2 million or more, or upon the disposal of a material asset. The Company repaid $US3.5 million in convertible loans during the period by issue of 29,018,269 shares in the Company (Lenders exercised their right to convert principal into shares) and payment of an early repayment fee US$560,000 (A$ 558,488) has been expensed to the profi t and loss. At balance date the fair value of the conversion on the convertible notes is A$1,209,911 (30 Jun 2010:A$2,185,129).

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 19: PROVISIONS

Consolidated Group Opening balance at 1 July 2010 Additional provisions Balance at 31 December 2010 Company Opening balance at 1 July 2010 Additional provisions Balance at 31 December 2010 CONSOLIDATED 31 DECEMBER 2010 30 JUNE 2010 $ $ *Analysis of Total Provisions* Current 73,382 68,519 NOTE 20: CONTRIBUTED EQUITY 1,231,107,839 (30 June 2010: 778,862,608) fully paid ordinary shares 196,501,824 106,133,934 NO. NO. a. Movements in ordinary share capital Balance at beginning of the reporting period 778,862,608 53,250,005 Shares issued – 9 July 2009 – 303,690,732 – 26 September 2009 – 16,666,667 – 11 December 2009 – 7,140,529 – 23 December 2009 – 30,000 – 19 January 2009 – 170,000 – 1 March 2010 – 111,793,842 – 3 May 2010 – 72,887,884 – 14 May 2010 – 150,000,000 – 19 May 2010 – 59,899,616 – 30 June 2010 – 3,333,333 – 1 July 2010 1,556,360 – – 1 July 2010 9,999,999 – – 19 July 2010 23,333,334 – – 28 July 2010 21,506,248 – – 1 October 2010 1,374,430 – – 29 November 2010 150,000,000 – – 3 December 2010 212,834,076 – – 3 December 2010 1,350,000 – – 3 December 2010 12,500 – – 17 December 2010 100 – – 24 December 2010 30,114,160 – – 31 December 2010 164,024 – At the end of the reporting period 1,231,107,839 778,862,608	SHORT-TERM EMPLOYEE BENEFITS TOTAL $ $ 68,519 68,519 4,863 4,863	SHORT-TERM EMPLOYEE BENEFITS TOTAL $ $ 68,519 68,519 4,863 4,863
IDATED 30 JUNE 2010 $ 68,519	73,382 73,382 23,036 23,036 (20,794) (20,794)
	2,242 2,242
	COMPANY 31 DECEMBER 2010 30 JUNE 2010 $ $ 2,242 23,036
	31 DECEMBER 2010
	$

	2,242
106,133,934		106,133,934
	196,501,824
NO. 53,250,005 303,690,732 16,666,667 7,140,529 30,000 170,000 111,793,842 72,887,884 150,000,000 59,899,616 3,333,333 – – – – – – – – – – – –	NO.	NO. 53,250,005 303,690,732 16,666,667 7,140,529 30,000 170,000 111,793,842 72,887,884 150,000,000 59,899,616 3,333,333 – – – – – – – – – – – –

	778,862,608

	–
	–
	–
	–
	–
	–
	–
	–
	–
	–
	1,556,360
	9,999,999
	23,333,334
	21,506,248
	1,374,430
	150,000,000
	212,834,076
	1,350,000
	12,500
	100
	30,114,160
	164,024
778,862,608	1,231,107,839	778,862,608

56 METMINCO LIMITED Report for the six months ended 31 December 2010

CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ b. Movements in ordinary share capital Balance at beginning of the reporting period 106,133,934 5,399,061 106,133,934 5,399,061 Shares issued – 9 July 2009 – 39,479,795 – 39,479,795 – 26 September 2009 – 2,227,180 – 2,227,180 – 11 December 2009 – 1,075,188 – 1,075,188 – 23 December 2009 – 5,100 – 5,100 – 19 January 2009 – 28,900 – 28,900 – 1 March 2010 – 14,838,822 – 14,838,822 – 3 May 2010 – 10,933,183 – 10,933,183 – 14 May 2010 – 22,500,000 – 22,500,000 – 19 May 2010 – 8,984,942 – 8,984,942 – 30 June 2010 – 661,763 – 661,763 – 1 July 2010 1,425,000 – 1,425,000 – – 19 July 2010 3,251,665 – 3,251,665 – – 28 July 2010 3,225,937 – 3,225,937 – – 1 October 2010 274,886 – 274,886 – – 29 November 2010 29,500,000 – 29,500,000 – – 3 December 2010 41,525,286 – 41,525,286 – – 3 December 2010 405,000 – 405,000 – – 3 December 2010 3,125 – 3,125 – – 17 December 2010 35 – 35 – – 24 December 2010 10,690,526 – 10,690,526 – – 31 December 2010 66,430 – 66,430 – At the end of the reporting period 196,501,824 106,133,934 196,501,824 106,133,934	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ b. Movements in ordinary share capital Balance at beginning of the reporting period 106,133,934 5,399,061 106,133,934 5,399,061 Shares issued – 9 July 2009 – 39,479,795 – 39,479,795 – 26 September 2009 – 2,227,180 – 2,227,180 – 11 December 2009 – 1,075,188 – 1,075,188 – 23 December 2009 – 5,100 – 5,100 – 19 January 2009 – 28,900 – 28,900 – 1 March 2010 – 14,838,822 – 14,838,822 – 3 May 2010 – 10,933,183 – 10,933,183 – 14 May 2010 – 22,500,000 – 22,500,000 – 19 May 2010 – 8,984,942 – 8,984,942 – 30 June 2010 – 661,763 – 661,763 – 1 July 2010 1,425,000 – 1,425,000 – – 19 July 2010 3,251,665 – 3,251,665 – – 28 July 2010 3,225,937 – 3,225,937 – – 1 October 2010 274,886 – 274,886 – – 29 November 2010 29,500,000 – 29,500,000 – – 3 December 2010 41,525,286 – 41,525,286 – – 3 December 2010 405,000 – 405,000 – – 3 December 2010 3,125 – 3,125 – – 17 December 2010 35 – 35 – – 24 December 2010 10,690,526 – 10,690,526 – – 31 December 2010 66,430 – 66,430 – At the end of the reporting period 196,501,824 106,133,934 196,501,824 106,133,934	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ b. Movements in ordinary share capital Balance at beginning of the reporting period 106,133,934 5,399,061 106,133,934 5,399,061 Shares issued – 9 July 2009 – 39,479,795 – 39,479,795 – 26 September 2009 – 2,227,180 – 2,227,180 – 11 December 2009 – 1,075,188 – 1,075,188 – 23 December 2009 – 5,100 – 5,100 – 19 January 2009 – 28,900 – 28,900 – 1 March 2010 – 14,838,822 – 14,838,822 – 3 May 2010 – 10,933,183 – 10,933,183 – 14 May 2010 – 22,500,000 – 22,500,000 – 19 May 2010 – 8,984,942 – 8,984,942 – 30 June 2010 – 661,763 – 661,763 – 1 July 2010 1,425,000 – 1,425,000 – – 19 July 2010 3,251,665 – 3,251,665 – – 28 July 2010 3,225,937 – 3,225,937 – – 1 October 2010 274,886 – 274,886 – – 29 November 2010 29,500,000 – 29,500,000 – – 3 December 2010 41,525,286 – 41,525,286 – – 3 December 2010 405,000 – 405,000 – – 3 December 2010 3,125 – 3,125 – – 17 December 2010 35 – 35 – – 24 December 2010 10,690,526 – 10,690,526 – – 31 December 2010 66,430 – 66,430 – At the end of the reporting period 196,501,824 106,133,934 196,501,824 106,133,934
	– 39,479,795 – – 2,227,180 – – 1,075,188 – – 5,100 – – 28,900 – – 14,838,822 – – 10,933,183 – – 22,500,000 – – 8,984,942 – – 661,763 – 1,425,000 – 1,425,000 3,251,665 – 3,251,665 3,225,937 – 3,225,937 274,886 – 274,886 29,500,000 – 29,500,000 41,525,286 – 41,525,286 405,000 – 405,000 3,125 – 3,125 35 – 35 10,690,526 – 10,690,526 66,430 – 66,430	39,479,795 2,227,180 1,075,188 5,100 28,900 14,838,822 10,933,183 22,500,000 8,984,942 661,763 – – – – – – – – – – –
	196,501,824 106,133,934 196,501,824	106,133,934

On 1 July 2010 the Company issued 9,999,999 shares to raise $1.5 million gross for working capital purposes. The shares rank for dividends immediately.

On 19 July 2010 the Company issued 23,333,334 shares to raise $3.5 million gross for working capital purposes. The shares rank for dividends immediately.

On 28 July 2010 the Company issued 21,506,248 shares as consideration for the acquisition of 5,376,562 fully paid ordinary shares in Hampton and issued 1,556,360 shares in settlement of June 2010 quarter interest payable to convertible note holders. The shares rank for dividends immediately.

On 1 October 2010 the Company issued 1,374,430 shares in settlement of September 2010 quarter interest payable to convertible note holders. The shares rank for dividends immediately.

On 29 November 2010 the Company issued 150,000,000 shares to raise A$30 million gross to fund ongoing exploration of South American assets and specifi cally to fund a 50,000 metre drill program at the Los Calatos project in southern Peru. The shares rank for dividends immediately.

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 20: CONTRIBUTED EQUITY continued

On 3 December 2010 the Company issued 214,184,076 shares as follows:

160,000,000 shares issued to Takoradi Limited and 35,000,000 shares issued to the Sentient Group as part consideration for 56,511,906 fully paid ordinary shares in Hampton.
11,434,076 shares were issued to Notesan Pty Limited as consideration for 2,858,519 fully paid ordinary shares in Hampton.
6,400,000 shares were issued to AJ Holdings Corporation as consideration for 1,600,000 fully paid ordinary shares in Hampton.
1,350,000 shares were issued in lieu of cash for consulting fees.

The shares rank for dividends immediately.

On 17 December 2011 the Company issued 12,500 shares for options exercised at $0.25 cents and issued 100 shares at $0.35 cents in accordance with the Prospectus dated 9 December 2010.

On 24 December 2010 the Company issued 30,114,160 shares on exercise of conversion rights by convertible note holders in settlement of US$3.6 million in loans and accrued interest to date of early repayment. The shares rank for dividends immediately.

On 31 December 2010 the Company issued 164,024 shares $0.12 cents in settlement of interest for the quarter ended 31 December 2010 in respect of a US$ 500,000 convertible note facility. The shares rank for dividends immediately.

c. Capital Management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confi dence and to sustain future development of the business to provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern.

The Group’s debt and capital includes ordinary share capital, convertible notes and fi nancial liabilities, supported by fi nancial assets.

There are no externally imposed capital requirements.

Management eff ectively manages the Group’s capital by assessing the Group’s fi nancial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

Management intends to raise additional capital through equity raisings within the next 12 months.

There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. This strategy is to ensure that the Group’s gearing ratio remains between 1% and 10%. The gearing ratios for the half year ended 31 December 2010 are as follows:

CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 NOTE $ $ $ $ Face value of convertible notes 491,981 4,669,079 491,981 4,669,079 Conversion options at fair value 1,209,911 2,185,129 1,209,911 2,185,129 Total borrowings 18 1,701,892 6,854,208 1,701,892 6,854,208 The loss on fair value will only be incurred if the borrowings are repaid by the issue of shares. Borrowings repayable by cash 491,981 4,669,079 491,981 4,669,079 Less cash and cash equivalents 8 (23,189,432) (2,159,428) (21,572,370) (1,189,206) Net debt (22,697,451) 2,509,651 (21,080,389) 3,479,873 Total equity 134,169,609 105,938,295 134,169,609 96,046,463 Gearing ratio (16.9)% 2.4% (15.7)% 3.6%	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 NOTE $ $ $ $ Face value of convertible notes 491,981 4,669,079 491,981 4,669,079 Conversion options at fair value 1,209,911 2,185,129 1,209,911 2,185,129 Total borrowings 18 1,701,892 6,854,208 1,701,892 6,854,208 The loss on fair value will only be incurred if the borrowings are repaid by the issue of shares. Borrowings repayable by cash 491,981 4,669,079 491,981 4,669,079 Less cash and cash equivalents 8 (23,189,432) (2,159,428) (21,572,370) (1,189,206) Net debt (22,697,451) 2,509,651 (21,080,389) 3,479,873 Total equity 134,169,609 105,938,295 134,169,609 96,046,463 Gearing ratio (16.9)% 2.4% (15.7)% 3.6%	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 NOTE $ $ $ $ Face value of convertible notes 491,981 4,669,079 491,981 4,669,079 Conversion options at fair value 1,209,911 2,185,129 1,209,911 2,185,129 Total borrowings 18 1,701,892 6,854,208 1,701,892 6,854,208 The loss on fair value will only be incurred if the borrowings are repaid by the issue of shares. Borrowings repayable by cash 491,981 4,669,079 491,981 4,669,079 Less cash and cash equivalents 8 (23,189,432) (2,159,428) (21,572,370) (1,189,206) Net debt (22,697,451) 2,509,651 (21,080,389) 3,479,873 Total equity 134,169,609 105,938,295 134,169,609 96,046,463 Gearing ratio (16.9)% 2.4% (15.7)% 3.6%
	1,701,892 6,854,208 1,701,892	6,854,208
	wings are repaid by the issue of shares. 491,981 4,669,079 491,981 (23,189,432) (2,159,428) (21,572,370)	4,669,079 (1,189,206)
	(22,697,451) 2,509,651 (21,080,389) 134,169,609 105,938,295 134,169,609	3,479,873 96,046,463
		3.6%

58 METMINCO LIMITED Report for the six months ended 31 December 2010

NOTE 21: OPTIONS

NOTE 21: OPTIONS
			ISSUED	EXERCISED	LAPSED
	EXERCISE PRICE	OUTSTANDING AT	DURING	DURING	DURING		OUTSTANDING AT
EXPIRY DATE	$	30 JUNE 2010	HALF YEAR	HALF YEAR	HALF YEAR		31 DECEMBER 2010
Listed
31 December 2010
4 December 2012	$0.25	27,230,017	–	12,500		–	27,217,517
Unlisted
31 December 2010
31 July 20121	$0.30	–	4,500,000	–		–	4,500,000
6 December 20132	$0.44	–	14,250,000	–		–	14,250,000
6 December 20133	$0.525	–	14,250,000	–		–	14,250,000
6 December 20134	$0.44	–	2,000,000	–		–	2,000,000
6 December 20135	$0.525	–	2,000,000	–		–	2,000,000
30 June 2010
4 December 20126	$0.25	26,230,017	1,000,000	–		–	27,230,017

Notes:

1 On 24 September 2010 the Company issued 4,500,000 options to BGF Equities exercisable at $0.30 per share on or before 31 July 2012 in lieu of cash payable for corporate advisory services. The fair value was determined by applying the Binomial valuation methodology on date of issue, weighted average share price on date of issue of $0.17, no dividends, the terms of the options and an estimated option life to 31 March 2012 based on the Company’s best estimate of the expected exercise patterns, which may not eventuate. As the options are not transferrable the holder will only realise a benefi t through exercise of the options. On exercise of an option BGF will be granted a new option with an exercise price of $0.35 per share and an expiry date 2 years from date of issue which in accordance with AASB2 will be valued if and when when issued.
2 On 6 December 2010 the Company issued 14,250,000 options (6,000,000 Director Options and 8,250,000 Employee Options) at $0.44 cents expiring 6 December 2013. The fair value was determined by applying the Binomial valuation methodology on date of issue, weighted average share price on date of issue of $0.17, no dividends, the terms of the options and an estimated option life to 31 March 2012 based on the Company’s best estimate of the expected exercise patterns, which may not eventuate. As the options are not transferrable and the expiry date is contingent on a number of terms and conditions set out the in the Company’s Employee Share Option Plan, the holder will only realise a benefi t through exercise of the options. The option life has been estimated to be 31 March 2012 based on the Company’s best estimate of the expected exercise patterns which may not eventuate in the future.
3 On 6 December 2010 the Company issued 14,250,000 options (6,000,000 Director Options and 8,250,000 Employee Options) at $0.525 cents expiring 6 December 2013. The fair value was determined by applying the Binomial valuation methodology on date of issue, weighted average share price on date of issue of $0.17, no dividends, the terms of the options and an estimated option life to 31 March 2012 based on the Company’s best estimate of the expected exercise patterns, which may not eventuate. As the options are not transferrable and the expiry date is contingent on a number of terms and conditions set out the in the Company’s Employee Share Option Plan, the holder will only realise a benefi t through exercise of the options. The option life has been estimated to be 31 March 2012 based on the Company’s best estimate of the expected exercise patterns which may not eventuate in the future.
4 On 6 December 2010 the Company issued 2,000,000 options at $0.44 cents in lieu of cash payment for services expiring 6 December 2013. The fair value was determined by applying the Binomial valuation methodology on date of issue, weighted average share price on date of issue of $0.17, no dividends, the terms of the options and an estimated option life to 31 March 2012 based on the Company’s best estimate of the expected exercise patterns, which may not eventuate. As the options are not transferrable and the expiry date is contingent on a number of terms and conditions set out the in the Company’s Employee Share Option Plan, the holder will only realise a benefi t through exercise of the options. The option life has been estimated to be 31 March 2012 based on the Company’s best estimate of the expected exercise patterns which may not eventuate in the future.
5 On 6 December 2010 the Company issued 2,000,000 options @ $0.525 cents in lieu of cash payment for services. The fair value was determined by applying the Binomial valuation methodology on date of issue, weighted average share price on date of issue of $0.35, no dividends ,the terms of the options and an estimated option life to 31 March 2012 based on the Company’s best estimate of the expected exercise patterns, which may not eventuate. As the options are not transferrable and the expiry date is contingent on a number of terms and conditions set out the in the Company’s Employee Share Option Plan, the holder will only realise a benefi t through exercise of the options. The option life has been estimated to be 31 March 2012 based on the Company’s best estimate of the expected exercise patterns which may not eventuate in the future.
6 The options were part of share based remuneration to Shane Turner, a director. The fair value was determined by applying the Black Scholes valuation methodology.

Included under employee and directors’ benefi t expense in Note 3 is $2,401,382 (Jun 2010: $53,000) and under Corporate expenses $328,646 (Jun 2010: Nil) which relates to equity settled share based payments transactions.

The exercise prices of options range from $0.25 to $0.525 and the weighted average life assuming maximum life is 881 days.

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

CONSOLIDATED	COMPANY	COMPANY
31 DECEMBER 2010 30	JUNE 2010 31 DECEMBER 2010	30 JUNE 2010
$	$ $	$
NOTE 22: CAPITAL AND LEASING
COMMITMENTS
a. Operating Lease Commitments
Non-cancellable operating leases contracted for but
not capitalised in the f nancial statements
Payable (minimum lease payments)
– not later than 12 months 261,514	197,152 –	–
– between 12 months and 5 years 656,955	262,286 –	–
– greater than 5 years –	– –	–
918,469 The Group has non-cancellable leases over f ve premises in Chile and Peru with	459,438 – – terms ranging from 6 to 37 months. Rent is
payable monthly in advance.
b. Exploration Tenement Licence
Commitments
Non-cancellable licence fees for exploration
tenements contracted for but not capitalised in the
f nancial statements
Payable (minimum lease payments)
– not later than 12 months 415,096	661,821 –	–

NOTE 23: COMMITMENTS AND CONTINGENT LIABILITIES

The holder of the surface titles in respect of the Mollacas Project, Agrícola Bauzá Ltda has fi led various actions against Minera Hampton (a wholly owned subsidiary of Hampton), MN Ingenieros (an unrelated entity) and Sociedad Contractual Minera Ovalle (jointly owned and controlled by Minera Hampton and MN Ingenieros) in respect of claims relating to access and environmental accusations. All claims determined by the Chilean judiciary to date have been successfully defended.

On 23 August 2007 Minera Hampton entered into an option to purchase 100% of the Genesis tenements, forming part of the Camaron project, located in the Vicuna area of Chile which expired late December 2010. In Janaury 2011 Minera Hampton fi nalised the purchase of a 33.% interest in the Genesis tenements for US$782,000 (A$782,000) and enterered into an 18 month option agreement to acquire the remaining 67%. On signing the option agreement the Company paid US$370,000 (A$370,000) with 2 further option payments of US$370,000 (A$370,000) payable on the six month and twleve month anniversary. If Minera Hampton exercises the option then Minera Hampton must pay US$1 million on the exercise date and 3 further annual payments each of US$1 million on the second, third and fourth anniversary of exercise of the option (in total $US 4 million – A$ 4 million) as an advance payment against future royalty payments, and pay 1.7% of the Net Smelter Return on future production from the Genesis tenements.

60 METMINCO LIMITED Report for the six months ended 31 December 2010

NOTE 24: OPERATING SEGMENTS

The Company’s primary activity is mineral exploration in the geographic area of South America. This focus is consistent with the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

The Group is managed primarily for the sole purpose of mineral exploration.

Basis of accounting for purposes of reporting by operating segments

a. Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker with respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual and half yearly fi nancial statements of the Group.

b. Inter-segment transactions

There are no inter segment transactions.

c. Segment assets

Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value from that asset. In the majority of instances, segment assets are clearly identifi able on the basis of their nature and physical location.

d. Segment liabilities

Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

e. Unallocated items

The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

Derivatives
Net gains on disposal of available-for-sale investments
Impairment of assets and other non-recurring items of revenue or expense
Income tax expense
Deferred tax assets and liabilities
Current tax liabilities
Other fi nancial liabilities
Intangible assets
Discontinuing operations
Retirement benefi t obligations.

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 24: OPERATING SEGMENTS continued

MINERAL EXPLORATION UNALLOCATED TOTAL 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ $ $ i. Segment performance Other income 1,354 3,827 66,341 47,470 67,695 51,297 Total segment revenue 1,354 3,827 66,341 47,470 67,695 51,297 Total group revenue 67,695 51,297 Segment loss before tax 980,744 1,078,744 10,359,654 6,697,848 11,340,398 7,776,592 Loss before tax from continuing operations 11,340,398 7,776,592 Depreciation and amortisation expense included in segment result 77,050 1,109 1,958 4,112 79,008 5,221 MINERAL EXPLORATION UNALLOCATED TOTAL 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ $ $ ii. Segment assets Segment assets 111,319,144 111,093,211 26,647,233 5,117,994 137,966,377 116,211,205 Segment asset increases for the period – capital expenditure 3,394,353 – 5,158 1,298 3,399,511 1,298 – acquisitions – 110,742,495 21,755,171 – 21,755,171 110,742,495 3,394,353 110,742,495 21,760,329 1,298 25,154,682 110,743,793 Included in segment assets are: – Equity accounted associates and joint ventures 4,160,154 5,053,371 – – 4,160,154 5,053,371 iii. Segment liabilities Segment liabilities 842,819 639,446 2,953,949 9,633,464 3,796,768 10,272,910 Reconciliation of segment liabilities to group liabilities Total group liabilities 3,796,768 10,272,910	MINERAL EXPLORATION UNALLOCATED TOTAL 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ $ $ i. Segment performance Other income 1,354 3,827 66,341 47,470 67,695 51,297 Total segment revenue 1,354 3,827 66,341 47,470 67,695 51,297 Total group revenue 67,695 51,297 Segment loss before tax 980,744 1,078,744 10,359,654 6,697,848 11,340,398 7,776,592 Loss before tax from continuing operations 11,340,398 7,776,592 Depreciation and amortisation expense included in segment result 77,050 1,109 1,958 4,112 79,008 5,221 MINERAL EXPLORATION UNALLOCATED TOTAL 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ $ $ ii. Segment assets Segment assets 111,319,144 111,093,211 26,647,233 5,117,994 137,966,377 116,211,205 Segment asset increases for the period – capital expenditure 3,394,353 – 5,158 1,298 3,399,511 1,298 – acquisitions – 110,742,495 21,755,171 – 21,755,171 110,742,495 3,394,353 110,742,495 21,760,329 1,298 25,154,682 110,743,793 Included in segment assets are: – Equity accounted associates and joint ventures 4,160,154 5,053,371 – – 4,160,154 5,053,371 iii. Segment liabilities Segment liabilities 842,819 639,446 2,953,949 9,633,464 3,796,768 10,272,910 Reconciliation of segment liabilities to group liabilities Total group liabilities 3,796,768 10,272,910	MINERAL EXPLORATION UNALLOCATED TOTAL 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER 2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ $ $ i. Segment performance Other income 1,354 3,827 66,341 47,470 67,695 51,297 Total segment revenue 1,354 3,827 66,341 47,470 67,695 51,297 Total group revenue 67,695 51,297 Segment loss before tax 980,744 1,078,744 10,359,654 6,697,848 11,340,398 7,776,592 Loss before tax from continuing operations 11,340,398 7,776,592 Depreciation and amortisation expense included in segment result 77,050 1,109 1,958 4,112 79,008 5,221 MINERAL EXPLORATION UNALLOCATED TOTAL 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ $ $ ii. Segment assets Segment assets 111,319,144 111,093,211 26,647,233 5,117,994 137,966,377 116,211,205 Segment asset increases for the period – capital expenditure 3,394,353 – 5,158 1,298 3,399,511 1,298 – acquisitions – 110,742,495 21,755,171 – 21,755,171 110,742,495 3,394,353 110,742,495 21,760,329 1,298 25,154,682 110,743,793 Included in segment assets are: – Equity accounted associates and joint ventures 4,160,154 5,053,371 – – 4,160,154 5,053,371 iii. Segment liabilities Segment liabilities 842,819 639,446 2,953,949 9,633,464 3,796,768 10,272,910 Reconciliation of segment liabilities to group liabilities Total group liabilities 3,796,768 10,272,910
	3,394,353 – 5,158 1,298 3,399,511 – 110,742,495 21,755,171 – 21,755,171	1,298 110,742,495
	3,394,353 110,742,495 21,760,329 1,298 25,154,682	110,743,793
	4,160,154 5,053,371 – – 4,160,154	5,053,371
	842,819 639,446 2,953,949 9,633,464 3,796,768	10,272,910
	3,796,768	10,272,910

iv. Revenue by geographical region

Revenue attributable to external customers is disclosed below, based on the location of the external customer:

Australia South America Total revenue v. Assets by geographical region The location of segment assets by geographical location of the assets is disclosed below: Australia South America Total assets	66,341 47,469 1,354 3,828
	67,695 51,297
	26,647,233 5,117,994 111,319,144 111,093,211
	137,966,377 116,211,205

62 METMINCO LIMITED Report for the six months ended 31 December 2010

CONSOLIDATED COMPANY 6 MONTHS ENDED 31 DECEMBER2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ NOTE 25: NOTES TO THE STATEMENTS OF CASH FLOWS a. Reconciliation of Cash Cash at the end of the period as shown in the statements of cash f ows is reconciled to items in the statement of f nancial position as follows: Cash and cash equivalents 23,189,432 2,159,428 21,572,370 1,189,206 23,189,432 2,159,428 21,572,370 1,189,206 b. Reconciliation of loss from ordinary activities after Income Tax to net cash used in operating activities Loss from ordinary activities after income tax (11,340,398) (7,776,592) (10,359,655) (6,697,848) Add/(less) non-cash items: Depreciation and amortisation 79,008 5,221 1,958 4,112 Gain on sale of equipment – (362) – (362) Gain on consolidation of subsidiary – (600,062) – – Fair value loss on convertible notes 5,882,403 2,185,129 5,882,403 2,185,129 Share of net loss of associates 7,181 793,156 – – Exchange loss/(gains) 334,224 (170,942) 494,727 13,436 Impairment of exploration properties 9,875 1,588,013 – 1,144,664 Expense on grant of options 2,730,028 53,000 2,730,028 53,000 Shares issued in lieu of payment for services 405,000 – 405,000 – Finance costs 730,357 186,763 730,357 186,763 Changes in assets and liabilities, net of the ef ects of purchase and disposal of controlled entities during the period: Decrease/(Increase) in receivables (227,111) 71,479 334,987) (2,223) Decrease/(Increase) in prepayments 19,123 (156,167) – (156,167) (Increase)/Decrease in payables (541,969) 426,868 (737,867) 846,837 (Increase)/Decrease in provisions 4,863 28,577 (20,795) 19,012 Net cash used in operating activities (4,116,082) (3,269,294) (3,417,497) (2,307,022)	CONSOLIDATED COMPANY 6 MONTHS ENDED 31 DECEMBER2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ NOTE 25: NOTES TO THE STATEMENTS OF CASH FLOWS a. Reconciliation of Cash Cash at the end of the period as shown in the statements of cash f ows is reconciled to items in the statement of f nancial position as follows: Cash and cash equivalents 23,189,432 2,159,428 21,572,370 1,189,206 23,189,432 2,159,428 21,572,370 1,189,206 b. Reconciliation of loss from ordinary activities after Income Tax to net cash used in operating activities Loss from ordinary activities after income tax (11,340,398) (7,776,592) (10,359,655) (6,697,848) Add/(less) non-cash items: Depreciation and amortisation 79,008 5,221 1,958 4,112 Gain on sale of equipment – (362) – (362) Gain on consolidation of subsidiary – (600,062) – – Fair value loss on convertible notes 5,882,403 2,185,129 5,882,403 2,185,129 Share of net loss of associates 7,181 793,156 – – Exchange loss/(gains) 334,224 (170,942) 494,727 13,436 Impairment of exploration properties 9,875 1,588,013 – 1,144,664 Expense on grant of options 2,730,028 53,000 2,730,028 53,000 Shares issued in lieu of payment for services 405,000 – 405,000 – Finance costs 730,357 186,763 730,357 186,763 Changes in assets and liabilities, net of the ef ects of purchase and disposal of controlled entities during the period: Decrease/(Increase) in receivables (227,111) 71,479 334,987) (2,223) Decrease/(Increase) in prepayments 19,123 (156,167) – (156,167) (Increase)/Decrease in payables (541,969) 426,868 (737,867) 846,837 (Increase)/Decrease in provisions 4,863 28,577 (20,795) 19,012 Net cash used in operating activities (4,116,082) (3,269,294) (3,417,497) (2,307,022)	CONSOLIDATED COMPANY 6 MONTHS ENDED 31 DECEMBER2010 12 MONTHS ENDED 30 JUNE 2010 6 MONTHS ENDED 31 DECEMBER2010 12 MONTHS ENDED 30 JUNE 2010 $ $ $ $ NOTE 25: NOTES TO THE STATEMENTS OF CASH FLOWS a. Reconciliation of Cash Cash at the end of the period as shown in the statements of cash f ows is reconciled to items in the statement of f nancial position as follows: Cash and cash equivalents 23,189,432 2,159,428 21,572,370 1,189,206 23,189,432 2,159,428 21,572,370 1,189,206 b. Reconciliation of loss from ordinary activities after Income Tax to net cash used in operating activities Loss from ordinary activities after income tax (11,340,398) (7,776,592) (10,359,655) (6,697,848) Add/(less) non-cash items: Depreciation and amortisation 79,008 5,221 1,958 4,112 Gain on sale of equipment – (362) – (362) Gain on consolidation of subsidiary – (600,062) – – Fair value loss on convertible notes 5,882,403 2,185,129 5,882,403 2,185,129 Share of net loss of associates 7,181 793,156 – – Exchange loss/(gains) 334,224 (170,942) 494,727 13,436 Impairment of exploration properties 9,875 1,588,013 – 1,144,664 Expense on grant of options 2,730,028 53,000 2,730,028 53,000 Shares issued in lieu of payment for services 405,000 – 405,000 – Finance costs 730,357 186,763 730,357 186,763 Changes in assets and liabilities, net of the ef ects of purchase and disposal of controlled entities during the period: Decrease/(Increase) in receivables (227,111) 71,479 334,987) (2,223) Decrease/(Increase) in prepayments 19,123 (156,167) – (156,167) (Increase)/Decrease in payables (541,969) 426,868 (737,867) 846,837 (Increase)/Decrease in provisions 4,863 28,577 (20,795) 19,012 Net cash used in operating activities (4,116,082) (3,269,294) (3,417,497) (2,307,022)
	23,189,432 2,159,428 21,572,370	1,189,206
		(6,697,848) 4,112 (362) – 2,185,129 – 13,436 1,144,664 53,000 – 186,763 (2,223) (156,167) 846,837 19,012
		(2,307,022)

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 25: NOTES TO THE STATEMENTS OF CASH FLOWS continued

CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ c. Acquisition of Entities During the period ended 31 December 2010 the Company completed acquisition of 100% of Hampton ( 30 June 2010: a 69.4% ownership interest in Hampton and a 100% ownership interest in North Hill). Details of this transaction are: Purchase consideration Consisting of: – Cash consideration 4,150,000 17,695,604 4,150,000 17,695,604 – Ordinary shares 45,792,752 82,497,920 45,792,752 82,497,920 Total consideration 49,942,752 100,193,524 49,942,752 100,193,524 Cash consideration 4,150,000 17,695,604 4,150,000 17,695,604 Cash outf ow1 4,150,000 15,605,472 4,150,000 15,605,472 Assets and liabilities held at acquisition date: Cash 2,090,132 2,090,132 Receivables – 2,474,601 – 2,474,601 Prepayments – 87,778 – 87,778 Investments – 4,605,297 – 4,605,297 Property, plant and equipment – 763,033 – 763,033 Exploration – 100,721,654 – 100,721,654 Payables – (1,157,936) – (1,157,936) Provisions – (51,116) – (51,116) – 109,533,443 – 109,533,443 Gain on consolidation – (600,062) – (600,062) Minority equity interests in acquisitions – (9,339,919) – (9,339,919) Acquisition reserve (41,506,662) – – – 8,436,090 99,593,462 – 99,593,462	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ c. Acquisition of Entities During the period ended 31 December 2010 the Company completed acquisition of 100% of Hampton ( 30 June 2010: a 69.4% ownership interest in Hampton and a 100% ownership interest in North Hill). Details of this transaction are: Purchase consideration Consisting of: – Cash consideration 4,150,000 17,695,604 4,150,000 17,695,604 – Ordinary shares 45,792,752 82,497,920 45,792,752 82,497,920 Total consideration 49,942,752 100,193,524 49,942,752 100,193,524 Cash consideration 4,150,000 17,695,604 4,150,000 17,695,604 Cash outf ow1 4,150,000 15,605,472 4,150,000 15,605,472 Assets and liabilities held at acquisition date: Cash 2,090,132 2,090,132 Receivables – 2,474,601 – 2,474,601 Prepayments – 87,778 – 87,778 Investments – 4,605,297 – 4,605,297 Property, plant and equipment – 763,033 – 763,033 Exploration – 100,721,654 – 100,721,654 Payables – (1,157,936) – (1,157,936) Provisions – (51,116) – (51,116) – 109,533,443 – 109,533,443 Gain on consolidation – (600,062) – (600,062) Minority equity interests in acquisitions – (9,339,919) – (9,339,919) Acquisition reserve (41,506,662) – – – 8,436,090 99,593,462 – 99,593,462	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ c. Acquisition of Entities During the period ended 31 December 2010 the Company completed acquisition of 100% of Hampton ( 30 June 2010: a 69.4% ownership interest in Hampton and a 100% ownership interest in North Hill). Details of this transaction are: Purchase consideration Consisting of: – Cash consideration 4,150,000 17,695,604 4,150,000 17,695,604 – Ordinary shares 45,792,752 82,497,920 45,792,752 82,497,920 Total consideration 49,942,752 100,193,524 49,942,752 100,193,524 Cash consideration 4,150,000 17,695,604 4,150,000 17,695,604 Cash outf ow1 4,150,000 15,605,472 4,150,000 15,605,472 Assets and liabilities held at acquisition date: Cash 2,090,132 2,090,132 Receivables – 2,474,601 – 2,474,601 Prepayments – 87,778 – 87,778 Investments – 4,605,297 – 4,605,297 Property, plant and equipment – 763,033 – 763,033 Exploration – 100,721,654 – 100,721,654 Payables – (1,157,936) – (1,157,936) Provisions – (51,116) – (51,116) – 109,533,443 – 109,533,443 Gain on consolidation – (600,062) – (600,062) Minority equity interests in acquisitions – (9,339,919) – (9,339,919) Acquisition reserve (41,506,662) – – – 8,436,090 99,593,462 – 99,593,462
	49,942,752 100,193,524 49,942,752	100,193,524
	4,150,000 17,695,604 4,150,000	17,695,604
	4,150,000 15,605,472 4,150,000	15,605,472
	2,090,132 – 2,474,601 – – 87,778 – – 4,605,297 – – 763,033 – – 100,721,654 – – (1,157,936) – – (51,116) –	2,090,132 2,474,601 87,778 4,605,297 763,033 100,721,654 (1,157,936) (51,116)
	– 109,533,443 –	109,533,443
	– (600,062) – – (9,339,919) – (41,506,662) – –	(600,062) (9,339,919) –
	8,436,090 99,593,462 –	99,593,462

Note 1: The Company paid A$1,660,762 ( US$1,500,000) in July 2010 as fi nal settlement for the acquisition of North Hill.

d. Non-cash Financing and Investing Activities

Share issue

During the period ended 31 December 2010, 234,340,324 ordinary fully paid shares were issued at an average price of $0.20 per share as part of the consideration for the purchase of a further 29.7% ownership interest in Hampton.The share issue was based on the fair value of the two companies prior to the purchase.

64 METMINCO LIMITED Report for the six months ended 31 December 2010

NOTE 26: EVENTS SUBSEQUENT TO REPORTING DATE

Matters that have arisen in the interval between the end of the half year and the date of this report of a material or unusual nature likely, in the opinion of the Directors of the Company, to aff ect signifi cantly the operations of the Metminco Group, the results of those operations, or the state of aff airs of the Metminco Group, in future fi nancial years are as follows:

On 16 March 2010 John Fillmore resigned as a Director and Chairman of the Company after guiding Metminco from its Initial Public Off ering in 2007 to a market capitalisation of over $A500 million.

On 16 March 2010, Antonio Vicuna Ortuzar, a Chilean national and resident was appointed a Director and Chairman of the Company. Antonio,a lawyer by profession, is a highly respected fi gure in the global resources sector and has extensive experience and networks in the fi nancial markets in both North and South America as well as in London.

Other than the matters noted above, no other matters have arisen in the interval between the end of the half year and the date of this report of a material or unusual nature likely, in the opinion of the directors of the Company, to aff ect signifi cantly the operations of the Consolidated Group, the results of those operations, or the state of aff airs of the Consolidated Group, in future fi nancial years.

NOTE 27: RELATED PARTIES

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Directors

The names of each person holding the position of Director of Metminco Limited during the half year are:

John Fillmore, Phillip Wing, William J Howe, William S Etheridge, Tim Read and Francisco Vergara-Irarrazaval.

Details of Key Management Personnel remuneration are set out in Note 5.

Transactions with related parties:

a. Directors

Legal services fees totaling $25,376 were (12 months to 30 Jun 2011: $79,628) paid to JA Fillmore and Co. of which John Fillmore is principal.

Apart from the details disclosed in this Note, no Directors entered into a material contract with the Company or the Consolidated Group since the end of the previous fi nancial year and, there were no material contracts involving Directors’ interests existing at year end.

Directors’ and Executive Offi cer’s holdings of shares and options

The aggregate interests of Directors and the Executive Offi cers of the reporting entity and their Director-related entities in shares and share options of entities within the Consolidated Group at year end are set out in the Directors’ Report and at Note 5.

b. Associated companies

Advances by Minera Hampton Chile Limitada to Sociedad Contractual Minera Ovalle and Sociedad Contractual Minera San Lorenzo are in USD and are non interest bearing with no fi xed repayment terms. Total advances to the associated companies as at 31 December 2010 was nil (30 Jun 2010: nil). Refer Notes 12 and 13.

c. Subsidiaries

Advances by Metminico are in AUD and are non interest bearing with no fi xed repayment terms. Total advances to the subsidiary companies as at 31 December 2010 was $2,657,274 (12 months to 30 Jun 2011: nil).

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 28: FINANCIAL RISK MANAGEMENT

The Group’s fi nancial instruments consist mainly of deposits with banks, local money market instruments, trade and other receivables, trade and other payables and convertible notes.

The totals for each category of fi nancial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these fi nancial statements, are as follows:

CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 NOTE $ $ $ $ Financial Assets Cash and cash equivalents 8 23,189,432 2,159,428 21,572,370 1,189,206 Trade and other receivables 9 5,339,846 6,450,629 2,802,789 3,863,993 Fair value of equity swap derivative 9 2,113,535 (96,625) 2,113,535 (96,625) Total Financial Assets 30,642,813 8,513,432 26,488,694 4,956,574 Financial Liabilities Financial liabilities at amortised cost – Trade and other payables 17 2,021,494 3,350,183 1,249,815 2,756,220 – Borrowings 18 1,701,892 6,854,208 1,701,892 6,854,208 Total Financial Liabilities 3,723,386 10,204,391 2,951,707 9,610,428	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 NOTE $ $ $ $ Financial Assets Cash and cash equivalents 8 23,189,432 2,159,428 21,572,370 1,189,206 Trade and other receivables 9 5,339,846 6,450,629 2,802,789 3,863,993 Fair value of equity swap derivative 9 2,113,535 (96,625) 2,113,535 (96,625) Total Financial Assets 30,642,813 8,513,432 26,488,694 4,956,574 Financial Liabilities Financial liabilities at amortised cost – Trade and other payables 17 2,021,494 3,350,183 1,249,815 2,756,220 – Borrowings 18 1,701,892 6,854,208 1,701,892 6,854,208 Total Financial Liabilities 3,723,386 10,204,391 2,951,707 9,610,428	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 NOTE $ $ $ $ Financial Assets Cash and cash equivalents 8 23,189,432 2,159,428 21,572,370 1,189,206 Trade and other receivables 9 5,339,846 6,450,629 2,802,789 3,863,993 Fair value of equity swap derivative 9 2,113,535 (96,625) 2,113,535 (96,625) Total Financial Assets 30,642,813 8,513,432 26,488,694 4,956,574 Financial Liabilities Financial liabilities at amortised cost – Trade and other payables 17 2,021,494 3,350,183 1,249,815 2,756,220 – Borrowings 18 1,701,892 6,854,208 1,701,892 6,854,208 Total Financial Liabilities 3,723,386 10,204,391 2,951,707 9,610,428
	30,642,813 8,513,432 26,488,694	4,956,574
	2,021,494 3,350,183 1,249,815 1,701,892 6,854,208 1,701,892	2,756,220 6,854,208
	3,723,386 10,204,391 2,951,707	9,610,428

Financial Risk Management Policies

The Board of Directors is responsible for, amongst other issues, monitoring and managing fi nancial risk exposures of the Group. The Board monitors the Group’s fi nancial risk management policies and exposures and approves fi nancial transactions within the scope of its authority. It also reviews the eff ectiveness of internal controls relating to counterparty credit risk, currency risk, fi nancing risk and interest rate risk.

The Board’s overall risk management strategy seeks to assist the Consolidated Group in meeting its fi nancial targets, while minimising potential adverse eff ects on fi nancial performance. Its functions include the review of the credit risk policies and future cash fl ow requirements.

Specifi c Financial Risk Exposures and Management

The main risks the Group is exposed to through its fi nancial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk and foreign currency risk.

a. Credit risk

Exposure to credit risk relating to fi nancial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a fi nancial loss to the Group.

Credit risk is managed through the maintenance of procedures (such procedures include the regular monitoring of exposures and monitoring of the fi nancial stability of signifi cant customers and counterparties), ensuring to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment.

Risk is also minimised through investing surplus funds in fi nancial institutions that maintain a high credit rating, or in entities that the Board has otherwise cleared as being fi nancially sound.

Credit Risk Exposures

The maximum exposure to credit risk by class of recognised fi nancial assets at reporting date, excluding the value of any collateral or other security held, is equivalent to the carrying value and classifi cation of those fi nancial assets (net of any provisions) as presented in the statement of fi nancial position.

66 METMINCO LIMITED Report for the six months ended 31 December 2010

a. Credit risk continued

With the exception of the receivable from the equity swap which is secured (Note 9), the Group has no signifi cant concentration of credit risk with any single counterparty or group of counterparties. However, on a geographical basis, the Group has signifi cant credit risk exposures to South America and the United Kingdom given the substantial operations in those regions.

Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed in Note 9.

b. Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter diffi culty in settling its debts or otherwise meeting its obligations related to fi nancial liabilities. The Group manages this risk through the following mechanisms:

preparing forward looking cash fl ow analysis in relation to its operational, investing and fi nancing activities;
maintaining a reputable credit profi le;
managing credit risk related to fi nancial assets;
only investing surplus cash with major fi nancial institutions; and
comparing the maturity profi le of fi nancial liabilities with the realisation profi le of fi nancial assets.

The tables below refl ect an undiscounted contractual maturity analysis for fi nancial liabilities.

Cash fl ows realised from fi nancial assets refl ect management’s expectation as to the timing of realisation. Actual timing may therefore diff er from that disclosed. The timing of cash fl ows presented in the table to settle fi nancial liabilities refl ects the earliest contractual settlement dates.

Financial Liability and Financial Asset Maturity Analysis

WITHIN 1 YEAR 1 TO 5 YEARS OVER 5 YEARS TOTAL 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 $ $ $ $ $ $ $ $ Consolidated Group Financial liabilities due for payment Convertible notes – – 1,701,892 6,854,208 – – 1,701,892 6,854,208 Trade and other payables (excluding est. annual leave) 2,021,494 3,350,183 – – – – 2,021,494 3,350,183 Total contractual outf ows 2,021,494 3,350,183 1,701,892 6,854,208 – – 3,723,386 10,204,391 Total expected outf ows 2,021,494 3,350,183 1,701,892 6,854,208 – – 3,723,386 10,204,391 Financial assets – cash f ows realisable Cash and cash equivalents 23,189,432 2,159,428 – – – – 23,189,432 2,159,428 Trade and other receivables and derivatives 3,648,216 2,317,751 3,805,165 4,038,253 – – 7,453,381 6,356,044 Total anticipated inf ows 26,837,648 4,477,179 3,805,165 4,038,253 – – 30,642,813 8,515,472 Net (outf ow)/inf ow on f nancial instruments 24,816,154 1,126,996 2,103,273 (2,815,955) – – 26,919,427 (1,688,919)	WITHIN 1 YEAR 1 TO 5 YEARS OVER 5 YEARS TOTAL 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 $ $ $ $ $ $ $ $ Consolidated Group Financial liabilities due for payment Convertible notes – – 1,701,892 6,854,208 – – 1,701,892 6,854,208 Trade and other payables (excluding est. annual leave) 2,021,494 3,350,183 – – – – 2,021,494 3,350,183 Total contractual outf ows 2,021,494 3,350,183 1,701,892 6,854,208 – – 3,723,386 10,204,391 Total expected outf ows 2,021,494 3,350,183 1,701,892 6,854,208 – – 3,723,386 10,204,391 Financial assets – cash f ows realisable Cash and cash equivalents 23,189,432 2,159,428 – – – – 23,189,432 2,159,428 Trade and other receivables and derivatives 3,648,216 2,317,751 3,805,165 4,038,253 – – 7,453,381 6,356,044 Total anticipated inf ows 26,837,648 4,477,179 3,805,165 4,038,253 – – 30,642,813 8,515,472 Net (outf ow)/inf ow on f nancial instruments 24,816,154 1,126,996 2,103,273 (2,815,955) – – 26,919,427 (1,688,919)	WITHIN 1 YEAR 1 TO 5 YEARS OVER 5 YEARS TOTAL 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 $ $ $ $ $ $ $ $ Consolidated Group Financial liabilities due for payment Convertible notes – – 1,701,892 6,854,208 – – 1,701,892 6,854,208 Trade and other payables (excluding est. annual leave) 2,021,494 3,350,183 – – – – 2,021,494 3,350,183 Total contractual outf ows 2,021,494 3,350,183 1,701,892 6,854,208 – – 3,723,386 10,204,391 Total expected outf ows 2,021,494 3,350,183 1,701,892 6,854,208 – – 3,723,386 10,204,391 Financial assets – cash f ows realisable Cash and cash equivalents 23,189,432 2,159,428 – – – – 23,189,432 2,159,428 Trade and other receivables and derivatives 3,648,216 2,317,751 3,805,165 4,038,253 – – 7,453,381 6,356,044 Total anticipated inf ows 26,837,648 4,477,179 3,805,165 4,038,253 – – 30,642,813 8,515,472 Net (outf ow)/inf ow on f nancial instruments 24,816,154 1,126,996 2,103,273 (2,815,955) – – 26,919,427 (1,688,919)
	2,021,494 3,350,183 1,701,892 6,854,208 – – 3,723,386	10,204,391
	2,021,494 3,350,183 1,701,892 6,854,208 – – 3,723,386	10,204,391
	23,189,432 2,159,428 – – – – 23,189,432 3,648,216 2,317,751 3,805,165 4,038,253 – – 7,453,381	2,159,428 6,356,044
	26,837,648 4,477,179 3,805,165 4,038,253 – – 30,642,813	8,515,472
	24,816,154 1,126,996 2,103,273 (2,815,955) – – 26,919,427	(1,688,919)

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 28: FINANCIAL RISK MANAGEMENT continued

WITHIN 1 YEAR 1 TO 5 YEARS OVER 5 YEARS TOTAL 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 $ $ $ $ $ $ $ $ Company Financial liabilities due for payment Convertible notes – – 1,701,892 6,854,208 – – 1,701,892 6,854,208 Trade and other payables (excluding est. annual leave) 1,249,817 2,719,029 – – – – 1,249,817 2,709,029 Amounts payable to related parties – 37,191 – – – – – 37,191 Total contractual outf ows 1,249,817 2,756,220 1,701,892 6,854,208 – – 2,951,709 9,610,428 Total expected outf ows 1,249,817 2,756,220 1,701,892 6,854,208 – – 2,951,709 9,610,428 Financial assets – cash f ows realisable Cash and cash equivalents 21,572,370 1,189,206 – – – – 21,572,370 1,189,206 Trade and receivables and derivatives 3,499,885 1,999,915 1,416,439 1,767,453 – – 4,916,324 3,767,368 Total anticipated inf ows 25,072,255 3,189,121 1,416,439 1,767,453 – – 26,488,694 4,956,574 Net (outf ow)/inf ow on f nancial instruments 23,822,438 432,901 (285,453) (5,086,755) – – 23,536,985 (4,653,854)	WITHIN 1 YEAR 1 TO 5 YEARS OVER 5 YEARS TOTAL 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 $ $ $ $ $ $ $ $ Company Financial liabilities due for payment Convertible notes – – 1,701,892 6,854,208 – – 1,701,892 6,854,208 Trade and other payables (excluding est. annual leave) 1,249,817 2,719,029 – – – – 1,249,817 2,709,029 Amounts payable to related parties – 37,191 – – – – – 37,191 Total contractual outf ows 1,249,817 2,756,220 1,701,892 6,854,208 – – 2,951,709 9,610,428 Total expected outf ows 1,249,817 2,756,220 1,701,892 6,854,208 – – 2,951,709 9,610,428 Financial assets – cash f ows realisable Cash and cash equivalents 21,572,370 1,189,206 – – – – 21,572,370 1,189,206 Trade and receivables and derivatives 3,499,885 1,999,915 1,416,439 1,767,453 – – 4,916,324 3,767,368 Total anticipated inf ows 25,072,255 3,189,121 1,416,439 1,767,453 – – 26,488,694 4,956,574 Net (outf ow)/inf ow on f nancial instruments 23,822,438 432,901 (285,453) (5,086,755) – – 23,536,985 (4,653,854)	WITHIN 1 YEAR 1 TO 5 YEARS OVER 5 YEARS TOTAL 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 31 DEC 2010 30 JUN 2010 $ $ $ $ $ $ $ $ Company Financial liabilities due for payment Convertible notes – – 1,701,892 6,854,208 – – 1,701,892 6,854,208 Trade and other payables (excluding est. annual leave) 1,249,817 2,719,029 – – – – 1,249,817 2,709,029 Amounts payable to related parties – 37,191 – – – – – 37,191 Total contractual outf ows 1,249,817 2,756,220 1,701,892 6,854,208 – – 2,951,709 9,610,428 Total expected outf ows 1,249,817 2,756,220 1,701,892 6,854,208 – – 2,951,709 9,610,428 Financial assets – cash f ows realisable Cash and cash equivalents 21,572,370 1,189,206 – – – – 21,572,370 1,189,206 Trade and receivables and derivatives 3,499,885 1,999,915 1,416,439 1,767,453 – – 4,916,324 3,767,368 Total anticipated inf ows 25,072,255 3,189,121 1,416,439 1,767,453 – – 26,488,694 4,956,574 Net (outf ow)/inf ow on f nancial instruments 23,822,438 432,901 (285,453) (5,086,755) – – 23,536,985 (4,653,854)
	1,249,817 2,756,220 1,701,892 6,854,208 – – 2,951,709	9,610,428
	1,249,817 2,756,220 1,701,892 6,854,208 – – 2,951,709	9,610,428
	21,572,370 1,189,206 – – – – 21,572,370 3,499,885 1,999,915 1,416,439 1,767,453 – – 4,916,324	1,189,206 3,767,368
	25,072,255 3,189,121 1,416,439 1,767,453 – – 26,488,694	4,956,574
	23,822,438 432,901 (285,453) (5,086,755) – – 23,536,985	(4,653,854)

c. Market Risk

i. Interest rate risk

Exposure to interest rate risk arises on fi nancial assets and fi nancial liabilities recognised at the end of the reporting period whereby a future change in interest rates will aff ect future cash fl ows or the fair value of fi xed rate fi nancial instruments. The Group is also exposed to earnings volatility on fl oating rate instruments.

ii. Foreign exchange risk

Exposure to foreign exchange risk may result in the fair value or future cash fl ows of a fi nancial instrument fl uctuating due to movement in foreign exchange rates of currencies in which the Group holds fi nancial instruments which are other than the AUD functional currency of the Group.

iii. Equity price risk

The convertible notes issued by the Company provide the note holders with the right to require the Company to repay the loan by the issue of fully paid ordinary shares. The conversion price has a fi xed price element of $0.12 per share. The Group is exposed to equity price risk which may increase the value of its fi nancial liability if its share price is higher than $0.12 when the note holders can exercise their conversion right.

The Consolidated Group is exposed to interest rate and foreign exchange risk through cash assets held and fi nancial liabilities owed as at the reporting date.

68 METMINCO LIMITED Report for the six months ended 31 December 2010

CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ c. Market Riskcontinued Cash assets held in Australian dollars and subject to f oating interest rate 9,418,236 1,131,339 9,418,234 953,924 Cash assets held in Australian dollars and subject to a f xed interest rate – 8,196 – – Australian currency equivalent of cash assets held in US dollars and subject to f oating interest rate 12,867,164 1,019,893 11,250,104 235,282 Australian currency equivalent of cash assets held in UK pounds and subject to f oating interest rate 904,032 – 904,032 – Total cash assets 23,189,432 2,159,428 21,572,370 1,189,206 Financial liabilities repayble in US dollars Convertible notes 491,981 4,669,079 491,981 4,669,079	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ c. Market Riskcontinued Cash assets held in Australian dollars and subject to f oating interest rate 9,418,236 1,131,339 9,418,234 953,924 Cash assets held in Australian dollars and subject to a f xed interest rate – 8,196 – – Australian currency equivalent of cash assets held in US dollars and subject to f oating interest rate 12,867,164 1,019,893 11,250,104 235,282 Australian currency equivalent of cash assets held in UK pounds and subject to f oating interest rate 904,032 – 904,032 – Total cash assets 23,189,432 2,159,428 21,572,370 1,189,206 Financial liabilities repayble in US dollars Convertible notes 491,981 4,669,079 491,981 4,669,079	CONSOLIDATED COMPANY 31 DECEMBER 2010 30 JUNE 2010 31 DECEMBER 2010 30 JUNE 2010 $ $ $ $ c. Market Riskcontinued Cash assets held in Australian dollars and subject to f oating interest rate 9,418,236 1,131,339 9,418,234 953,924 Cash assets held in Australian dollars and subject to a f xed interest rate – 8,196 – – Australian currency equivalent of cash assets held in US dollars and subject to f oating interest rate 12,867,164 1,019,893 11,250,104 235,282 Australian currency equivalent of cash assets held in UK pounds and subject to f oating interest rate 904,032 – 904,032 – Total cash assets 23,189,432 2,159,428 21,572,370 1,189,206 Financial liabilities repayble in US dollars Convertible notes 491,981 4,669,079 491,981 4,669,079
	23,189,432 2,159,428 21,572,370 491,981 4,669,079 491,981	1,189,206 4,669,079

Sensitivity Analysis

The following table illustrates sensitivities to the Group’s exposures to changes in interest rates and exchange rates. The table indicates the impact on how profi t and equity values reported at reporting date would have been aff ected by changes in the relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is independent of other variables.

Interest Rate Sensitivity Analysis

At 31 December 2010, the eff ect on profi t and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:

constant would be as follows:
Change in prof t Increase in interest rate by 2% 188,365 43,189 188,365	23,784
Decrease in interest rate by 2% (188,365) (43,189) (188,365)	(23,784)
Change in equity Increase in interest rate by 2% 188,365 43,189 188,365	23,784
Decrease in interest rate by 2% (188,365) (43,189) (188,365)	(23,784)
Foreign Currency Risk Sensitivity Analysis
At 31 December 2010, the ef ect on prof t and equity as a result of changes in the value of the Australian dollar (AUD)	compared
to the US dollar (USD) and to the UK pound (GBP), with all other variables remaining constant would be as follows:
Change in prof t Improvement in AUD to USD by 5% (612,722) (48,566) (535,719)	(23,243)
Decline in AUD to USD by 5% 612,722 48,566 535,719	23,243
Change in equity Improvement in AUD to USD by 5% (612,722) (48,566) (535,719)	(23,243)
Decline in AUD to USD by 5% 612,722 48,566 535,719	23,243
Change in prof t Improvement in AUD to GBP by 5% (43,049) – (43,049)	–
Decline in AUD to GBP by 5% 43,049 – 43,049	–
Change in equity Improvement in AUD to GBP by 5% (43,049) – (43,049)	–
Decline in AUD to GBP by 5% 43,049 – 43,049	–

At 31 December 2010, the eff ect on profi t and equity as a result of changes in the value of the Australian dollar (AUD) compared to the US dollar (USD) and to the UK pound (GBP), with all other variables remaining constant would be as follows:

==> picture [40 x 842] intentionally omitted <==

NOTES TO THE FINANCIAL STATEMENTS continued

NOTE 28: FINANCIAL RISK MANAGEMENT continued

Net Fair Values

Fair value estimation

The fair values of fi nancial assets and fi nancial liabilities are presented in the following table and can be compared to their carrying values as presented in the statement of fi nancial position. Fair values are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions may have a material impact on the amounts estimated. Areas of judgment and the assumptions have been detailed below. Where possible, valuation information used to calculate fair value is extracted from the market, with more reliable information available from markets that are actively traded. In this regard, fair values for listed securities are obtained from quoted market bid prices. Where securities are unlisted and no market quotes are available, fair value is obtained using discounted cash fl ow analysis and other valuation techniques commonly used by market participants.

Diff erences between fair values and carrying values of fi nancial instruments with fi xed interest rates are due to the change in discount rates being applied by the market since their initial recognition by the Group. Most of these instruments which are carried at amortised cost (i.e. term receivables, held-to-maturity assets, loan liabilities) are to be held until maturity and therefore the net fair value fi gures calculated bear little relevance to the Group.

31 DECEMBER 2010 30 JUNE 2010 FOOTNOTE NET CARRYING VALUE NET FAIR VALUE NET CARRYING VALUE NET FAIR VALUE $ $ $ $ Consolidated Group Financial assets Cash and cash equivalents (i) 23,189,432 23,189,432 2,159,428 2,159,428 Loans and receivables (i) 5,339,846 5,339,846 6,450,629 6,450,629 Financial assets at fair value (ii) 2,113,535 2,113,535 (96,625) (96,625) Total f nancial assets 30,642,813 30,642,813 8,513,432 8,513,432 Financial liabilities Financial liabilities at amortised cost (i) 2,021,494 2,021,494 3,350,183 3,350,183 Financial liabilities at fair value (iii) 1,701,892 1,701,892 6,854,208 6,854,208 Total f nancial liabilities 3,723,386 3,723,386 10,204,391 10,204,391 Parent Entity Financial assets Cash and cash equivalents (i) 21,572,370 21,572,370 1,189,206 1,189,206 Loans and receivables (i) 2,802,789 2,802,789 3,863,993 3,863,993 Financial assets at fair value (ii) 2,113,535 2,113,535 (96,625) (96,625) Investments 155,085,360 155,085,360 100,561,933 100,561,933 Total f nancial assets 181,574,054 181,574,054 105,518,507 105,518,507 Financial liabilities Financial liabilities at amortised cost (i) 1,249,815 1,249,815 2,576,220 2,576,220 Financial liabilities at fair value (iii) 1,701,892 1,701,892 6,854,208 6,854,208 Total f nancial liabilities 2,951,707 2,951,707 9,430,428 9,430,428	31 DECEMBER 2010 30 JUNE 2010 FOOTNOTE NET CARRYING VALUE NET FAIR VALUE NET CARRYING VALUE NET FAIR VALUE $ $ $ $ Consolidated Group Financial assets Cash and cash equivalents (i) 23,189,432 23,189,432 2,159,428 2,159,428 Loans and receivables (i) 5,339,846 5,339,846 6,450,629 6,450,629 Financial assets at fair value (ii) 2,113,535 2,113,535 (96,625) (96,625) Total f nancial assets 30,642,813 30,642,813 8,513,432 8,513,432 Financial liabilities Financial liabilities at amortised cost (i) 2,021,494 2,021,494 3,350,183 3,350,183 Financial liabilities at fair value (iii) 1,701,892 1,701,892 6,854,208 6,854,208 Total f nancial liabilities 3,723,386 3,723,386 10,204,391 10,204,391 Parent Entity Financial assets Cash and cash equivalents (i) 21,572,370 21,572,370 1,189,206 1,189,206 Loans and receivables (i) 2,802,789 2,802,789 3,863,993 3,863,993 Financial assets at fair value (ii) 2,113,535 2,113,535 (96,625) (96,625) Investments 155,085,360 155,085,360 100,561,933 100,561,933 Total f nancial assets 181,574,054 181,574,054 105,518,507 105,518,507 Financial liabilities Financial liabilities at amortised cost (i) 1,249,815 1,249,815 2,576,220 2,576,220 Financial liabilities at fair value (iii) 1,701,892 1,701,892 6,854,208 6,854,208 Total f nancial liabilities 2,951,707 2,951,707 9,430,428 9,430,428	31 DECEMBER 2010 30 JUNE 2010 FOOTNOTE NET CARRYING VALUE NET FAIR VALUE NET CARRYING VALUE NET FAIR VALUE $ $ $ $ Consolidated Group Financial assets Cash and cash equivalents (i) 23,189,432 23,189,432 2,159,428 2,159,428 Loans and receivables (i) 5,339,846 5,339,846 6,450,629 6,450,629 Financial assets at fair value (ii) 2,113,535 2,113,535 (96,625) (96,625) Total f nancial assets 30,642,813 30,642,813 8,513,432 8,513,432 Financial liabilities Financial liabilities at amortised cost (i) 2,021,494 2,021,494 3,350,183 3,350,183 Financial liabilities at fair value (iii) 1,701,892 1,701,892 6,854,208 6,854,208 Total f nancial liabilities 3,723,386 3,723,386 10,204,391 10,204,391 Parent Entity Financial assets Cash and cash equivalents (i) 21,572,370 21,572,370 1,189,206 1,189,206 Loans and receivables (i) 2,802,789 2,802,789 3,863,993 3,863,993 Financial assets at fair value (ii) 2,113,535 2,113,535 (96,625) (96,625) Investments 155,085,360 155,085,360 100,561,933 100,561,933 Total f nancial assets 181,574,054 181,574,054 105,518,507 105,518,507 Financial liabilities Financial liabilities at amortised cost (i) 1,249,815 1,249,815 2,576,220 2,576,220 Financial liabilities at fair value (iii) 1,701,892 1,701,892 6,854,208 6,854,208 Total f nancial liabilities 2,951,707 2,951,707 9,430,428 9,430,428
	30,642,813 30,642,813 8,513,432	8,513,432
	2,021,494 2,021,494 3,350,183 1,701,892 1,701,892 6,854,208	3,350,183 6,854,208
	3,723,386 3,723,386 10,204,391	10,204,391
	21,572,370 21,572,370 1,189,206 2,802,789 2,802,789 3,863,993 2,113,535 2,113,535 (96,625) 155,085,360 155,085,360 100,561,933	1,189,206 3,863,993 (96,625) 100,561,933
	181,574,054 181,574,054 105,518,507	105,518,507
	1,249,815 1,249,815 2,576,220 1,701,892 1,701,892 6,854,208	2,576,220 6,854,208
	2,951,707 2,951,707 9,430,428	9,430,428

The fair values disclosed in the above table have been determined based on the following methodologies:

(i) Cash and cash equivalents, trade and other receivables and trade and other payables are short-term instruments in nature whose carrying value is equivalent to fair value. Trade and other payables exclude amounts provided for annual leave, which is not considered a fi nancial instrument.

(ii) The fair value of term receivables generally approximates carrying value, with movements recognised through profi t and loss.

(iii) The convertible notes are valued at face value plus an adjustment to refl ect the value of the option to convert to fully paid ordinary shares using the Company’s prevailing price quoted on the ASX, with movements recognised through profi t and loss.

70 METMINCO LIMITED Report for the six months ended 31 December 2010

d. Financial Instruments Measured at Fair Value

The fi nancial instruments recognised at fair value in the statement of fi nancial position have been analysed and classifi ed using a fair value hierarchy refl ecting the signifi cance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels:

quoted prices in active markets for identical assets or liabilities (Level 1);
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).

The Company only has level 2 categories and the basis for valuation is set out in the notes to the accounts.

NOTE 29: RESERVES

a. Foreign Currency Translation Reserve

The foreign currency translation reserve records exchange diff erences arising on translation of a foreign controlled subsidiary.

b. Option Reserve

The option reserve records items recognised as expenses on valuation of employee share options.

c. Acquisition Reserve

The acquistion reserve records items recognised in the reserve of acquisition of the Hampton minority interest. Refer Notes 14b and 25c.

NOTE 30: COMPANY DETAILS

Metminco Limited is a company domiciled in Australia and its registered offi ce is located at:

Level 6

122 Walker Street North Sydney NSW 2060 Australia

The Company’s principal offi ce is located at:

Isidora Goyenechea 3162 Ofi cina 201 Las Condes Chile.

The Group’s principal activities are exploration and development of mineral prospects primarily located in Chile and Peru, South America.

==> picture [40 x 842] intentionally omitted <==

DIRECTORS’ DECLARATION

The directors of the company declare that:

the fi nancial statements and notes, as set out on pages 29 to 71, are in accordance with the Corporations Act 2001 and:
a. comply with Accounting Standards;
b. give a true and fair view of the fi nancial position as at 31 December 2010 and of the performance for the period ended on that date of the Company and Consolidated Group; and
c. comply with International Financial Reporting Standards as discussed in Note 1.
the Executive Offi cer and Chief Finance Offi cer have each declared that:
a. the fi nancial records of the Company for the period have been properly maintained in accordance with s286 of the Corporations Act 2001;
b. the fi nancial statements and notes for the period comply with the Accounting Standards; and
c. the fi nancial statements and notes for the period give a true and fair view;
in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

==> picture [107 x 67] intentionally omitted <==

William J Howe

Director

Dated this 31st day of March 2011

72 METMINCO LIMITED Report for the six months ended 31 December 2010

INDEPENDENT AUDITOR’S REPORT to the Members of Metminco Limited

==> picture [132 x 25] intentionally omitted <==

Grant Thornton Audit Pty Ltd ACN 130 913 594

Level 17, 383 Kent Street Sydney NSW 2000 PO Locked Bag Q800 QVB Post Offi ce Sydney NSW 1230

T +61 2 8297 2400 F +61 2 9299 4445 E [email protected] W www.grantthornton.com.au

Report on the fi nancial report

We have audited the accompanying fi nancial report of Metminco Limited (the “Company”), which comprises the statement of fi nancial position as at 31 December 2010, and the statement of comprehensive income, statement of changes in equity and statement of cash fl ows for the period ended on that date, a summary of signifi cant accounting policies, other explanatory notes to the fi nancial report and the directors’ declaration of the company the consolidated entity comprising the Company and the entities it controlled at the period end or from time to time during the fi nancial period.

Directors’ responsibility for the fi nancial report

Th e Directors of the Company are responsible for the preparation and fair presentation of the fi nancial report in accordance with Australian Accounting Standards and the Corporations Act 2001. Th is responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the fi nancial report that are free from material misstatement, whether due to fraud or error. Th e Directors also state, in the notes to the fi nancial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the fi nancial report, comprising the fi nancial statements and notes, complies with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the fi nancial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards which require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the fi nancial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial report. Th e procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the fi nancial report, whether due to fraud or error.

Liability limited by a scheme approved under Professional Standards Legislation

==> picture [40 x 842] intentionally omitted <==

==> picture [132 x 25] intentionally omitted <==

In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the fi nancial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the eff ectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the fi nancial report.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s opinion

In our opinion:

a the fi nancial report of Metminco Limited is in accordance with the Corporations Act 2001, including:
i giving a true and fair view of the Company’s and consolidated entity’s fi nancial position as at 31 December 2010 and of their performance for the period ended on that date; and
ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b the fi nancial report also complies with International Financial Reporting Standards as disclosed in the notes to the

Report on the remuneration report

We have audited the remuneration report included in pages 23 to 26 of the directors’ report for the period ended 31 December 2010. Th e Directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion on the remuneration report

In our opinion, the remuneration report of Metminco Limited for the period ended 31 December 2010, complies with section 300A of the Corporations Act 2001.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

A G Rigele Director – Audit & Assurance

Sydney, 31 March 2011

74 METMINCO LIMITED Report for the six months ended 31 December 2010

SHAREHOLDER INFORMATION

1. Shareholding

a. Distribution of shareholders

ribution of shareholders	ribution of shareholders
Category Ordinary SIZE OF HOLDING NUMBER 1 – 1,000 91 1,001 – 5,000 1,359 5,001 – 10,000 1,259 10,001 – 100,000 3,239 100,001 – and over 491
6,439

b. The number of shareholdings held in less than marketable parcels is 117.

c. The names of the substantial shareholders listed in the holding company’s register as at 11 April 2011 are:

Category	Ordinary
SHAREHOLDER	NUMBER
Takoradi Limited	160,000,000
HSB Custody Nominees	159,505,504
Highland Holding Resources Inc.	135,000,000

d. Voting Rights

The voting rights attached to each class of equity security are as follows:

Ordinary shares

Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.

e. 20 largest shareholders – Ordinary shares

NAME
NUMBER OF ORDINARY FULLY
PAID SHARES HELD
1
Takoradi Limited
160,000,000
2
HSBC Custody Nominees
159,505,504
3.
Highland Holdings Resources Inc
135,000,000
4.
Mining Investment Services (ATF WSE Superannuation Fund)
49,600,000
5.
Computershare Clearing Pty Ltd
45,767,833
6.
Tangarry Pty Ltd
34,966,664
7.
NJ Howe & WJ Howe (ATF Howe Superannuation Fund)
30,800,000
8
UBS Nominees Pty Ltd
28,506,164
9
National Nominees Limited
27,744,548
10
Sentient Executive GP II
26,167,524
11
Sidlog Limited
23,312,137
12
Wilnic Pty Ltd
17,464,168
13.
RBC Dexia Investor Services
17,358,651
14
J P Morgan Nominees Australia
14,804,499
15
Mr Maxwell James Green
14,600,000
16
Mining Investment Services
12,800,000
17
Notesan Pty Ltd
11,434,076
18
Mr M. James Green & RL Green (ATF Green Superannuation Fund)
10,400,000
19
Chile Copper Mine Pty Ltd
10,266,668
20.
HSBC Custody Nominees
8,263,032

% HELD OF ISSUED
ORDINARY CAPITAL
12.99
12.95
10.96
4.03
3.72
2.84
2.50
2.32
2.25
2.13
1.89
1.42
1.41
1.20
1.19
1.04
0.93
0.84
0.83
0.67

838,761,468

68.11

Percentage holding of twenty largest shareholders is 68.11%

Total ordinary fully paid shares on issue: 1,231,269,510 shares

==> picture [40 x 842] intentionally omitted <==

f. 20 largest optionholders – Options expiring 4 December 2012 (exercise price 25 cents)

NAME
NUMBER OF ORDINARY FULLY
PAID SHARES HELD
1
HSBC Custody Nominees
1,263,500
2
Surpion Pty Ltd
1,100,000
3
Mr John Daniel Powell
1,100,000
4
Kelmist Pty Ltd
1,099,999
5
Victoria House Investments Pty
1,000,000
6
Walker Seafoods Australia Pty Ltd
1,000,000
7
Mr John Charles Thomas Lee
890,000
8
Mr Leslie Robert Knight (Knight Super Fund A/C)
845,000
9.
Mr John Charles Thomas Lee (The John Lee Super Fun A/C)
779,000
10.
Notemarl Pty Ltd
650,000
11.
Seven 95 Pty Ltd
617,250
12.
Dobco Superannuation Pty Ltd
600,000
13
Citicorp Nominees Pty Ltd
522,500
14
Pethol (Vic) Pty Lty
500,000
15
Sage Administration Pty Ltd
500,000
16
Rylet Pty Ltd
436,244
17
Mr John Richard Hassell (The Hassell S/F A/C)
430,000
18
Mr Angus James Tamsett
409,366
19
Aliana Pty Ltd
385,000
20
Ms Sonia Popovic
350,000

% HELD OF ISSUED
ORDINARY CAPITAL
4.64
4.04
4.04
4.04
3.67
3.67
3.27
3.10
2.86
2.39
2.27
2.20
1.92
1.84
1.84
1.60
1.58
1.50
1.41
1.29

14,477,859

53.17

Percentage holding of twenty largest optionholders is 53.17%

Total options expiring 4 December 2012 on issue: 27,217,517 options

g. As at 11 April 2011 the Company had on issue:

4,500,000 unlisted options exercisable at 30 cents on or before 31 July 2012 to Chalmsbury Nominees Pty Ltd (Black A/C)
14,250,000 unlisted options (6,000,000 Director Options and 8,250,000 Employee Options) exercisable at 44 cents on or before 6 December 2013
14,250,000 unlisted options (6,000,000 Director Options and 8,250,000 Employee Options) exercisable at 52.5 cents on or before 6 December 2013
2,000,000 unlisted options in lieu of cash payment for services exercisable at 44 cents on or before 6 December 2013
2,000,000 unlisted options in lieu of cash payment for services exercisable at 52.5 cents on or before 6 December 2013.

2. The name of the company secretary is Mr Philip Killen.

3. The registered offi ce and principal place of business in Australia is:

Level 6

122 Walker Street

North Sydney NSW 2060 Australia Telephone +61 2 9460 1856, Fax +61 2 9460 1857

4. Registers of securities are held at the following address:

Security Transfer Registrars Pty Limited

770 Canning Highway, Applecross WA 6153

5. Stock Exchange Listing

Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Stock Exchange Limited and AIM Market of the London Stock Exchange.

6. Unquoted Securities

Options over Unissued Shares

A total of 64,217,517 options are on issue. 51,630,713 options are held by 406 holders of ordinary securities. 13,099,999 options are on issue to one director and one former director.

76 METMINCO LIMITED Report for the six months ended 31 December 2010

CORPORATE DIRECTORY

Directors

Antonio Vicuña Ortuzar (Chairman) William James Howe (Managing Director) Timothy Philip Read (Non Executive Director) Francisco Vergara-Irarrazaval (Non Executive Director) Phillip John Wing (Executive Director) William Stirling Etheridge (Director)

Company Secretary

Philip Walter Killen

Registered Offi ce

Level 6, 122 Walker Street North Sydney NSW 2060 Australia

Principal Place of Business

SYDNEY, AUSTRALIA

Level 6, 122 Walker Street North Sydney NSW 2060 Australia Ph: +61 (2) 9460 1856 Fax: +61 (2) 9460 1857

SANTIAGO, CHILE

Avda. Isidora Goyenechea No 3, 162 Offi cina 201 Comuna de Las Condes Santiago, Chile Ph: +56 (2) 411 2600 Fax: +56 (2) 411 2610

Website

www.metminco.com.au

ASX and AIM code

MNC

Share Registry

Australia Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 Australia

Depositary

Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ UK

Auditor

Grant Thornton Corporate Finance Pty Limited Level 17 383 Kent Street Sydney NSW 2000 Australia

Solicitors

Gadens Lawyers Skygarden Building 77 Castlereagh Street Sydney NSW 2000 Australia

==> picture [40 x 842] intentionally omitted <==

Metminco Limited ABN 43 119 759 349

www.metminco.com.au

AI assistant

LCL RESOURCES LIMITED — AGM Information 2011

65217_rns_2011-04-27_8ca1031e-744c-479a-8444-099194748c53.pdf

ASX ANNOUNCEMENT

Notice of Annual General Meeting

28 April 2011

About Metminco:

South America :

Australia:

United Kingdom:

MetMinco LiMited

notice oF AnnUAL GeneRAL MeetinG And

eXPLAnAtoRY MeMoRAndUM

THIS DOCUMENT IS IMPORTANT

notice oF AnnUAL GeneRAL MeetinG for the period ended 31 december 2010

Table of contents

AGendA

ORDINARY BUSINESS

1 Discussion of Financial Statements and reports

2 resolutions

AGendA continued

VOTINg ExClUSION

APPOINTMENT Of PROxIES

Questions

eXPLAnAtoRY MeMoRAndUM

IMPORTANT NOTICE

fORWARD lOOKINg STATEMENTS

Resolution 1 – Adoption of Remuneration Report

Resolution 2 – Re-election of Antonio Ortuzar

eXPLAnAtoRY MeMoRAndUM continued

Resolution 3 – Ratification of prior share issues

Background

Transaction

Resolution 4 – Ratification of prior share issues

Background

Transaction

Mollacas

Vallecillo

eXPLAnAtoRY MeMoRAndUM continued

Loica Project

Resolution 5 – Ratification of prior share issues

Resolution 6 – Approval for the issue of 60,000,000 Shares to selected sophisticated and institutional investors to raise A$22.8 million

Advantages of supporting resolution 6

4. In line with Metminco’s strategic direction

eXPLAnAtoRY MeMoRAndUM continued

Disadvantages of Supporting the resolutions

glOSSARY

eXPLAnAtoRY MeMoRAndUM continued

PROXY FORM

METMINCO LIMITED

REGISTERED OFFICE:

SECTION A: Appointment of Proxy

OR

SECTION B: Voting Directions to your Proxy

Resolution

For Against Abstain*

If no directions are given my proxy may vote as the proxy thinks fit or may abstain.

If you wish to appoint the Chairperson as your proxy and you do not wish to direct the Chairperson how to vote, please mark "X" in the box.

SECTION C: Please Sign Below

( )

NOTES

1. Name and Address

2. Appointment of a Proxy

3. Directing your Proxy how to vote

4. Appointment of a Second Proxy

5. Signing Instructions Individual: where the holding is in one name, the Shareholder must sign.

6. Lodgement of Proxy

Security Transfer Registrars Pty Ltd PO BOX 535 Applecross, Western Australia 6953

PRIVACY STATEMENT

CHAIRMAN’S LETTER

CORPORATE GOVERNANCE STATEMENT

Board Composition

Ethical Standards

Trading Policy

Occupational Health and Safety Policy

Diversity Policy Statement

Audit Committee

Performance Evaluation

Board Roles and Responsibilities

Shareholder Rights

LCL RESOURCES LIMITED AGM Information 2011