METALS AUSTRALIA LTD — AGM Information 2010

Oct 27, 2010

Metals Australia Ltd ABN 38 008 982 474

Notice of Annual General Meeting

Explanatory Statement

and

Proxy Form

9:00 am (WST) on Tuesday 30 November 2010 Celtic Club, 48 Ord Street, West Perth, Western Australia

METALS AUSTRALIA LTD

ABN 38 008 982 474

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of members of METALS AUSTRALIA LTD ( MLS or the Company ) will be held on Tuesday 30 November 2010 commencing at 9:00 am (Australian Western Standard Time) at the Celtic Club, 48 Ord Street, West Perth, Western Australia.

The Explanatory Statement that accompanies and forms part of this Notice of Annual General Meeting describes in more detail the matters to be considered. Terms used in this Notice of Annual General Meeting have the meaning given to them in the "Definitions" section contained in the Explanatory Statement.

AGENDA

BUSINESS OF THE MEETING

A. Accounts and reports

To receive and consider the Financial Statements and the reports of the Directors and the Auditors for the year ended 30 June 2010.

B . Resolution 1 – Non Binding Resolution to adopt Remuneration Report

To consider and, if thought fit, pass the following as an ordinary resolution:

" That the Remuneration Report as set out in the Company’s Annual Report for the year ended 30 June 2010 be adopted."

Note: The vote on this resolution is advisory only and does not bind the Directors of the Company.

This is an opportunity for shareholders to comment and ask questions about the remuneration report detailed on pages 8 and 9 of the Annual Report. The vote on the proposed resolution is advisory only, and will not bind the Directors or the Company however the Board will take the outcome of the votes into consideration, when reviewing future practices of the Company.

C. Resolution 2 - Re-election of a Director

To consider, and if thought fit, to pass the following as an ordinary resolution:

"That Mr H S Majteles, who retires by rotation in accordance with the Company’s Constitution, be re-elected a Director of the Company."

D. Resolution 3 - Approval for a proposed Share and Option issue

To consider, and if thought fit, to pass the following ordinary resolution:

“That for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to allot and issue up to 200,000,000 Shares at an issue price of not less than 0.8 cents each together with one free attaching Option for every Share allotted. Each Option shall be exercisable at 2.0 cents on or before 30 September 2013 on the terms and conditions set out in the Explanatory Statement accompanying this Notice of General Meeting”

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Metals Australia Ltd

VOTING EXCLUSION

The Company will disregard any votes cast on Resolution 3 by a person who may participate in the proposed issue and any associate of those persons or any person who might obtain a benefit except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed. Also associates of persons who may obtain a benefit except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed, will also be excluded. 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 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.

Voting Entitlements

For the purposes of determining voting entitlements at the General Meeting, Shares will be taken to be held by persons who are registered as holding Shares at 9.00am on 28 November 2010. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the general meeting.

Proxy and Voting Entitlement Instructions are included on the Proxy Form accompanying this Notice of General Meeting.

By order of the Board Norman Grafton Company Secretary 21 October 2010

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Metals Australia Ltd

EXPLANATORY STATEMENT

INTRODUCTION

This Explanatory Statement has been prepared for the information of members of METALS AUSTRALIA LTD in connection with the business to be conducted at the Annual General Meeting of members to be held at the Celtic Club, 48 Ord Street, West Perth, Western Australia, on 30 November 2010 at 9:00 am (Australian Western Standard Time).

This Explanatory Statement forms part of and should be read in conjunction with the accompanying Notice of Annual General Meeting.

Shareholders should note that all the Directors approved the proposal to put the resolutions to shareholders as outlined in the Notice of General Meeting and to prepare this Explanatory Statement.

A. FINANCIAL REPORTS

Shareholders will be given an opportunity to ask questions in relation to the accounts of the Company at the Annual General Meeting.

B. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

In accordance with section 250R(2) of the Corporations Act the Company is required to present to its shareholders the Remuneration Report as disclosed in the Company's Annual Report 2010. The vote on the resolution is advisory only and does not bind the Directors of the Company. The Remuneration Report is set out in the Company’s Annual Report 2010 and is also available on the Company’s website (www.metalsaustralia.com.au).

The Remuneration Report explains the Board’s policies in relation to the nature and level of remuneration paid to Directors of MLS, sets out remuneration details for each Director and any service agreements and sets out the details of any share based compensation.

C. RESOLUTION 2 – RE-ELECTION OF A DIRECTOR

Pursuant the Company's Constitution, Mr H S Majteles, being a Director of the Company, retires by way of rotation and, being eligible, offers himself for re-election as a Director of the Company.

Mr Majteles is a commercial lawyer and has been in private practice in Western Australia since 1972. He has been a board member of a number of publicly listed companies involved in the mining, resources, energy and biotech sectors for over twenty five years. Mr Majteles is also a Director of Blaze International Ltd, Prime Minerals Ltd and Power Resources Ltd. During the past three years, he was also a Director of Equatorial Resources (formerly Eqitx) Limited until 5 November 2009.

D. RESOLUTION 3 – APPROVAL FOR A PROPOSED SHARE AND OPTION ISSUE

At a General Meeting held on 3 September 2010, shareholders approved the issue of 150,000,000 shares at not less than 0.8 cents each, together with one free attaching option for every share allotted, with each option being exercisable at 2.0 cents on or before 30 September 2013. To date, only 13,665,000 shares and options have been issued pursuant to this resolution. This approval expires on 2 December 2010.

In view of the expiry of the existing approval on 2 December, being only two days from the date of the Annual General Meeting of the Company on 30 November, it is proposed that Shareholder approval be sought for a new issue of shares and options to, in effect, replace and expand the current approval that is due to expire.

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Metals Australia Ltd

Subject to shareholder approval, pursuant to Listing Rule 7.1, the Company now proposes to issue up to 200,000,000 shares with one free attaching option per share, exercisable at 2 cents on or before 30 September 2013.

Listing Rule 7.1 broadly provides, subject to certain exceptions, that shareholder approval is required for any issue of securities where the securities proposed to be issued represent more than 15% of the Company’s shares then on issue.

For the purposes of Listing Rule 7.3, the following information is provided to shareholders:

• a) the maximum number of Shares which may be issued pursuant to this resolution is 200,000,000;

• b) the maximum number of Options which may be granted pursuant to this resolution is 200,000,000;

• c) the Shares and Options will be issued and allotted no later than 3 months after the date of this meeting or such later date as approved by ASX by waiver to the Listing Rules;

• d) the Shares are to be issued at not less than 0.8 cents each. The Options are to be free of charge.

• e) the allottees will be at the direction of the Directors but will not be related parties of the Company;

• f) the terms of the Shares will be the same as the existing ordinary fully paid Shares in the Company and the options being and granted will be on the terms and conditions as outlined in the attached Annexure “A” of the Notice of Meeting,

• g) the purpose of the issue is for additional working capital and acquisition of assets;

The Board of Directors unanimously recommends Shareholders vote in favour of the resolution.

DEFINITIONS

ASX means ASX Limited (formerly Australian Stock Exchange Limited and now operating under the name, Australian Securities Exchange). Board means the Board of Directors. Company means Metals Australia Ltd ABN 38 008 982 474. Corporations Act means Corporations Act 2001 (Cth). Director means a director of the Company. Listing Rules means the official listing rules of ASX. Notice means the Notice of Annual General Meeting accompanying this Explanatory Statement. Option means an option to acquire a Share on the terms and conditions as outlined in Annexure "A". Share means a fully paid ordinary share in the capital of the Company and Shares has a corresponding meaning.

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Metals Australia Ltd

ANNEXURE "A"

Terms and Conditions of Options

The terms and conditions of the Options are as follows:

• a) Each Option shall entitle the Option holder, when exercised, to one fully paid ordinary share in the Company (“Share”).

• b) The Options are exercisable wholly or in part at any time prior to 5.00 pm (WST) on 30 September 2013 (“Expiry Date”). The Options not exercised by that date shall lapse.

• c) Each Option may be exercised by notice in writing to the Company, together with the payment for the number of shares in respect of which the Options are exercised, at any time before the Expiry Date. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

• d) The Option exercise price is $0.02 per Option.

• e) An Option does not confer the right to a change in exercise price or a change in the number of the underlying Shares over which the Option can be exercised.

• f) Shares issued upon exercise of the Options will be issued following receipt of all the relevant documents and payments and will rank equally in all respects with the then issued Shares.

• g) The Options are not to be quoted on ASX and the Company is under no obligation to apply for quotation of the Options on ASX. The Company may apply for quotation on ASX of the Options.

• h) The Company will apply for quotation on ASX of all Shares issued upon exercise of the Options.

• i) Subject to the Corporations Act, the Constitution and the Listing Rules, the Options are freely transferable.

• j) There are no participating rights or entitlements inherent in the Options and Option holders will not be entitled to participate in new issues of securities offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 5 Business Days after the issue is announced so as to give Option holders the opportunity to exercise their Options before the date for determining entitlements to participate in any issue.

• k) If at any time the issued capital of the Company is reorganised, the rights of an Option holder are to be changed to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation.

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Metals Australia Ltd

METALS AUSTRALIA LTD ABN 38 008 982 474

PROXY FORM

The Secretary Metals Australia Ltd 1[st] Floor, 8 Parliament Place West Perth WA 6005

Facsimile: (08) 9481 7835

I/We………………………………………………………………………………………………………

of…………………………………………………………………………………………………………

being a member(s) of METALS AUSTRALIA LTD, hereby appoint as my/our proxy

the Chairman OR Of the Meeting

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman 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 on Tuesday, 30 November 2010 at 9:00am (WST) and at any adjournment thereof. If two proxies are appointed, the proportion or number of votes this proxy is authorised to exercise is [ ]% of the Shareholder’s votes [ ] of the Shareholder’s votes. (An additional Proxy Form will be supplied by the Company, on request

The Chairman intends to vote all undirected proxies in favour of each resolution.

INSTRUCTIONS AS TO VOTING ON THE RESOLUTIONS

If the Chairman of the Meeting is your proxy and you have not directed him how to vote please mark the box in this section.

By marking this box you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as 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 Chairman will not cast your votes on the resolutions and your votes will not be counted in computing the required majority if a poll is called on any resolution.

OR

Should you wish to direct your proxy how to vote, please tick the appropriate boxes below.

RESOLUTIONS

FOR AGAINST ABSTAIN

1. Non Binding resolution to adopt Remuneration Report 2. Re-election of Director

3. Approval for a proposed share & option issue

If the member is an individual or joint holder:

……………………..…… …………………………. Usual Signature Usual Signature

Dated this .…………….… day of ……………………….2010

If the member is a Company:

Signed in accordance with the Constitution of the company in the presence of:

........................................ ........................... Director/Sole Director/Secretary Director/Secretary

Dated this.…………….… day of ………………………. 2010

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Metals Australia Ltd

METALS AUSTRALIA LTD ABN 38 008 982 474

NOTES

1. A member entitled to attend and vote is entitled to appoint a proxy. A member that is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise.

2. Where more than one proxy is appointed and that appointment does not specify the proportion or number of the member’s votes, each proxy may exercise half of the votes.

3. A proxy need not be a member of the Company.

4. A proxy is not entitled to vote unless the instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed is either deposited at the registered office of the Company (1[st] Floor, 8 Parliament Place, West Perth, Western Australia, 6872) or sent by facsimile to that office on Fax: 08 94817835 to be received not less than 48 hours prior to the time of the meeting.

5. If the member is a company it must execute under its Common Seal or otherwise in accordance with its Constitution and s.127 of the Corporations Act.

6. The Chairman intends to vote all undirected proxies in favour of the resolutions.

7. If the proxy form specifies a way in which the proxy is to vote on any of the resolutions stated above, then the following applies:

8. (a) the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way; and

9. (b) if the proxy has 2 or more appointments that specify different ways to vote on the resolutions, the proxy must not vote on a show of hands; and

10. (c) if the proxy is Chairman, the proxy must vote on a poll and must vote that way, and

11. (d) if the proxy is not the Chairman, the proxy need not vote on a poll, but if the proxy does so, the proxy must vote that way.

If a proxy is also a shareholder, the proxy can cast any votes the proxy holds as a shareholder in anyway that the proxy sees fit.

Attendance and Voting Eligibility

For the purposes of the meeting, securities will be taken to be held by the persons who are registered holders at 9:00 am on Sunday, 28 November 2010. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the meeting.

Proxies

A member of the Company entitled to attend and vote at the meeting shall be entitled to appoint not more than two other persons (whether members of the company or not) as the member’s proxy or proxies, to attend and vote on the member’s behalf. Where two proxies are appointed the appointments shall be of no effect unless each proxy is appointed to represent a specified proportion of the member’s voting rights. Forms of proxy must be deposited at the registered office of the company in West Perth not less than forty-eight (48) hours before the time appointed for the holding of the meeting.

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Metals Australia Ltd