METRO MINING LIMITED — AGM Information 2010

Oct 17, 2010

METROCOAL LIMITED

ABN 45 117 763 443

CNR LYTTON ROAD & STAFFORD STREET EAST BRISBANE, QLD 4169 GPO Box 122, Brisbane Qld 4001 Tel: 61 7 3249 3040 Fax: 61 7 3249 3041 Home Page: www.metrocoal.com.au

18 October 2010

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of MetroCoal Limited ABN 45 117 763 443 ( MetroCoal or Company ) will be held at the offices of HopgoodGanim Lawyers, Level 7, Waterfront Place, 1 Eagle Street, Brisbane on Thursday, 18 November, commencing at 10:00am.

AGENDA

The agenda for the meeting is as follows:

1. Opening of meeting

2. Consideration and discussion of Audited Financial Statements for the year ended 30 June 2010, which are being circulated to shareholders in the attached Annual Report

3. Consideration of Adoption of the Remuneration Report for the year ended 30 June 2010 (see Resolution 1)

[Note – the vote on this resolution is advisory only and does not bind the Directors of the Company]

1. Re-election of Mr Andrew Gilles as a Director (see Resolution 2)

2. Increase of the remuneration of non-executive Directors (see Resolution 3)

3. Ratification of Placement Shares (see Resolution 4)

4. Approval of Further Placement Shares (see Resolution 5)

5. Other business

6. Close of meeting

The Explanatory Statement and the Proxy Form accompanying this Notice of Meeting are incorporated in and comprise part of this Notice of Meeting.

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ORDINARY BUSINESS

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

Resolution 1: Remuneration Report

“ That the Company be authorised to adopt the Remuneration Report for the year ended 30 June 2010”.

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

Resolution 2: Re-Election of Andrew Langham Gilles as a Director

“That, in accordance with article 38.1(c) of the Constitution of the Company, Mr Gilles, having retired by rotation and being eligible, offers himself for re-election, be appointed as a Director of the Company.”

Resolution 3: Increase in Non-executive Director Remuneration

“That for the purposes of ASX Listing Rule 10.17, Article 39.5 of the Company’s Constitution, and for all other purposes, the maximum aggregate annual remuneration payable to nonexecutive directors of the Company or any subsidiaries of the Company be increased by $100,000 from $250,000 to $350,000 per annum.”

Voting Exclusion Statement

The Company will disregard any votes cast on this Resolution by:

• (a) any Director of the Company or a subsidiary of the Company ( Relevant Director ); and

• (b) any associate of a Relevant Director.

However, the Company need not disregard a vote if:

• (a) 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

• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

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Resolution 4: Ratification of First Tranche Shares

“That in accordance with the provisions of Listing Rule 7.4 of the Listing Rules, and for all other purposes, the Shareholders ratify the issue of 21,252,549 Shares in the Company to the persons described in the Explanatory Memorandum ( Recipients ).”

Voting Exclusion Statement

The Company will disregard any votes cast on this Resolution by:

• (a) the Recipients; and

(b) any associate of a Recipient. However, the Company need not disregard a vote if:

(a) 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

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

Resolution 5: Approval of Second Tranche Shares

“That, in accordance with the provisions of Listing Rule 7.1 of the Listing Rules, and for all other purposes, the Shareholders approve the issue of up to another 14,000,000 Shares in the Company to the Recipients.”

Voting Exclusion Statement

The Company will disregard any votes cast on this Resolution by:

• (a) the Recipients; and

• (b) any associate of a Recipient.

However, the Company need not disregard a vote if:

(a) 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

• (b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

By order of the board

Theo Psaros Company Secretary 18 October 2010

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EXPLANATORY STATEMENT

The following information is provided to shareholders of MetroCoal Limited ABN 45 117 763 443 ( MetroCoal or Company ) in connection with the business to be considered at the Annual General Meeting of shareholders to be held at the offices of HopgoodGanim Lawyers, Level 7, Waterfront Place, 1 Eagle Street, Brisbane on Thursday, 18 November, commencing at 10:00am.

INTRODUCTION

The Notice of Meeting, which is also enclosed, sets out details of proposals concerning the five (5) Resolutions to be put to shareholders.

ORDINARY BUSINESS

Resolution 1: Remuneration Report

The Board has submitted its Remuneration Report to Shareholders for consideration and adoption by way of a non-binding Advisory Resolution.

Please note that you may obtain a copy of the 2010 Annual Report from the Company’s website www.metrocoal.com.au

The Remuneration Report is set out in the Directors’ Report section of the Annual Report. The Report:

• explains the Board’s policy for determining the nature and amount of remuneration of executive directors and senior executives of the Company;

• explains the relationship between the Board’s remuneration policy and the Company’s performance;

• sets out remuneration details for each Director and the most highly remunerated senior executive of the Company; and

• details and explains any performance conditions applicable to the remuneration of executive directors and senior executives of the Company.

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

The Board unanimously recommends that Shareholders vote in favour of adopting the Remuneration Report. A vote on this Resolution 1 is advisory only and does not bind the Directors of the Company.

Resolution 2: Re-election of Andrew Langham Gilles as a Director

Andrew Gilles was appointed as a director of the Company on 6 January 2006.

Under Article 38.1 (c), the Company’s Constitution requires that at each Annual General Meeting, one-third of the Directors in office at the date of the last Annual General Meeting stand for re-election. Mr Gilles retires in accordance with the Company’s Constitution and, being eligible, offers himself for re-election as a Director.

Mr Gillies has been Managing Director of ASX-listed Metallica Minerals Limited and its subsidiaries since 1997. He has been instrumental in the selection and acquisition of all the mineral assets now held by the Metallica group, Cape Alumina Ltd and MetroCoal Ltd. Mr Gillies is a founding Director of MetroCoal.

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Mr Gillies' key strength is mineral resource management and strategic planning specialising in project generation, selection and acquisition. He has acquired a considerable database and significant knowledge of mineral deposits in Queensland. Since 1985 he has worked continuously as a geologist in the mining and exploration industry, accruing over 22 years experience across a range of commodities. He has been a company geologist with BHP Gold Mines Ltd, Perseverance Corporation Ltd and Cracow Mining Venture and as a consulting geologist for various exploration companies until his full time role with Metallica in 1997. Over the last 22 years he gained valuable experience in the exploration, feasibility, development, open pit and underground mining of mineral deposits.

Mr Gillies is a Director of ASX listed Cape Alumina Ltd, Orion Metals Ltd and Planet Metals Ltd and is also a Director of the Queensland Resources Council. Mr Gillies graduated from the University of Queensland in 1985 with a BSc (Geology) and is a member of the Aus.I.M.M.

The Directors (with Mr Gilles abstaining) recommend that you vote in favour of this Ordinary Resolution.

Resolution 3: Increase of non-executive Director Remuneration

Pursuant to Resolution 3, the Company is seeking to obtain approval under ASX Listing Rule 10.17 and Article 39.5 of the Company’s Constitution to increase and set the aggregate annual maximum non-executive Director remuneration payable by the Company (and its subsidiaries) by $100,000 from $250,000 to $350,000 per annum.

The current Directors take the view that it is appropriate to increase the maximum nonexecutive Director remuneration in this manner, to give the Company the flexibility it requires to attract and retain appropriately qualified non-executive Directors to the Board on suitable terms.

Resolutions 4 and 5: Ratification of First Tranche Shares and Approval of Second

Tranche Shares

Share Placement

The Company is in the process of raising $10 million, via a share placement, to fund additional exploration drilling, payments for initial infrastructure development funding and to increase working capital ( Placement ).

The Placement involves the issue of Shares in 2 tranches. The first tranche was issued on 18 October 2010 ( First Tranche ), raising $6,375,765, and the Company intends to issue the second tranche on or about 19 November 2010, subject to the approval of Resolutions 4 and 5.

The Placement is being conducted in 2 tranches because Listing Rule 7.1 (as discussed below) prevents the Placement being conducted in a single tranche. By approving Resolution 5, the Company can then proceed with the issue of the Second Tranche. By also approving Resolution 4, the Company will have the flexibility, within the boundaries of Listing Rule 7.1, to raise additional funds over the next 12 months, through the issue of further shares, without the need for further shareholder approval.

Listing Rule 7.4 – Ratification of First Tranche

Listing Rule 7.1 prohibits a company, except in certain cases, from issuing new shares equivalent in number to more than 15% of its capital in any 12 month period without the prior approval of its shareholders. Under Listing Rule 7.1.6, where it is less than 12 months since first quotation of a company's securities, Listing Rule 7.1 applies to the number of securities on issue as at the date of first quotation. Securities issued with shareholder approval under ASX Listing Rule 7.1 do not count towards the 15% limit.

ASX Listing Rule 7.4 provides that an issue of securities made without prior approval under ASX Listing Rule 7.1 can be treated as having been made with that approval if shareholders subsequently approve it.

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In accordance with ASX Listing Rule 7.4, Shareholder approval is sought to ratify the issue of the First Tranche Shares to the Recipients, being securities issued by the Company subsequent to first quotation for which shareholder approval has not already been obtained.

If Resolution 4 is approved it will have the effect of refreshing the Company’s ability to issue up to a further 15%, subject to the passing of Resolution 5, of its capital during the next 12 months without the need to obtain further shareholder approval.

Listing Rule 7.1 – Approval of Second Tranche

As noted above, Listing Rule 7.1 prohibits a company, except in certain cases, from issuing new shares equivalent in number to more than 15% of its capital in any 12 month period without the prior approval of its shareholders. Securities issued with shareholder approval under ASX Listing Rule 7.1 do not count towards the 15% limit.

In accordance with Listing Rule 7.1 the Company is now seeking the approval of Shareholders for the issue of the Second Tranche Shares.

If Resolution 5 is approved, it will have the effect that the Second Tranche Shares will not be counted as part of the Company’s 15% limit under ASX Listing Rule 7.1, and the Company can issue up to a further 15% of its capital during the next 12 months without the need to obtain further shareholder approval.

Listing Rule Information

For the purposes of Listing Rules 7.3 and 7.5, the Company advises that:

• The number of First Tranche Shares issued was 21,252,549 at an issue price of $0.30 each;

• The maximum number of Second Tranche Shares to be issued is 14,000,000 at an issue price of $0.30 each;

• The Second Tranche Shares will be issued within 3 months of the date of the Meeting;

• The First Tranche Shares were issued by placement via Patersons Corporate Finance to sophisticated investors, professional investors and other investors in who satisfy one or more of the exemptions specified in section 708 of the Corporations Act and are not a related party of the Company (within the meaning of the Corporations Act and the Listing Rules).

• The Second Tranche Shares will be issued by placement via Patersons Corporate Finance to the same sophisticated investors, professional investors and other investors in who satisfy one or more of the exemptions specified in section 708 of the Corporations Act and are not a related party of the Company (within the meaning of the Corporations Act and the Listing Rules).

• The First Tranche Shares and the Second Tranche Shares have the same rights and entitlements as all other fully paid ordinary shares in the issued capital of the Company.

• Funds raised by the First Tranche Shares will be used for additional exploration and evaluation programs and funds from the Second Tranche Shares will be used for the initial participation in infrastructure developments.

The Directors recommend that you vote in favour of both Resolution 4 and Resolution 5.

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INTERPRETATION

Annual General Meeting or Meeting means the annual general meeting of shareholders of the Company convened by the Directors and detailed in the Notice of meeting, or any adjournment thereof;

ASX means Australian Securities Exchange Limited;

Company means MetroCoal Limited ABN 45 117 763 443;

Constitution means the constitution of the Company from time to time;

Corporations Act means the Corporations Act 2001 (Cth) ;

Directors means the board of directors of the Company from time to time;

Explanatory Memorandum means this explanatory memorandum accompanying this Notice;

Listing Rules means the Official Listing Rules of the ASX;

Notice of Meeting or Notice means the notice of meeting giving notice to shareholders of the Annual General Meeting, accompanying this Explanatory Memorandum;

Ordinary Resolution means a resolution passed by more than 50% of the votes at a general meeting of shareholders; and

Special Resolution means a resolution passed by at least 75% of the votes at a general meeting of shareholders.

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Any inquiries in relation to the Resolutions or the Explanatory Memorandum should be directed to Theo Psaros (Company Secretary):

Post: Attn: Theo Psaros GPO Box 122 Brisbane QLD 4001 Tel: +617 3249 3040 Fax +617 3249 3041 Email: tpsaros@metrocoal.com.au

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Proxy, representative and voting entitlement instructions

Shareholders are entitled to appoint up to two (2) individuals to act as proxies to attend and vote on their behalf. Where more than one (1) proxy is appointed each proxy may be appointed to represent a specific proportion of the shareholder's voting rights. If the appointment does not specify the proportion or number of votes each proxy may exercise, the appointment will be of no effect.

A shareholder who is a body corporate is able to appoint representatives to attend and vote at the meeting under Section 250D of the Act.

The proxy form (and unless previously noted on the share registry, the power of attorney or other authority, if any, under which the proxy form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the proxy form (and the power of attorney or other authority) must be received not less than 48 hours before the time for holding the meeting, or adjourned meeting as the case may be, at which the individual named in the proxy form proposes to vote.

Proxy forms may be lodged using the reply paid envelope or:

Online : www.linkmarketservices.com.au

By Mail : C/- Link Market Services Limited, Locked Bag A14, Sydney South NSW 1235 Australia By Fax : +61 2 9287 0309

Hand Delivery : C/- Link Market Services Limited, Level 12, 680 George Street, Sydney NSW 2000

If a representative of the corporation is to attend the meeting the appropriate “Certificate of Appointment of Corporate Representative” should be produced prior to admission. A form of the certificate may be obtained from the Company’s share registry.

The proxy form must be signed by the shareholder or his/her attorney duly authorised in writing or, if the shareholder is a corporation, in a manner permitted by the Act.

The proxy may, but need not, be a shareholder of the Company. In the case of shares jointly held by two (2) or more persons, all joint holders must sign the proxy form. A proxy form is attached to this Notice.

Voting entitlement

For the purposes of determining voting entitlements at the Meeting, shares will be taken to be held by the persons who are registered as holding the shares at 6.00pm (Brisbane time) on Tuesday 16 November 2010. Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the Meeting.

Signing instructions

You must sign the proxy form as follows in the spaces provided:

Individual:	Where the holding is in one name, the holder must sign.
Joint Holding:	Where the holding is in more than one name, all of the security holders should sign.
Power of Attorney:	To sign under Power of Attorney, you must have already lodged this document with the
	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 can also
	sign alone.
	Otherwise this form must be signed by a Director jointly with either another Director or a
	Company Secretary.
	Please indicate the office held by signing in the appropriate place.

MTE Notice of Meeting - 2010 AGM FINAL