METRO MINING LIMITED — Capital/Financing Update 2010

Oct 18, 2010

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ACN 117 763 443

ASX ANNOUNCEMENT

19 October 2010

30% INCREASE IN BUNDI COAL RESOURCE TO 381Mt

Highlights

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• Increase in JORC Inferred Resource from 292Mt to 381Mt* of thermal coal at the Bundi Project area, Surat Basin

• Drilling is confirming down dip continuity and correlation of Macalister Seams in the Wandoan District.

• MetroCoal’s Surat Basin Thermal Coal Resource increased to 709Mt* tonnes of Underground and UCG.

MetroCoal Limited ( ASX-MTE ) is pleased to announce a 30% increase of the Bundi Project resource.

The Bundi Project area, within the Company‟s EPCs 1164 & 1251 Wandoan West in the Surat Basin, is the down dip extension of the Elimatta and Xstrata Ltd‟s Wandoan mining project areas (see diagram on following page). Further drilling and geological modelling has confirmed the correlation and continuity of the Macalister Upper (MU) Seam and extended the resource area.

The increase in the „Inferred‟ tonnage is 89Mt.

Seam	Area **(km2) **	Volume **(m3x106) **	Tonnage (Mt)
MU10- MU50	84	249.5	381

Exploration planning is underway to increase the borehole density within the Bundi resource. The next drilling program for the Bundi area is planned to increase the resource confidence to an „Indicated‟ category via a staged process commencing in 2011.

Although the primary focus remains on the Macalister Upper seam it is becoming apparent that the Kogan and Macalister Lower Seams are correlatable in some areas and there may be scope to include these additional seams in the resource through the planned, closer spaced drilling.

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MetroCoal‟s total Resources are now as follows:

Resource1	Norwood (Underground Coal)	Bundi (Underground Coal)	Juandah (UCG)	Total (UG & UCG)
Inferred Indicated Total	156 Mt - 156 Mt	381Mt - 381Mt	149 Mt 23Mt 172 Mt	686Mt 23Mt 709Mt
1. See MTE ASX Release 18 October2010 – Annual Report 2010

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For further information, please contact:

Mr Mike O’Brien Mr Theo Psaros Chief Executive Officer Chief Operating Officer and Company Secretary Phone: +61 (7) 3249 3040 Fax: +61 (7) 3249 3041 Email: admin@metrocoal.com.au Postal Address: GPO Box 122, Brisbane QLD 4001

Further information on MetroCoal can be found on our website www.metrocoal.com.au

Competent Person Statement

* The information in this statement that relates to in situ coal resources potential is based on information compiled by GeoConsult Pty Ltd and reviewed by Warwick Smyth, who is a member of the Australasian Institute of Mining and Metallurgy (CP) Geology; and the Australian Institute of Geoscientists. Warwick Smyth is a qualified geologist (BSc Geol, Grad Dip AF&I, MAusIMM (CP), MGSA, MAIG), and a Principal Consultant for GeoConsult Pty. Ltd. and has over 19 years experience which is relevant to the style of mineralisation, the type of deposit under consideration and to the activity which has been undertaken to qualify as a Competent Person as defined by the 2004 edition of the Australian Code for Reporting of Coal Resources. Neither Warwick Smyth or GeoConsult Pty Ltd has a material interest or entitlement, direct or indirect, in the securities of MetroCoal or the Projects. GeoConsult has been commissioned to provide geological services to MetroCoal since early 2008. Fees for the preparation of this report are on a time and materials basis. Warwick Smyth and GeoConsult Pty Ltd consent to the use of this statement and references to it and extracts from it, in the form and context in which they are included. Apart from the above, neither the whole nor any part of the statement document, nor references thereto, may be included in, or with, or attached to any document, circular, resolution, letter or statement without the prior written consent of Warwick Smyth or GeoConsult Pty Ltd.

** The information in this Announcement that relates to the Exploration results and Exploration Targets is based on information compiled by Mr Neil Mackenzie-Forbes who is a Member of the Australian Institute of Geoscientists (Membership No 2035). Mr Mackenzie-Forbes is currently the exploration manager of MetroCoal. Mr Mackenzie-Forbes has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Mackenzie-Forbes has consented in writing to the inclusion in this Prospectus of the matters based on the information in the form and context it appears.

About MetroCoal Limited (ASX code: MTE)

MetroCoal is an Australian based emerging coal based energy company focused on its 100% owned coal projects in the Surat Basin in South East Queensland. MetroCoal‟s vision is to build a substantial cleaner energy and coal business based on:

1. Export thermal coal from underground mining and where possible, open cut mining; and

2. Underground Coal Gasification („UCG‟) with an integrated gas synthesis process producing high quality, clean liquid fuel (e.g. clean diesel and jet fuel), chemicals and fertilizers and syngas fuelled power generation.

MetroCoal holds extensive coal exploration tenements in the Surat Coal Basin covering approximately 4,000km[2] . These tenements are down dip of well known resources including Wandoan, Elimatta, Cameby Downs and Worri. Based on the geological information from the historic drilling programs and its own drilling results, MetroCoal has an Exploration Target of between 2.5 and 3.5 billion tonnes** with a JORC Code classification of “inferred” or better, by December 2011 for evaluation for conventional underground coal mining and where more suited - UCG.

** The potential quantity and quality is conceptual in nature, and that there has been insufficient exploration to define a Mineral Resource of Ore Reserve and that it is uncertain if further exploration will result in the determination of a Mineral Resource or Ore Reserve.

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