METRO MINING LIMITED — Capital/Financing Update 2014

Aug 26, 2014

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ACN 117 763 443

ASX Announcement

27 August 2014

MetroCoal Limited agrees to provide interim loan funding to Cape Alumina Limited

MetroCoal Limited (MetroCoal) has agreed to provide Cape Alumina Limited (Cape) with short term, interim loan funding of $250,000. The key terms of the loan are set out in the Annexure to this announcement.

MetroCoal has provided this loan on “arms length” terms in order to enable Cape to continue exploration and other studies at its Bauxite Hills Project. Without these funds Cape would be unable to commit to the evaluation program planned for the remainder of this dry season or the forth-coming wet season environmental work. Missing this cycle could delay the Bauxite Hills evaluation, permitting and feasibility studies program by up to 12 months.

MetroCoal pointed out in its recent Bidders Statement that although Cape has a number of options by which it may raise funds the MetroCoal board believes it is unlikely to raise the necessary finds without MetroCoal’s support. MetroCoal would like to take this opportunity to record its ongoing support for Cape and remind Cape shareholders that MetroCoal’s offer presents an attractive option for providing the funds necessary to progress Cape’s projects.

MetroCoal’s supplementary bidder’s statement in respect of the interim loan funding to Cape Alumina accompanies this announcement.

For further information please contact:

Mr Mike O’Brien Chief Executive Officer Phone: +61 (7) 32493040 Fax: +61 (7) 32493041 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

Annexure – Key terms of MetroCoal loan to Cape

Term	Details	Details	Details	Details	Details
1. Loan Amount	$250,000.
2. Approved Purpose(for use of LoanAmount)	The evaluation, permitting and feasibility studies of Cape’s Bauxite Hillsproject.
3. Interest	10% per annum, calculated daily and payable on repayment of theLoan Amount.
4. Repayment	The Loan Amount must be repaid by the earlier of:12 months after the close of MetroCoal’s off-market offer dated19 August 2014 for the shares in Cape (that MetroCoal doesnot already hold) (Offer); or
		21 days after Cape has raisthh th i f kt		ed $1 million (or more) of capitalbl iti b C
		roug e ssue o mare		e secures y ape.
5. Events of default:	t
		Any monies owdefault occurs,his kind	ing will be immediatewhere such events a	ly due and payre standard for	able if an event ofan agreement of
		.
6. Effect of loan ondefeating conditionsunder the Offer:		h ti h	d tht if th	ti	ti f th L
	e pares ave agree a e execuon or operaon o e oanAgreement constitutes an occurrence or non-fulfilment of any defeatingconditions under the Offer by Cape, MetroCoal waives its rights withregards to the benefit of the relevant Defeating Condition only to theextent affected by the Loan Agreement.
7. No otherindebtedness orencumbrance:	Cape has agreed not to incur, without MetroCoal’s consent, any otherindebtedness or create or allow any encumbrance over any propertyowned by it except in certain prescribed circumstances.
8. Security:	The Loan Amount is unsecured.