METRO MINING LIMITED — Interim / Quarterly Report 2013

Apr 23, 2013

2013 QUARTERLY REPORT March

Corporate details

METROCOAL LIMITED | ABN 45 117 763 443

Quarterly Activities Report For the period ended 31 March 2013

ASX CODE: MTE

Issued Capital (31/03/2013)

208,883,663 shares issued

6,000,000 Unlisted Directors’ Options 4,500,000 Unlisted management and employee options 6,250,000 Other Unlisted options

1,485 Shareholders

Top 20 Shareholders

Hold 76.84%of listed shares

Directors& Management

Mr Stephen Everett - Chairman Mr Andrew Gillies – Non-executive Director Mr Michael Hansel – Non-executive Director Mr John Haley – Non-executive Director& Company Secretary Mr Lindsay Ward – Non-executive Director

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Mr Wang Dongping – Non-executive Director Mr Robert Finch – Alternate Director to Mr. Wang

Mr Mike O’Brien – Chief Executive Officer Mr Theo Psaros – Chief Operating Officer Mr Neil Mackenzie-Forbes – Joint Venture General Manager Mr Nicholas Villa – Project Manager Mr Edward Radley – Geology Manager

Largest Shareholders

Metallica Minerals Limited 30.78% Dadi Engineering Development Group 19.63% (22.96% from 2 April 2013) Merrill Lynch (Australia) Nominees Pty Limited 16.34%

Cash Balance

As at 31 March 2013, MTE’s cash balance was approximately $12 million

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Highlights for the quarter

• Progress continues on the development of MetroCoal’s 100% owned Bundi project. The March quarter had MetroCoal preparing to continue progression on its Bundi Project. While cash preservation had been the strategy towards the end of 2012, MetroCoal has taken the initiative to progress further work on this thermal coal project in the Surat Basin with the objective to submit a Mining Lease Application in late 2013.

• Bundi Project EIS progresses. A key component of the progress of the Bundi Project is the continued preparation of the Environmental Impact Statement. The preparation for the 2013 program of works for the EIS is well underway.

• Renewed interest in Joint Venture opportunities with Indian and Chinese entities for the Bundi Project. One of the key drivers for the continued progress of the Bundi project is the pleasing level of interest in the JV investment opportunity for the Bundi project. After visits to India in late 2012 and China in March 2013, a number of energy companies have continued their evaluation of this investment opportunity.

• Columboola JV Project prepares to begin the EIS process and progress the resource evaluation and also submit a Mining Lease Application in 2013.

Resources

Metro Coal Thermal Coal Reserves &Resources

		Resources(Mt)	Resources(Mt)	Resources(Mt)	Reserves (Mt)
	MTE Ownership
Project
		Indicated	Inferred	Total
Columboola	49%	94.7	1,618	1,712.7
Goombi	49%	4.9	13.8	18.7	26.2
Bundi	100%	246.3	1,315.8	1,562.1
Dalby West	100%		520	520
Juandah	100%	24.4	224	248.4
Norwood	100%		156	156
TOTAL		370.3	3,847.6	4,217.9	26.2

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Bundi Project

The field work completed in 2012 has provided MTE with significant data on the thermal coal resource in the Bundi Project area. From late 2012 through the March 2013 quarter, MTE has taken time to update the geological model incorporating results from last year’s seismic and coal quality programs.

This updated geological model has formed the foundation for a drilling program that is expected to start mid 2013 after final land access arrangements are in place. MetroCoal’s key aims from this drilling program are to further define the Bundi thermal coal resource including the delivery of further data on groundwater, geotechnical, gas desorption and infill drilling and submit a Mining Lease application in late 2013.

An important component of the progress of the Bundi Project is the approval of the Environmental Impact Statement. MTE is currently working with respected environmental consultants, CDM Smith in planning the EIS activities so that the work will begin mid-2013 and to be completed mid-2014. Importantly, the Department of Environment and Heritage Protection in Queensland has agreed to extend the EIS submission date to mid2014.

With coal terminal and rail developers looking to assess coal developers’ participation in their respective infrastructure projects, MTE has taken the view that the progression of its Bundi Project resource confidence will allow the project to be well placed when, firstly the coal market improves, and infrastructure participation is sought.

MTE is continuing to pursue a joint venture partner into our Bundi Project and the level of response this year has been positive. While the interest is at a very early stage, it is pleasing that in these tough times for the coal industry, a number of large energy companies from China and India continue to evaluate the investment opportunity. The interest arose from MetroCoal’s participation in the Queensland Premier Newman’s Trade Mission to India and a visit to China where several Chinese energy corporations were introduced by Dadi Engineering (22.6% shareholder in MTE). MetroCoal expects to conduct visits to Bundi and Gladstone with the potential parties in late Q2/early Q3 of this year.Importantly, as a result of discussions with thermal coal consumers in China and India, MTE remains very positive in regard to future demand for thermal coal.

Figure 1 – Bundi Project Area

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Columboola Joint Venture

As previously advised,Queensland Gas Company Limited’s PL 458 overlapping the Columboola project area, including the Goombi opencut area, was granted on 19 February 2013. The JV is currently negotiating a Codevelopment agreement with QGC. Negotiations must be concluded by 16 May 2013.

The 2103 Columboola exploration program is being finalised and work is expected to commence following successful conclusion of the Co-development agreement.

The key objective for the 2013 year is to start the EIS process and progress the resource evaluation to an appropriate level so a Mining Lease application can be made.

Due to the severe limitations with rail capacity for coal transport to the Port of Brisbane, it is currently unlikely that the Goombi Project will be allocated rail capacity in the foreseeable future. Notwithstanding this, MTE will continue to liaise with Queensland Rail and the Port of Brisbane should there be a change in the rail capacity from the Central Surat to Brisbane.

Corporate Activities

MetroCoal finished the March 2012 quarter in a strong financial position with $12 million cash on hand after completing, in 2012, the drilling programs at Bundi and Columboola, released the results of the Bundi Scoping Study and completed the Bundi seismic program.

During the March quarter, MTE continued its commitment to the Wiggins Island Coal Export Terminal (WICET) expansion process (WEXP2). With port capacity essential to both our projects, MTE has also maintained its interest in the proposed Yarwun Terminal in Gladstone. The proposed Yarwun terminal is 100% owned by Tenement to Terminal Limited (3TL) in which MTE holds a 20% share. The land is freehold and provides an opportunity to develop a coal terminal at the lowest possible cost which will translate into lower tariffs and improved project profitability. 3TL is actively seeking investors in its coal terminal project.

MTE was also pleased to advise on 12 April 2013 that Dadi Engineering Development (Group) Co Ltd, had again increased its shareholding in MTE. The purchase of 6,250,000 shares increased Dadi’s interest to 47,250,000 shares resulting in a holding of 22.6% of MetroCoal’s Issued Capital.

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Figure 2 – MetroCoal’s Surat Basin Coal Tenements

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Competent Person Statement

The information in this Announcement that relates to the Compilation of existing data and Exploration Results is based on information compiled by Mr Ed Radley who is a Member of the Australian Institute of Mining and Metallurgy (MAusIMM) (Membership No 300512). Mr Ed Radley is a fulltime employee of MetroCoal Ltd, in the role of Geological Manager, Mr Ed Radley 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 Ed Radley has consented in writing for inclusion in this announcement the matters based on the information in the form and context it appears.

REGISTERED OFFICE

Cnr. Lytton Road and Stafford St, East Brisbane QLD 4169 GPO Box 122 Brisbane QLD 4001

T (07) 3249 3040 F (07) 3249 3041

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