METRO MINING LIMITED — Interim / Quarterly Report 2015

Oct 28, 2015

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Metro Mining Limited (ASX:MMI)
Quarterly Activities Report | September 2015
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Highlights

Successful Share Issue Raises A$5.6 Million

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Successful Share Issue raises A$5.6 Million

Non-binding bauxite Off-Take MoU signed with Xinfa Group

2Mtpa Definitive Feasibility Study nearing completion

Queensland Regulator decides upon Environmental Impact Statement

Native Title negotiations progressing well

MMI in Strong financial position with a cash balance of A$6.6 Million

Refer MMI 02 Sept 2015 ASX Announcement

Metro Mining (Metro) raised A$5.6 Million through a fully underwritten Share Entitlement offer and a Placement to Institutional & Sophisticated Investors.

The Placement resulted in the issue of 25 million ordinary shares at A$0.08 per share achieving gross proceeds of A$2 Million. Shareholders who participated in the Placement were also eligible to participate in the Entitlement offer.

The Entitlement offer was a fully underwritten 1 for 7 non-renounceable offer at A$0.08 per share.

44.8 million ordinary shares were issued under the Entitlement Offer for gross proceeds of A$3.6 Million.

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Quarterly Activities Report September 2015 I Page 1

[Bauxite Hills Project]

2 Mtpa Definitive Feasibility Study nears Completion

Off-Take MoU signed with Xinfa

The Bauxite Hills Definitive Feasibility Study for a 2Mtpa operation is nearing completion and is expected to indicate robust economics.

Refer MMI 10 August 2015 ASX Announcement

During the Quarter Metro signed a non-binding bauxite Off-Take Memorandum of Understanding (MoU) with the Xinfa Group (Xinfa).

Xinfa is one of the largest integrated aluminium companies in China. It has significant refining and smelting operations in Shandong, Guangxi and Xinjiang Provinces.

Xinfa is currently a 6% shareholder in Metro.

Based on a 2 million tonne Bauxite Hills Project , the agreement contemplates a minimum contract tonnage of 1.0 million tonnes a year up to a maximum of 1.2 million tonnes a year over the initial five year term.

Metro CEO, Simon Finnis, said the MoU shows the strong relationship and exceptional good faith between Xinfa and Metro Mining.

Key Terms include:

• Initial term of 5 years with an option to extend by mutual agreement

• FOB pricing to be determined and subject to market conditions and bauxite quality

• Quality within defined parameters has been agreed

• Payment for each shipment to be made by irrevocable Letter of Credit

• Take or pay provisions applicable to both parties

• Shipping schedule to be agreed by the Parties annually in advance

• Good faith negotiations to produce a binding long term Agreement within 4 months

Discussions continue with other Chinese bauxite consumers and MMI is pleased with the expression of interest in the bauxite to be produced from Bauxite Hills

The 2 Mtpa Pre-Feasibility Study released in February 2015 showed:

• Real Net Present Value (NPV 15%) after tax of A$197 Million

• Internal Rate of Return 88% (100% equity)

• Operating margin A$28.60 per tonne

• Average Annual Net Profit after Tax A$37.9 Million

• Low Capital Expenditure A$27.4 Million

• Total Reserve of 48.2 million tonnes* (proved and probable)

• Reserve & Resource update in June 2015 increased mine life from 21 years to 27 years ** at a 2 million tonnes per annum production rate.

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**MMI confirms all material assumptions underpinning production target & corresponding financial information continue to apply & have not materially changed as per Listing Rule 5.19.2

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*Refer ASX Release 2 June 2015

Quarterly Activities Report September 2015 I Page 2

Bauxite Hills Project

Queensland Regulator decides upon an Environmental Impact Statement

Refer MMI 14 & 24 Sept 2015 ASX Announcement

The Queensland Department of Environment and Heritage Protection ( DEHP ) has decided a full Environmental Impact Statement ( EIS ) is required for the Bauxite Hills Project.

A new schedule is being developed based on the known time frames of the EIS process.

Metro is now maximising opportunities available through an EIS.

These include removal of the 2 million tonnes per annum production limit, which will:

• Improve market significance of the project

• Realise economies of scale and achieve superior financial returns

• Facilitate further community and stakeholder engagement.

On 7 October, after receiving preliminary notification that an EIS would be required, Metro requested an Inter-departmental Review. Metro’s case that only an Environmental Approval (EA) should be required was dismissed.

Whilst the DEHP decision is unexpected and disappointing, much of the work required for an EIS is underway or has already been completed.

Metro Mining has already commenced work on an EIS, the first step of which is the Initial Advice Statement and a draft Terms of Reference.

These will be lodged with the Department by end of October.

Native Title Negotiations Continue to Progress Well

Metro Mining continues to receive generous support from its Native Title holders and landowner Trustees.

Throughout this quarter great progress has been made and most of the points to be negotiated have been agreed.

The Ancillary Agreement is likely to be executed next quarter and will include Cultural Heritage provisions, Environmental Standards, Employment and Training Targets, Business opportunities and financial benefits.

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Quarterly Activities Report September 2015 I Page 3

[Corporate ]

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Metro Mining in Strong Financial Position

Metro Mining has a strong cash balance of A$6.6 Million, at 30 September 2015, following the successful raising of A$5.6 Million.

During the quarter the company spent A$1.9 Million on the following activities:

• Advancing the completion of Bauxite Hills Project Definitive Feasibility Study

• Advancing the completion of authorities and licenses to operate the Bauxite Hill Project (Environmental Approvals, Native Title Agreements)

• Further advancing the Bauxite Hills Project including activities on mining and transhipment

• Exploration activities, resource definition and business development and general working capital purposes.

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ASX : MMI

Contact: CEO Mr Simon Finnis |Company Sec Mr Scott Waddell Phone: +61 (0) 7 3009 8000 Fax: +61 (0) 7 3221 4811 Registered Office Lvl 8, 300 Adelaide St, Brisbane PO Box 10955, Adelaide St, Brisbane Q 4000 For Further Information: Email: info@metromining.com.au Electronic Copies & More Information at Website: www.metromining.com.au

FORWARD LOOKING STATEMENT Statements and material contained in this ASX Announcement, particularly those regarding possible or assumed future performance, production levels or rates, commodity prices, resources or potential growth of Metro Mining Limited, industry growth or other trend projections are, or may be, forward looking statements. Such statements relate to future events and expectations and, as such, involve known and unknown risks and uncertainties. Graphs used in this ASX Announcement (including data used in the graphs) are sourced from third parties and Metro Mining has not independently verified the information. Metro Mining is at an early development stage and while it does not currently have a operating bauxite mine it is taking early and preliminary steps (such as but not limited to Prefeasibility studies etc.) that are intended to ultimately result in the building and construction of an operating mine at its project areas. Although reasonable care has been taken to ensure that the facts stated in this ASX Announcement are accurate and or that the opinions expressed are fair and reasonable, no reliance can be placed for any purpose whatsoever on the information contained in this document or on its completeness. Actual results and developments may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors. Nothing in this ASX Announcement should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction.

COMPETENT PERSON’S STATEMENT Technical information about the Bauxite Hills Project and information in this report that relates to Exploration Results is based on information compiled by Neil McLean who is a consultant to Metro Mining and a Fellow of the Australian Institute of Mining and Metallurgy (F.AusIMM). Mr McLean has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr McLean consents to the inclusion in the report of the matters based on information in the form and context in which it appears.

The information in this report that relates to Mining and Reserves is based on information compiled by MEC Mining and reviewed by Maria Joyce, a Competent Person who is a Chartered Engineer of the Australasian Institute of Mining and Metallurgy. The information in this report to which this statement is attached that relates to the “Metro Mining – Bauxite Hills” Reserve Estimate based on information compiled by Maria Joyce, a consultant to Metro Mining and a Competent Person who is a Chartered Engineer of the Australasian Institute of Mining and Metallurgy. Maria Joyce is the head of the Technical Services division and full-time employee of MEC Mining Pty Ltd. Maria Joyce has sufficient experience that is relevant to the style of mineralization, type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Maria Joyce consents to the inclusion in the report of the matters based on her information in the form and context in which it appears.

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Quarterly Activities Report September 2015 I Page 4