METRO MINING LIMITED — Interim / Quarterly Report 2020

Jan 28, 2021

Quarterly Activities Report | December 2020

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Q4 2020 Highlights
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• The Mine’s operational results during 2020 demonstrate that, with the existing plant and equipment, the Bauxite Hills Mine can operate at a 4Mtpa rate;

• The strong operational performance during the June and Sept quarters of 2020 delivered robust cashflows leaving Metro in a satisfactory financial position heading into the 2021 operating year;

• Metro’s cash on hand and other receivables as at 31 December 2020 was $25.6Million (Sept Quarter $45.8Million);

• The planned early wet season shut-down was successfully managed during September. Work at the mine in the current quarter focussed on scheduled maintenance, mine planning and rehabilitation;

• Negotiations for further sales for 2021and beyond are progressing well;

• Metro continued to successfully operate within the established Policies and Procedures in response to COVID-19 at Corporate Offices and the Bauxite Hills Mine, with zero cases recorded;

• Trading conditions across the aluminium supply chain in China have stabilised. Steady improvement is anticipated during 2021. This is likely to have a positive impact on bauxite demand and pricing during the year;

• Operations at Bauxite Hills are planned to recommence in April 2021 when deliveries into the existing contract with Xinfa recommence;

• Subsequent to quarter end, Metro reached agreement with its debt holders to restructure and extend the repayment terms of its current debt facilities owed to Ingatatus AG and Lambhill Pty Ltd.

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Quarterly Activities Report Dec 2020 I Page 1

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Bauxite Hills Operations
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SAFETY PERFORMANCE

The last quarter of 2020 at Bauxite Hills saw 21,288 workhours completed Lost Time Injury (LTI) free. Due to the early wet season closure this was a non-operating period where a reduced workforce worked on preventive maintenance tasks and completed the rehabilitation program for 2020. Another LTI free quarter at the Bauxite Hills Mine is a great result and shows the commitment to safety from all involved.

SITE BASED ACTIVITIES

The Bauxite Hills Mine moved into its planned 2020 wet season shutdown earlier than usual with operations ceasing in September 2020. The decision was made given the impact of COVID-19 on market conditions across the aluminum supply chain (particularly in China) which negatively impacted market demand and commodity prices during 2020.

Over the December quarter, focus was on undertaking planned maintenance of the mining and haulage fleet and fixed plant, rehabilitation across the site and general activities to facilitate operations commencing in April 2021.

A significant number of Metro employees and its contractors' personnel were made redundant as a result of the early wet season shut down with only a small team remaining to complete site activities.

Key Land-based Activities Undertaken During the Quarter included:

• Ongoing maintenance of haul roads and creek crossings. This activity is expected to accelerate towards the end of the March quarter as the wet season winds down;

• Heavy maintenance of the prime movers and trailer sets;

• Ongoing maintenance of the camp and accommodation facilities;

• Early stage mine planning for 2021 mining activities.

With mining areas at BH1 and BH6 now fully opened after more three years of operations, ongoing rehabilitation activities remain a key aspect of work at Bauxite Hills. The rehabilitation involves:

• Ripping of the pit floor to allow for root penetration and growth;

• Stockpiled overburden being spread of the pit floor;

• A layer of topsoil spread over the over burden;

• Seeding of the exposed area.

The planned 2020 rehabilitation program was completed during the quarter with rehabilitation works on 105 Ha completed and seeded. Furthermore, results from rehabilitation completed during 2019 have proven to be highly successful with seed germination and plant growth in all areas exceeding expectations.

Quarterly Activities Report Dec 2020 I Page 2

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Bauxite Hills Operations
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COVID-19 RESPONSE

Metro’s response to COVID-19 has been outlined through several ASX releases throughout 2020. These Policies and Procedures continued to evolve in response to Government guidance and directives.

Similar to the September quarter, these policies and procedures operated extremely well throughout the current quarter with no disruptions to operations experienced. COVID-19 continues to be a rapidly evolving situation and procedures are constantly monitored and updated accordingly by Metro’s Senior Executives, Health & Safety Professionals, HR and IT teams.

BAUXITE SALES

Approximately 2.3Million WMT of planned 2021production will be sold under the offtake agreement in place with Xinfa. Under this contract prices received are linked to an RMB denominated alumina price index.

Metro have been progressing further sales for 2021 deliveries along several fronts, with all negotiations progressing well, albeit slowly as the market recovers from its COVID driven malaise. These discussions are contemplating a pricing structure linked to the prevailing bauxite market price.

Additionally, Metro is negotiating a long-term contract that, if successfully finalised, will commence in 2022 and stretch over a 5-year period.

COVID travel restrictions have continued to impact Metro’s bauxite marketing and sales program although the in-country marketing team have been able to visit customers and their refineries throughout China, from time to time. It appears that confidence is returning to the sector given:

• Aluminum and Alumina prices (in China) have stabilized. Aluminum prices have been quite strong over the last several months and alumina is now showing gradual signs of improvement.

• Some previously idled alumina capacity is coming back online as input costs remain low allowing most to make modest profits at the prevailing prices.

• Reagent costs in China (in particularly caustic soda prices) continue to trend lower which positively impacts higher silica bauxite ores such as Bauxite Hills material.

• Ocean freight from Guinea and Indonesia have returned too more normalised levels.

BAUXITE HILLS MINE STAGE 2 EXPANSION

Metro’s Stage 2 Expansion remains the core strategy for the long-term future of Bauxite Hills. Timing for the formal commitment to Stage 2 remains influenced by economic conditions across the aluminum supply chain in China and the resulting ability for Metro to secure long-term offtake agreements with customers. Metro will continue to monitor market conditions prior to taking the decision to formally proceed with the expansion.

Debt financing remains in place through the previously announced Loan Facility from the Northern Australia Infrastructure Facility (“NAIF”). During the quarter the sunset date for Financial Close was extended to 31 March 2021.

Quarterly Activities Report Dec 2020 I Page 3

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Bauxite Hills Operations
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INDIGENOUS ENGAGEMENT

The third Liaison Committee meeting of the year was held on 10 December in Cairns and was attended by a full contingent of Seven Rivers Aboriginal Corporation (SRAC) and Old Mapoon Aboriginal Corporation (OMAC) Representatives. The agenda included feedback on the early wet season shutdown and employment reductions, and agreement was reached on facilitation of the Ancillary Agreement review in 2021.

Metro staff visited the Injinoo, Mapoon and Hope Vale communities to support the Community Liaison Officers and provide a general update on the status of mining operations to interested community groups and organisations, including the Mapoon Aboriginal Shire Council, Northern Peninsula Area Regional Council and a number of Indigenous corporations.

Metro’s Community Liaison Officers continued to spend all of their time in community, with a particular focus on seed collections and assisting with positive community programs.

Monthly community seed collection programs continued in Mapoon and Injinoo over the quarter

Bauxite Price Outlook

BAUXITE PRICE OUTLOOK

Prices across the Aluminium supply chain have stabilised and are now showing gradual signs of improvement. There was reduced volatility in alumina and bauxite prices although some nervousness remains amongst refineries.

Towards the end of 2020 (and into 2021), there has been a divergence in trends between prices for High Temp (HT) and Low Temp (LT) bauxite imported into China.

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CBIX Regional Bauxite Indices
Source: CM Group
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50
45
40
35
Australia HT CIF Guinea LT CIF Indonesia LT CIF
30
May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21
US$/DMT
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Quarterly Activities Report Dec 2020 I Page 4

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Bauxite Price Outlook
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The decline in LT bauxite prices are mainly being driven by more Guinea material being exported into an already well-supplied LT market as a result of the number of new Guinean bauxite projects that commenced in 2020. However, there are now indications that ore supply (particularly from non-integrated suppliers) is being impacted particularly with freight rates returning to more normalised levels.

In contrast, HT prices have started to show price strength given limited new supply coming on stream, the upcoming wet season in Australia which impacts shipping rates and a reduction in refineries switching between HT and LT operations.

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CBIX Bauxite Price Index US$/DMT
Source: CM Group
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60.0
55.0
50.0
45.0
40.0
35.0
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20
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Chinese Alumina Price
(RMB/t)
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3,400
3,200
3,000
2,800
2,600
2,400
2,200
2,000
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Quarterly Activities Report Dec 2020 I Page 5

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Corporate
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CASH POSITION: At quarter end Metro’s cash on hand and other receivables (including GST refund) was A$25.6M compared to $45.8M at the end of Sept 2020 (this is before trade creditors & other payables). In addition, Metro holds A$0.3M of restricted cash, comprising various security deposits.

The early wet season shutdown in September provided the opportunity and time to streamline operations by identifying a range of initiatives aimed at lowering the unit cost base at Bauxite Hills. This included rationalising work rosters, employment structures and the production logistics chain. These changes will be implemented for 2021 operations and will position Metro to better manage the inherent market volatility and also facilitate production capacity above 4Mt, if loading conditions are favourable and sales are there to support increased production. Implementing these initiatives is expected to reduce site operating costs by >5% compared to the 2020 operating budget. In addition to onsite savings, Corporate and Administration costs were significantly reduced during the current non-operating period and since that time further cost saving initiatives have been implemented.

DEBT FACILITIES: As at the end of the current quarter, Metro had two fully drawn A$ project debt facilities, totalling A$35 Million (excluding accrued interest). Subsequent to quarter end, Metro negotiated a revised repayment schedule with its senior lenders as follows:

• The new amortisation schedule for the A$20.0M facility with Ingatatus AG Pty Ltd (Ingatatus) is:

• Maturity on 1 September 2022

• Three equal repayments on 1 September 2021, 1 July 2022 and 1 September 2022.

• The new amortisation schedule of the two A$7.5M facilities held by Ingatatus AG and Lambhill Pty Ltd (Lambhill) respectively is:

• Maturity on 1January 2023

• Three equal repayments on 1 July 2022, 30 September 2022 and 1 January 2023.

All other terms and conditions of the facilities remain unchanged. Metro has sought and obtained ASX confirmation that the variations outlined above are not inconsistent with the terms of the waiver granted to Metro in respect of ASX Listing Rule 10.1 on 30 Sept 2019.# The restructure and extension to the repayment terms has therefore been agreed without the need for Metro to obtain shareholder approval. # ASX previously granted Metro a waiver in respect of Listing Rule 10.1 to allow Metro to grant a second ranking security over its Bauxite Hills Mine assets in favour of Ingatatus, an associate of Balanced Property, a substantial holder of Metro. The terms of that waiver are summarised in the announcement of 28 October 2019.

OTHER:

• No forward sale, A$/US$ contracts were in place as at Quarter end.

• An amount of $11K was paid to related parties and their associates (Core Metallurgy Pty Ltd) for metallurgical consulting services provided on an arm’s length basis.

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ASX: MMI | ACN 117 763 443

For Further Info: T : +61 (0) 7 3009 8000 | E : info@metromining.com.au |W: www.metromining.com.au Contact: Simon Finnis, Managing Director & CEO | Mitchell Petrie: Co Sec | Duane Woodbury : CFO Address: Lvl 2, 247 Adelaide St, Brisbane | GPO Box 10955, Brisbane Q 4000

This ASX Announcement has been authorised by, Metro Mining Director, Simon Finnis.

This Announcement has been prepared for publication in Australia and may not be released or distributed in the USA. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the USA or any other jurisdiction. Any securities described in this announcement have not been, and will not be, registered under the US Securities Act of 1933 (as amended) and may not be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws.

Quarterly Activities Report Dec 2020 I Page 6

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity

METRO MINING LIMITED ABN Quarter ended (“current quarter”) 45 117 763 443 31 DECEMBER 2020

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers(Refer: Note 1) 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs(Refer: Note 2) (e) administration and corporate costs 1.3 Dividends received 1.4 Interest received 1.5 Interest and other costs of finance paid (Refer to Item 3.9) 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	16,405 - - (15,890) (1,463) (470) - 3 - - - 26	134,250 - - (115,768) (16,430) (2,494) - 72 - - - 117
	(1,389)	(253)

Note 1: ‘Receipts from customers’ is only cash received and excludes amounts outstanding under letters of credit.

Note 2: ‘Staff costs’ include both corporate and operational staff.

2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation (e) investments	- - (67) (11) -	- - (2,427) (457) -

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
(f) other non-current assets 2.2 Proceeds from the disposal of: (a) entities (b) tenements (c) property, plant and equipment (d) investments (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) - Release of / (payment for) Financial Assurance 2.6 Net cash from / (used in) investing activities	- - - - - - - - (1)	- - - 80 - - - - 6,949
	(79)	4,145
3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) - Interest Paid - Principal Elements of Lease Payments - Other 3.10 Net cash from / (used in) financing activities	- - - (2) - - (14) - (983) (443) -	- - - (2) - (690) (679) - (4,771) (3,988) (50)
	(1,442)	(10,180)

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	28,810 (1,389) (79) (1,442) (453)	32,547 (253) 4,145 (10,180) (812)
	25,447	25,447
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	25,447 - - -	28,810 - - -
	25,447	28,810
6. Payments to related parties of the entity and their associates		Current quarter $A'000
6.1 Aggregate amount of payments to related parties and their associates included in item 1() 11* 6.2 Aggregate amount of payments to related parties and their associates included in item 2 - Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.		11
		-

• (*) The aggregate amount of payments to related parties and their associates is a payment to Core Metallurgy Pty Ltd for metallurgical consulting services provided on an arm’s length basis.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

7. 7.1 7.2 7.3 7.4 7.5 7.6	Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 Loan facilities 35,000 35,000 Credit standby arrangements - - Other (please specify) - - Total financing facilities 35,000 35,000 Unused financing facilities available at quarter end - Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		35,000	35,000
		-	-
		-	-
		35,000	35,000
	1. Ingatatus AG Pty Ltd. $20M. 12%. 1 September 2022. Secured. 2. Ingatatus AG Pty Ltd. $7.5M. 9%. 1 January 2023. Secured. 3. Lambhill Pty Ltd. $7.5M. 9%, 1 January 2023. Secured.

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8	Net cash from / (used in) operating activities (item 1.9) (1,389) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (11) Total relevant outgoings (item 8.1 + item 8.2) (1,400) Cash and cash equivalents at quarter end (item 4.6) 25,447 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 25,447 Estimated quarters of funding available (item 8.6 divided by item 8.3) 18 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. If item 8.7 is less than 2 quarters, please provide answers to the following questions: 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?	(1,389) (11) (1,400) 25,447 -
		25,447
	Answer:NOT APPLICABLE
	8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
	Answer:NOT APPLICABLE

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

Answer: NOT APPLICABLE

Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Date: 29 January 2021

Authorised by: . BY THE BOARD

(Name of body or officer authorising release – see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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