METRO MINING LIMITED — Investor Presentation 2021

Aug 16, 2021

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Explore | Define | Mine and Growth August 2021

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FORWARD LOOKING STATEMENT

Statements and material contained in this Presentation, 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 Presentation (including data used in the graphs) are sourced from third parties and Metro Mining has not independently verified the information. Although reasonable care has been taken to ensure that the facts stated in this Presentation 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 Presentation 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

Any information in this report that relates to the Bauxite Hills Mine Mineral Resource is based on information compiled by Ed Radley who is a consultant to Metro Mining and a Member of the Australian Institute of Mining and Metallurgy (MAusIMM). 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 2012 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 Report the matters based on the information in the form and context it appears

COMPETENT PERSON’S STATEMENT

Any information in this report to that relates to the “Metro Mining – Bauxite Hills” Reserves is based on information compiled by MEC Mining and reviewed by Edward Bolton, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Edward Bolton is a full-time employee of MEC Mining Pty Ltd. Edward Bolton 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’. Edward Bolton consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

COMPETENT PERSON’S STATEMENT

Any 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.

KEY RISK FACTORS

Whilst some changes to operating plans have been outlined in this presentation, Metro directs the reader to the comprehensive description of Key Risk Factors outlined in the in the Equity Raising Presentation of 25 June 2021.

2 | ASX : MMI | August 2021 I

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Recent Initiatives Transform Company’s Future

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2021 and 2022 de-risked with multiple pathways to Stage 2 Expansion established

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Main Features
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Key Implications
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• ✓ Raised A$ 16.9 M through capital raise (minimum was A$ 10 M) including $6.5 M retail portion

• ✓ New management team delivering change

• ✓ Chinese market trending towards increased high temp. bauxite imports: trials underway / under negotiation at 3 refineries

• ✓ Cost reductions being implemented to take A$ 6 M out of cost base in the second half of 2021

• ✓ Floating crane contracted to load Capesize vessels from Q4 2021 at 4 Mt/a rate

▪ 3.3 to 3.5 Mt sales for 2021, 4 Mt target for 2022

▪

Floating crane immediately provides ~50% relief (~US$12 /t) from prevailing Ultraclass freight rates

▪

Crane is a logical progressive step towards stage 2 expansion whilst keeping options open

▪

Implementation of capital raise, floating crane, sales book and cost reductions de-risk 2021, builds cash for the wet season and transforms liquidity for 2022

All tonnes are wet metric tonnes unless otherwise stated 3 | ASX : MMI | August 2021 I

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Evolution of Strategy and Market Positioning

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Metro moving rapidly to de-risk cost structure and provide options to Stage 2 Expansion

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Metro Establishment Strategy
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Strategic Evolution
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• ✓ Rapid low capex establishment

• ✓ 3 to 4 Mt/a initial scale

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• ✓ Capital intensive jump to Stage 2 Expansion with large floating terminal

• ✓ Single base load customer

• ✓ Simple contractor operations

• ✓ Barge to geared Ultraclass vessels

▪ Low capex approached retained

▪

Phased & de-risked route to +6 Mt/a scale

▪

Value in use, technically supported marketing

▪

• 3 base load customers plus spot

▪

Highly productive owner operator model

▪

Only Capesize supplier from Australia

▪

Achieve global Q1 delivered costs to market at 4 Mt/a scale

4 | ASX : MMI | August 2021 I

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2021 Implementation sequence Cost reductions and floating crane allow intensified marketing approach

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5 | ASX : MMI | August 2021 I

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New Floating Crane Barge Procured

A rapidly executed transformational improvement to Metro’s delivered cost base

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• ✓ Floating Crane was studied as part of Stage 2 Expansion BFS in 2019

• ✓ Recently constructed and commissioned Damen (NL) design barge with Liebherr 35t Crane

• ✓ Will fully load a 180 kt Capesize vessel at 16 to 18.5 kt per day

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US$35/t
Cape (Guinea to China)
Ultramax (Skardon River to China)
US$30/t
Cape (Skardon River to China)
US$25/t
US$20/t
US$15/t
US$10/t
US$5/t
US$0/t
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• ✓ Annual capacity (Metro operating season) 3.7 to 4.3 Mt/a- current sales target for 2021 and 2022

• ✓ Immediately provides US$12 /t relief from prevailing geared Ultraclass freight rates

• ✓ Added to current TSA fleet with an incremental increase to fixed and variable costs of A$2-3 /t

• ✓ Target arrival end Sept’21, commission in Oct’21

6 | ASX : MMI | August 2021 I

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Cost reduction underway

Immediate focus and good traction on cost saving initiatives at site and corporate

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30 34
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Site Costs

✓ 2021 sales and production run rate 3.3 to 3.5 MWMT/a

✓

Established a cash cost “war room” to originate, assign, risk assess and implement ideas rapidly

✓

Mine cost and productivity drive starting in July to remove A$ 6 M of costs in 2H 2021

• ✓ Restructure rosters to 3 MWMT run rate to remove fixed costs

• ✓ Drive individual equipment productivity to achieve volume

✓ Planned maintenance windows

✓

• Removal of all discretionary spend- site & corporate

✓

• 15% reduction staff and workforce by natural attrition

• ✓ Approved protocol to remove OGV quarantine period

• ✓ Good traction in July offsetting freight rate. Further savings by Q4 to offset floating crane mobilization & costs

7 | ASX : MMI | August 2021 I

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Current Market Expansion Phase Favors Metro

Increasing demand from high temperature refineries switching away from domestic bauxite

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• ✓ From 2015 to 2019- increasing China domestic bauxite prices, decreasing quality, higher caustic prices, increased availability of imported bauxite

• ✓ Refineries treating domestic bauxite (diaspore) are all “high temperature” refineries

• ✓ Since 2018 Shanxi/Henan refineries increasingly trialing and switching from local to imported bauxite. Imported bauxite to these regions has almost trebled since June 2019

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• ✓ These are natural targets for Metro high temperature bauxite due to existing high temperature technology operations and practice

• ✓ Some will switch to low temperature operation. That requires modification capex and significant change to operating practice and cannot easily swing back to domestic bauxite campaigns

Source: CM Group

8 | ASX : MMI | August 2021 I

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Metro Contestable Market to Grow by 100%

Probable >30 Mt/a increase in High Temp segment in China

✓

By 2031 CM Group forecast 30 Mt/a increase in Chinese bauxite market but 80 Mt/a increase in imports as inland refineries switch from domestic bauxite

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✓ Metro estimate current high temp market is approx. 35 Mt/a

✓ Metro has ~12% market share

✓

Assuming 50% of Chinese refineries switching from domestic bauxite remain high temp. and 20% of new refinery capacity is high temp. Metro contestable market grows to >65 Mt/a

✓ Metro maintain 10% market share for Stage 2 @ 6 Mt/a

✓ Assumption rationale backed up by current experience/ conversations with customers

• ✓ Risk mitigation vs over-reliance on Guinea/Indonesia

• ✓ Hedge against elevated freight rates like today

• ✓ Metro as alternative to big players

✓

• High available alumina bauxite, like Metro, has advantage of better inland transport economics

9 | ASX : MMI | August 2021 I

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Metro technical trial support to 3 refineries

✓

Optimizing alumina refining is a highly technical chemical engineering process and Metro has strengthened its marketing & technical expertise

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• ✓

• Each refinery has different equipment, reagent costs and operating conditions and a different value in use (VIU) for bauxite usage

✓

Many Chinese customers current domestic diasporic bauxite supply is alumina/silica ratio of 4 to 5

• ✓

Metro bauxite is similar to Weipa bauxite

• ✓

Metro team working with Chinese refiners on operating protocol for Metro bauxite to maximize alumina and minimize silica extraction

• ✓ Temp: 235 to 240 deg C

Metro/diaspore rough price equivalence	Bauxite Price /DMT
Approx Chinese Domestic Bauxite (A/S 5, delivered Shanxi plant, incl. VAT)	RMB 400 / US$ 60
Less VAT (@13%)	RMB 52 / US$ 8
Less avg. port, storage, inland transport costs	RMB 150 / US$ 13
Metro bauxite price CIF Chinese port (VIU adjusted)	US$ 37 to US$42

• ✓ Residence time: <20 Mins

• ✓ Addition of small percentage of lime

✓

Metro bauxite achieves in practice bauxite/alumina ratio of 2.3 to 2.4 and an alumina/silica ratio up to 7 and should justify a VIU premium

✓

Chinese domestic prices suggests Metro CIF price of US$37 to 42 /DMT however hard to extract VIU premium in oversupplied market

Source: CM Group, CSIRO & Metro internal estimates 10 | ASX : MMI | August 2021 I

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Low cost de-risked pathway to stage 2

The Floating Crane delivers transformational step change in Metro’s economics at the 4 Mt/a scale in Q4 2021 & 2022

		FY 2020	FY 2021 (F)	FY 2022 (F) FY 2023 (F)
	Revenue (A UD / wmt)	50	4 52 1	52 1	Indicative Stae 2
	Royalties (A UD / wmt)	16 5	26 2	4 6 3	g Expansion	1
	Ocean Freight (A UD / wmt)			12	12 3
	Site Costs (F ull year: A UD / wmt)	25	23	22 18 4
	Shipped (WM T )	2.6Mt	3.3Mt 6	4.0Mt 6.0mt Subject to Price Subject to Price
	Operating Margin (A UD / wmt) 5	$4	Subject to Price
	1. 2021 and 2022 revenue forecast based on 2021 YTD realised average, converted at 0.75 AUD/USD
	2. 2021 freight forecast assumptions based on 2021 YTD realised average and 2021 Q4 Cape Size vessels rates of USD 9.93/wmt, converted at 0.75 AUD/USD
	3. 2022 and 2023 freight forecast assumptions based Cape Size vessels rates of USD 9.24/wmt and USD 8.81/wmt respectively, converted at 0.75 AUD/USD
	4. 2023 forecast site costs is basis M etro 2018 DFS Operating Costs for the full 12 month period (excluding corporate and financing costs)
	5. Operating M argin excludes corporate and financing costs
	~~**Explore	D**~~ 6. 2021(F) Shipments as described in June Quarterly Operating Activities report (28 July 2021)

11 | ASX : MMI | August 2021 I

~~Explore | D~~

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Floating Crane Pivot Provides Options

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Options remain open to achieve Stage 2 Expansion

3 to 4 Mt/a scale

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Current

Q4 2021 1 x Floating Crane Capesize Vessel (180 kt)

Self Loading geared Ultraclass Vessel (60 kt)

*Includes termination payment for floating crane. Intention to work with NAIF on extension of Floating Terminal approvals

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6+ Mt/a scale

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2023

2 x Floating Crane Capesize Vessel (180 kt) Capex ~A$ 20 M

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2023

1 x Large Floating Terminal Capesize Vessel (180 kt) Capex ~A$ 57 M*

12 | ASX : MMI | August 2021 I

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Lowest global delivered cash cost positioning

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Metro will enter Q1 with Floating Crane and Target No 1 position with Stage 2

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China Seaborne Bauxite Supply Cash Cost Curve 2023
1 [st] Quartile 2 [nd] Quartile 3 [rd] Quartile 4 [th] Quartile
100
90
80
70
60
50
40
30
20
10
0
0Mt 20Mt 40Mt 60Mt 80Mt 100Mt 120Mt 140Mt 160Mt 180Mt
Cash Cost CIF China, US$/dmt
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China Seaborne Bauxite Supply

13 | ASX : MMI | August 2021 I

Source: CM Group and Metro Mining Ltd

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Appendix: More detail on floating crane barge

14 | ASX : MMI | August 2021 I

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Floating Crane Mobilisation and Commissioning

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• ✓ Currently undergoing handover drydocking and equipment commissioning in Shanghai under Damen management

• ✓ Will complete final inspection and class certification

• ✓ Establishment items such as bauxite specific grab, sewerage system, water maker, fire control systems being added or modified before departure to meet Australian conditions

• ✓ Target departure from China September 2021

• ✓ Towage to Australia approx. 3 weeks

• ✓ Will undergo AQUIS, Border Force, AMSA inspection and clearance in Australia

• ✓ Target arrival Skardon River October 2021

• ✓ Target commission, crew training and load progressively larger vessels through October 2021

• ✓ Target fully loading Capesize vessels with target loading rates by November 2021

• ✓ All COVID dependent – China/Australia

15 | ASX : MMI | August 2021 I

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Floating Cranes: common, low risk technology

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✓ ~270 Mt/a is transhipped globally

• ✓ Indonesian coal accounts for two thirds of the volume

• ✓ Significant bauxite volumes transhipped in Guinea

✓ For example: “Sister ship” Princesse Abby- comparable size and identical crane (CBG350) has demonstrated performance of 16,835 to 24,290 t/day (gross and net) loading rates over 5 years in Indonesia

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YouTube - LOADING CARGO BAUXITE TO VESSEL FROM BARGE BY FLOATING CRANE

16 | ASX : MMI | August 2021 I

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Damen Transhipment Crane Barge 6324

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Actuals 2020 Forecast

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17 | ASX : MMI | August 2021 I

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Designed to rapidly load large vessels up to Capesize (180 kt) Most Chinese ports are Capesize capable- as used to taking iron ore and coal

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18 | ASX : MMI | August 2021 I

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Explore | Define | Mine

For Further Information Contact: Simon Wensley CEO & MD | Mitchell Petrie CoSec Ph: +61 (0) 7 3009 8000 | Lvl 2, 247 Adelaide St, Brisbane Postal Address: GPO Box 10955, Brisbane Q 4000