METRO MINING LIMITED — M&A Activity 2016

Dec 6, 2016

SUPPLEMENTARY OFFER BOOKLET

OFFER BY METRO MINING LIMITED

ACN 117 763 443

to acquire all of your shares in

GULF ALUMINA LIMITED

ACN 108 086 371

The Supplementary Offer Booklet is dated 7 December 2016. The Offer closes at 7.00pm (Sydney time) on 23 December 2016.

Please call Metro Mining Limited's Company Secretary on +61 7 3009 8000 if you have any queries relating to this Offer Booklet.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to how to deal with it, you should consult your legal, financial or other professional adviser as soon as possible

FINANCIAL ADVISER LEGAL ADVISER Argonaut Capital Limited McCullough Robertson Lawyers

	Important notices
$\mathbf{1}$	Update on the Offer Terms
$2^{\sim}$	Additional Information
	Annexure A ……………………………………………………………………………………………
	Second Supplementary Prospectus
	Annexure B
	Revised Acceptance Form

Important notices

This supplementary offer booklet is dated 7 December 2016 and is intended to supplement and amend the information contained in the Offer Booklet of Metro Mining Limited ACN 117 763 443 (Metro) dated 28 October 2016 (Offer Date). Unless otherwise indicated, terms defined and used in the Offer Booklet have the same meaning in this Supplementary Offer Booklet.

The Offer may be withdrawn by sending a withdrawal document to you, but generally not within one month of the date of the Offer.

This Supplementary Offer Booklet is important and should be read in its entirety along with the Offer Booklet before deciding to accept the Offer. This Supplementary Offer Booklet is not a prospectus under the Corporations Act and has not been lodged with ASIC.

No party other than Metro has authorised or caused the issue of this Supplementary Offer Booklet, or takes any responsibility for, or makes, any statements, representations or undertakings in this Supplementary Offer Booklet.

By returning the Acceptance Form, you acknowledge that you have read the Supplementary Offer Booklet and Offer Booklet and you have acted in accordance with and agree to the terms of the Offer detailed in this Supplementary Offer Booklet and the Offer Booklet.

Definitions, currency and time

All references to currency are to Australian dollars and all references to time are to Sydney time, unless otherwise indicated.

Taxation

There will be tax implications associated with accepting the Offer. Metro considers that it is not appropriate to give advice regarding the tax consequences of accepting the Offer under this Offer Booklet and recommends that you consult your professional tax adviser in connection with the Offer.

Governing law

The Offer Booklet, Supplementary Offer Booklet and the contracts formed on acceptance of the Offer are governed by the law applicable in Queensland, Australia. By returning the Acceptance Form, you submit to the exclusive jurisdiction of the Queensland courts and courts competent to hear appeals from those courts.

No representations

Any information or representation in connection with the Offer not contained in the Offer Booklet or this Supplementary Offer Booklet may not be relied upon as having been authorised by Metro or any of its directors or officers.

Not a disclosure document

This Supplementary Offer Booklet is not a disclosure document for the purposes of the Corporations Act and does not contain all of the material information which a prospective investor may reasonably require to make an informed investment decision about the Metro Shares, including in relation to the assets and liabilities, financial position and performance, profits and losses and prospects of Metro and its Shares. A Prospectus and two supplementary prospectuses have been prepared for this purpose and the second Supplementary Prospectus is included with this Supplementary Offer Booklet. Please read the Prospectus and the supplementary Prospectuses in full if you are considering accepting the Offer and electing to receive the Cash and Scrip Consideration.

Investment decisions

This Supplementary Offer Booklet does not constitute financial product advice and does not take into consideration your individual investment objectives, financial situation or particular needs. You may wish to seek independent financial and taxation advice before deciding whether or not to accept the Offer for your Gulf Shares. You should be aware that Metro intends to compulsorily acquire any shares not accepted. We refer to section 1.4 of the Supplementary Offer Booklet.

Forward looking statements

This Supplementary Offer Booklet contains certain forward looking statements and statements of current intention. The forward looking statements in this Offer Booklet reflect views held at the Offer Date.

You should be aware that those statements involve inherent risks and uncertainties. Actual events or results may differ materially from the events or results expressed or implied in any forward looking statement and those deviations are both normal and to be expected.

None of Metro, its officers or any person named in this Supplementary Offer Booklet or involved in the preparation of this Supplementary Offer Booklet makes any representation or warranty as to the accuracy or likelihood of fulfilment of any forward looking statement. You should not place undue reliance on those statements.

Risks

Refer to the 'Risk factors' section in the Prospectus for a summary of general and specific risk factors that may affect Metro or its related entities.

Privacy statement

Metro has collected your information from the register of Gulf Shareholders. The Corporations Act permits information to be made available to certain persons, including Metro. Your information may also be disclosed on a confidential basis to Metro's related bodies corporate and external service providers and may be required to be disclosed to regulators such as ASIC. You can contact Metro for details of information held by Metro about you.

Letter from the Chairman

7 December 2016

Dear Gulf Shareholder

Offer to acquire all of your Gulf Shares

On behalf of Metro Mining Limited (Metro), I am pleased to report that on 17 November 2016, the Gulf board determined that Moly Mines Limited (Moly's) increased offer (as announced to the market on 8 November 2016) did not match Metro's Offer as detailed in the Offer Booklet. The Gulf Board unanimously recommended that Gulf Shareholders, in the absence of any superior offer, accept Metro's Offer.

Following negotiation with the Gulf Board, Metro has agreed to increase the Offer Consideration and to extend the Offer Period until 23 December 2016 to ensure that Gulf Shareholders who have not yet accepted Metro's Offer are able to avail themselves of this opportunity.

On 2 December 2016, Metro sighted Acceptance Forms from Gulf Shareholders who collectively hold 57.14% of the shares in Gulf. Those Acceptance Forms were tendered to Gulf's solicitor on an irrevocable basis and will be released on payment of the Cash Consideration or Cash and Scrip Consideration (as applicable). On settlement, Metro will have a relevant interest 98.3% of Gulf Shares on issue. On the basis of those acceptances, Metro determined to waive the Minimum Acceptance Condition, resulting in the Metro Offer becoming unconditional.

All Gulf Shareholders who have previously submitted Acceptance Forms for the Offer, that commenced on 28 October 2016, will be entitled to the increased consideration..

Metro is pleased to present this Supplementary Offer Booklet to formalise the revised terms of its Offer in accordance with section 2.5 of the Offer Booklet.

How to Accept Metro's Offer

To accept Metro's Offer please complete and return the enclosed Acceptance Form.

Please read the Supplementary Offer Booklet and Offer Booklet for more details about the Offer, as well as the attached Supplementary Prospectus and the Prospectus should you wish to receive the Cash and Scrip Consideration.

In the event you have any questions about Metro's Offer, please contact your legal, financial or other professional adviser or Metro's Company Secretary, Scott Waddell, on +61 7 3009 8000 on weekdays between 9.00am and 5.00pm (Brisbane time) or visit the Metro website at www.metromining.com.au.

Yours sincerely

Stephen Everett Chairman Metro Mining Limited

1 Update on the Offer Terms

In accordance with section 2.5 of the Offer Booklet, Metro hereby advises Gulf Shareholders of the following changes and new developments related to the Offer.

1.1 Increased Offer Consideration

On 17 November 2016, the Gulf board determined that Moly's increased offer as announced on 8 November 2016 did not match Metro's Offer and the Gulf Board unanimously recommended that Gulf Shareholders, in the absence of any superior offer, accept Metro's Offer.

Following negotiation with the Gulf Board, Metro's board of directors agreed to change the terms of its Offer by increasing the Cash Consideration from \$0.60 for each Gulf Share to \$0.62 and the cash component of the Cash and Scrip Consideration from \$0.50 cash plus a New Metro Share for each Gulf share you own to \$0.52 plus a New Metro Share for each Gulf share you own. The new Cash and Scrip Consideration represents an implied consideration of \$0.665 (based on the closing price of Metro Shares of \$0.145 on 2 December 2016.

Gulf Shareholders who have already submitted Acceptance Forms with respect to the Metro Offer will be entitled to the increased consideration, as will Gulf Shareholders who have not yet accepted the Offer but who submit Acceptance Forms prior to the Closing Date.

Section 5.2 and Schedule 1, section 2.1 of the Offer Booklet are to be varied to reflect that the increased Offer Price is either:

• (a) \$0.62 cash (Cash Consideration); or
• (b) \$0.52 cash and one Metro Share (Cash and Scrip Consideration),

for each Gulf Share that you own.

The following references in the Offer Booklet are also amended as follows:

(a) Item (4) of the table at section 1.1 of the Offer Booklet should be omitted and replaced with the following:

4.		Attractive Value
Metro		 Availability of all-cash alternative of \$0.62 for each Gulf Share providing certainty of return  Immediate and significant equity upside through a cash and scrip alternative of \$0.52 cash plus 1 Metro share for each Gulf Share  Gulf's own independent expert Grant Thornton has valued Metro's shares (post combination with Gulf) at \$0.20 per share1  The consensus broker valuation for Metro's shares (pre any Metro and Gulf combination benefits) is \$0.232  Metro's Offer exceeds the most recent and highest price paid for Gulf
		Shares

¹ Refer to page 72 of the Independent Expert's Report.

² Based on Morgans report dated 14 July 2016 and Argonaut report 11 July 2016.

		 If all Gulf shareholders elect to receive the Moly 'Cash Only Option' each shareholder will only receive cash of \$0.46 for each Gulf share  The Moly Cash and Share Option, which based on Moly's last share price of \$0.069 before it has suspended from ASX trading in April 2014, will only provide implied value of \$0.54 for each Gulf share
Moly		Moly's 'increased offer' provides no change to the quantum of the  cash consideration but instead simply changes the equity being proposed from unlisted options to shares in a company suspended from ASX trading  Moly has no broker coverage and will remain controlled by Hanlong

• (b) The table at section 1.3 of the Offer Booklet is deleted.
• (c) The definitions of Cash Consideration and Cash and Scrip Consideration in section 6.1 be omitted and replaced with:
• (i) Cash and Scrip Consideration: means \$0.52 cash and one Metro Share for each Gulf Share.
• (ii) Cash Consideration means: \$0.62 cash for each Gulf Share.

1.2 Extension of Offer Period

Metro has determined to extend the Closing Date for the Offer by just under three weeks to enable non-accepting Gulf Shareholders to submit Acceptance Forms.

(a) The table in Section 2.1 of the Offer Booklet should be omitted and replaced with the following:

	Activity	Date
	Date of the Offer	28 October 2016
	Offer closes (end of Offer Period)	23 December 2016A
	Gulf Shareholders who have accepted the Offer receive Cash Consideration or Cash and Scrip Consideration (based on their election)	For Shareholders who submitted Acceptance Forms prior to 5 December 2016 (Early Accepting Shareholders), by 29 December 2016. For Shareholders submitting Acceptance Forms after 5 December 2016 (Late Accepting Shareholders), within 28 days after their
		acceptance of the Offer.
	Expected date for quotation for Metro Shares issued as part of the Cash and Scrip Consideration	Around 4 January 2017 for Early Accepting Shareholders Around 12 January 2017 for Late Accepting ShareholdersB

^A Metro reserves the right to extend the Offer.

^B Gulf Shareholders who do not accept the Offer will have their Gulf Shares acquired if Metro is entitled to give those Gulf Shareholders a Compulsory Acquisition Notice, in that case the Offer Consideration will be provided no later than the times described in section 414 Corporations Act or Part 6A.2 (as the context requires).

This timetable is indicative and subject to change. Subject to the Corporations Act, Metro reserves the right to change these dates. The Offer may be withdrawn by sending a withdrawal document to you, but not generally within one month of the date of the Offer.

(b) The last sentence of section 3.3 of the Offer Booklet should be replaced with the following:

"Acceptances for the Offer must be received before the end of the Offer Period, which is 7.00pm (Sydney time) on 23 December 2016."

(c) The definition of 'Offer Period' in section 6.1 be omitted and replaced with the following:

"Offer Period means the period commencing on the Offer Date and ending at 7.00pm (Sydney time) on 23 December 2016."

(d) Schedule 1, item 3 be amended as follows;

'The Offer will remain open for acceptance from the Offer Date until 7.00pm (Sydney time) on 23 December 2016, unless it is withdrawn or extended.'

1.3 Minimum Acceptance Condition

On 2 December 2016, Metro was advised of receipt of Acceptance Forms from Gulf Shareholders who collectively hold 57.14% of the shares in Gulf. Those Acceptance Forms were tendered to Gulf's solicitor on an irrevocable basis and will be released on payment of the Cash Consideration or Cash and Scrip Consideration (as applicable). On settlement of those acceptances, Metro will hold a relevant interest 98.3% of Gulf Shares on issue. On the basis of those acceptances, Metro waives the Minimum Acceptance Condition. The Offer is now unconditional.

Gulf Shareholders who have already submitted Acceptance Forms will be entitled to the increased consideration by 29 December 2016 (being the date that is 17 business days from waiver of the Minimum Acceptance Condition). Gulf Shareholders who have not yet accepted the Offer but who submit Acceptance Forms prior to the extended Closing Date will receive the Offer Consideration 28 days after their acceptance of the Offer.

(a) Item (5) of the table at section 1.1 of the Offer Booklet should be omitted and replaced as follows:

5.		Capable of Acceptance & Limited Conditionality
Metro		 Metro's Offer is capable of immediate acceptance  Metro's Offer is unconditional as at 2 December 2016, as Metro has waived the Minimum Acceptance Condition  You will receive your consideration within 28 days

		 No formal offer has been made by Moly  Moly's proposed offer is highly conditional and requires approval from FIRB (among others), with some conditions appearing very difficult to satisfy
Moly		 ASX has notified Moly that it will not be re-listed on the official exchange based on the proposed acquisition of Gulf, a condition of Moly's Offer
		Whether Moly can actually make an offer capable of acceptance is  uncertain and reliant on factors outside Moly's control

(b) The first sentence of Section 3.5 of the Offer Booklet should be omitted and replaced with the following:

Should you accept the Offer, Metro will, subject to section 5.2 and 5.4 of the Offer Booklet, provide your preferred form of Offer Consideration no later than 28 days after the later of:

• (i) the Minimum Acceptance Condition being satisfied or waived; and
• (ii) your acceptance of the Offer.

Gulf Shareholders who submitted an Acceptance Form prior to 2 December 2016 will receive their Offer Consideration prior to 29 December 2016.

1.4 Metro intends to Compulsory acquire all remaining Gulf Shares

Metro had previously advised that if it received acceptances from at least 75% of Gulf Shareholders by number (other than Metro) who hold at least 90% of Gulf Shares not held by Metro, then it intends to issue a Compulsory Acquisition Notice to each remaining Gulf Shareholder giving notice that it wishes to acquire their Gulf Shares. As at the date of this Supplementary Offer Booklet, Metro has received acceptances from 63.2% of Gulf Shareholders by number holding 97.2% of Gulf Shares not held by Metro. With the acceptances tendered by 5 December 2016, Metro will hold 98.3% of Gulf Shares. There is an alternative process under Part 6A.2 of the Corporations Act, which will be utilised by Metro in the event it is unable to secure acceptances from at least 75% of Gulf Shareholders by number.

Section 2.3 of the Offer Booklet to the supplemented by adding the following sentence:

"If Metro does not receive sufficient acceptances from Gulf Shareholders to proceed with the process under section 414 of the Corporations Act, Metro intends to compulsorily acquire the remaining Gulf Shares in accordance with the process set out in Part 6A.2 of the Corporations Act."

2 Additional Information

2.1 Loan facility

As disclosed in the Offer Booklet, Metro has, in conjunction with its Offer, made an offer to Gulf to provide it with an unsecured loan facility for \$1.9 million on similar, or substantially similar, terms to the loan facility provided by Moly. That facility was to be made available to Gulf upon satisfaction of the Minimum Acceptance Condition. Since the Offer Date, in response to the announcement that Moly had increased the Gulf loan facility by an additional \$1 million, Metro determined to match the \$2.9 million commitment of Moly.

Section 5.3 of the Offer Booklet is to be varied as follows:

"In conjunction with its Offer, Metro has also made an offer to Gulf to provide it with an unsecured loan facility for \$2.9 million on similar, or substantially similar, terms to the loan facility provided by Moly. The loan agreement is to be entered into by Metro and Gulf no later than 15 December 2016. Funds advanced under the loan will be used to repay the Moly loan to Gulf and may also be used for working capital and other purposes approved by Metro."

2.2 Dissenting Gulf Shareholders

Section 5.2 of Schedule 1 be amended as follows:

"If you are a dissenting shareholder for the purposes of section 414 Corporations Act and your Gulf Shares are acquired by Metro under that section, you will receive your Offer Consideration in accordance with the process and timeframes required of that section. If Metro is unable to rely on the process in section 414 of the Corporations Act and your Gulf Shares are acquired by Metro under Part 6A.2 of the Corporations Act, you will receive your Offer Consideration in accordance with the process and timeframes in that part."

Annexure A

Revised Acceptance Form

	Acceptance Form
A	Your name and address	Your holding
		Gulf Shares held as at the Offer Date
		If your holding has changed between the Offer Date and time of acceptance, then write your current holding here and initial your amendments. Your acceptance will in any event apply in respect of the number of Gulf Shares that
		you specify below. This is an important document. If you are in doubt as to how to complete this Acceptance Form, please consult your financial or other professional adviser immediately.
	Transfer and Acceptance Form
	before completing this form. Capitalised words used in this form have the meanings given to them in the Offer Booklet.	This is a personalised form for the sole use of the holder and holding recorded above. Use this form to accept the Offer by Metro for any or all of your Gulf Shares. You should read the entire Offer Booklet (and, if you intend to elect to receive the Cash and Scrip Consideration, the entire Prospectus) carefully
B	You must return your Acceptance Form to accept the Offer
	by: (a) mail or hand delivery to the mailing address shown overleaf; or (b) email to the email address shown overleaf.	If you correctly sign and return this form you will be deemed to have accepted the Offer in respect of the number of Gulf Shares that you specify below, on the Offer Terms. To be an effective acceptance, your form must be received by Metro by the end of the Offer Period which is 7.00pm (Sydney time) on 23 December 2016 (unless extended). To accept the Offer you must sign and return this Acceptance Form, along with any other documentation required
C	Contact details
	Please provide your contact name and telephone number in case we need to speak to you about this Acceptance Form.
	Telephone number where you can be contacted during business hours	Contact name
	( )
D	Election of the Offer Consideration you wish to receive for your Gulf Shares
	You may make an election, in respect of all Gulf Shares indicated below, to receive either the (please select only one option):
	Cash Consideration - \$0.62 cash for each Gulf Share that you hold; or
	Cash and Scrip Consideration - \$0.52 cash and one Metro Shares for each Gulf Share that you hold Forms for this purpose. If you do not make a valid election, you will be deemed to have elected to receive the Cash and Scrip Consideration.	You may only elect to receive one type of Offer Consideration in respect of all of your Gulf Shares, unless you hold two or more parcels of Gulf Shares as nominee or trustee for, or otherwise on account of, another person, in which case you may separate elections in relation to each of those parcels of Gulf Shares by duly completing and lodging separate Acceptance Forms in respect of the separate parcels. Please contact Metro to obtain additional Acceptance
D	You must specify the number of Gulf Shares you wish to accept the Offer in respect of
	number of Gulf Shares that you so specify, or if nothing is specified you will be deemed to have accepted in respect of all of your Gulf Shares.	You can accept the Offer in respect of all of your Gulf Shares, or in respect of only some of your Gulf Shares. Please specify the total number of Gulf Shares you hold, as well as number of Gulf Shares that you wish to accept the Offer in respect of. You will be deemed to have accepted the Offer in respect of the
	Your total holding	The number of Gulf Shares you are accepting the Offer for
E	You must check the box applicable to you
	If you have your share certificate in respect of the Gulf Shares that you are accepting the Offer in respect of, you must provide this to Metro upon your required to give a statutory declaration to that effect, as required by Metro.	acceptance of the Offer. If you do not have your share certificate in respect of the Gulf Shares that you are accepting the Offer in respect of, you may be
	I/We, the person(s) named above, are in possession of the share certificate in respect of my/our Gulf Shares for which the Offer is being accepted, which is being provided to Metro upon my/our acceptance of the Offer.	I/We, the person(s) named above, are not in possession of the share certificate in respect of my/our Gulf Shares for which the Offer is being accepted, and confirm it has either been lost, or was never issued to me/us by Gulf, and I hereby authorise Metro to make those representations to Gulf on my/our behalf and seek the issue of a replacement share certificate.
F	You must sign this form for your instructions in this Acceptance Form to be executed
	I/we declare that all details and statements made by me/us are complete and accurate.	I/We, the person(s) named above, accept the Offer in respect of the Gulf Shares I/we have specified above and hereby agree to transfer to Metro all my/our Gulf Shares for the consideration specified in the Offer, and on the terms and conditions of the Offer as set out in the Offer Booklet. By submitting this form
	Shareholder 1 (Individual) Shareholder 2 (Individual)	Shareholder 3 (Individual)
	Sole Director and Sole Company Secretary Director	Secretary/Director (delete one)
	The directors of Metro reserve the right to make amendments to this form where appropriate.

Further important instructions

To accept the Offer, you must complete and return this Acceptance Form in accordance with the instructions in this Acceptance Form.

For further information please refer to the Offer Booklet dated 28 October 2016 and the Supplementary Offer Booklet which accompanies this Acceptance Form. Capitalised terms used in this form have the same meanings given to them in the Offer Booklet.

By submitting this form, you agree to accept the Offer on the Offer Terms set out in the Offer Booklet as amended by the Supplementary Offer Booklet.

Completion instructions

• A Please check the front page to ensure that your name and address are correct. If any of these details are incorrect, please write in your correct details and initial the amendments that you make.
• Please note your consideration will be issued in the name(s) exactly as stated on the Gulf share register.
• B Please sign this Acceptance Form in the places for signature(s) set out on the front page and in accordance with the following instructions:
• (a) Joint Shareholders: If your Gulf Shares are held in the names of more than one person, all those persons must sign this Acceptance Form.
• (b) Corporations: This Acceptance Form must be signed by either two directors or a director and a company secretary. Alternatively, where the company has a sole director and, pursuant to the Corporations Act, there is no company secretary, or where the sole director is also the sole company secretary, that director may sign alone. Alternatively, a duly appointed attorney may sign.
• (c) Powers of attorney: If this Acceptance Form is signed under a power of attorney, please attach a certified copy of the power of attorney to this Acceptance Form when you return it. If this Acceptance Form is signed under Power of Attorney, the attorney declares that he/she has no notice of revocation of the Power of Attorney.
• (d) Deceased Estates: All the executors and administrators must sign this Acceptance Form. When you return this Acceptance Form, please attach it to a certified copy of probate, letters of administration or certificate of grant accompanied (where required by law for the purpose of transfer) by a certificate of payment of death or succession duties and (if necessary) a statement in terms of section 1071B(9)(b)(iii) of the Corporations Act.

Information you supply on this Acceptance Form will be used by Metro for the primary purpose of processing your acceptance of the Offer and to provide you with the consideration payable under the Offer. This information may be disclosed to Metro's professional advisers, printing and mailing providers and other third parties in connection with the Offer. If you fail to supply this information, your acceptance may not be processed and you may not receive the consideration payable under the Offer. You have rights to obtain access to the personal information which you have supplied in connection with the Offer.

Lodgment instructions

Brisbane QLD 4000

Mail, deliver or email the completed Acceptance Form(s) and any other documents required by the above instructions to:

Delivery address or Email address

Metro Mining Limited	Scan or photograph and send a copy of the completed
(Gulf Alumina Limited Offer)	Acceptance Form, along with other required documentation, to:
PO Box 10955 Adelaide Street	swaddell@metromining.com.au

A reply paid envelope is enclosed for use within Australia.

Your acceptance must be received by no later than the end of the Offer Period, which is 7.00pm (Sydney time) on 23 December 2016.

If you have any questions about the terms of the Offer or how to accept, please call Metro's Company Secretary on + 61 7 3009 8000 between 9.00am and 5.00pm (Brisbane time).

Supplementary prospectus

Metro Mining Limited

Important information

This supplementary prospectus (Supplementary Prospectus) is dated 7 December 2016 and is intended to supplement and amend the information contained in the prospectus of Metro Mining Limited ACN 117 763 443 (Metro) dated 28 October 2016 (Prospectus) and the supplementary prospectus of Metro dated 11 November 2016 (First Supplementary Prospectus). Unless otherwise indicated, terms defined and used in the Prospectus have the same meaning in this Supplementary Prospectus.

This Supplementary Prospectus was lodged with ASIC and ASX on 7 December 2016. Neither ASIC nor the ASX take any responsibility for the contents of this Supplementary Prospectus.

This Supplementary Prospectus must be read together with the Prospectus and the First Supplementary Prospectus. To the extent of any inconsistency between this Supplementary Prospectus and the Prospectus and First Supplementary Prospectus, this Supplementary Prospectus will prevail.

The Company has issued both a printed and electronic version of this Supplementary Prospectus, the Prospectus and the First Supplementary Prospectus. Electronic versions of both are available at www.metromining.com.au/investor-media-centre/announcements.

The Prospectus and both Supplementary Prospectuses are important and should both be read in their entirety. Please consult you legal, financial or other professional adviser if you do not fully understand the contents of these documents.

This Supplementary Prospectus contains particular changes to the Prospectus. Other than the changes set out below, all other information in the Prospectus remains unchanged.

$\mathbf{1}$ Changes to the Offer

$1.1$ Changes to the Offer

On 17 November 2016, the Gulf board determined that Moly Mines Limited (Moly's) increased offer (as announced to the market on 2 November 2016) did not match Metro's Offer and unanimously recommended that Gulf Shareholders, in the absence of any superior offer, accept Metro's Offer.

Metro's board of directors agreed on 2 December 2016 to change the terms of its Offer by increasing the Cash Consideration from \$0.60 for each Gulf Share to \$0.62 and the cash component of the Cash and Scrip Consideration from \$0.50 cash plus a New Metro Share for each Gulf share you own to \$0.52 plus a New Metro Share for each Gulf share you own. The new Cash and Scrip Consideration represents an implied consideration of \$0.665 (based on the closing price of Metro Shares of \$0.145 on 2 December 2016).

Gulf Shareholders who have already submitted Acceptance Forms with respect to the Offer will be entitled to the increased consideration, as will Gulf Shareholders who have not yet accepted the Offer but who submit Acceptance Forms prior to the Closing Date.

The table in section 1.1 of the Prospectus is deleted in full and replaced with the following:

Terms of offer	Details
Offer Consideration per Gulf Share	\$0.52 cash and one New Metro Share per Gulf Share
New Metro Shares offered under this Prospectus	Up to 55,214,321#
Total number of Metro Shares on issue following the Offer	Up to 581,927,349#

Assumes Metro acquires 100% of Gulf, all Gulf Shareholders elect to receive Cash and Scrip Consideration and all Gulf Options on issue at the date of the Offer are exercised and the holders accept the Offer and elect to receive Cash and Scrip Consideration.

The second row of the table in section 1.4 of the Prospectus 'Questions and answers' is deleted in full and replaced with the following:

What is the Offer

Under the terms of the Offer Booklet, Gulf Shareholders may choose to receive either:

(a) \$0.62 cash per Gulf Share; or (b) \$0.52 cash and one New Metro Share per Gulf Share. However, this Prospectus is only relevant to those Gulf Shareholders who elect to receive Metro's offer of \$0.52 cash and one new Metro Share per Gulf Share. This represents implied consideration of \$0.665 (based on the closing price of Metro Shares on 2 December 2016), allowing Gulf Shareholders to realise a portion of their investment in Gulf, while sharing in the potential upside of the estimated synergies to be obtained should Metro gain control of Gulf and be able to execute its strategy of combining the two companies' highly complementary projects. Further information about the estimated synergies and benefits of accepting the Offer is set out in section 1.2 of the Offer Booklet. The terms of the Offer are outlined in detail in the Offer Booklet and the amendments to the terms are set out in the Supplementary Offer Booklet.

The Pro-forma Statement of Financial Position has been updated to reflect the increased consideration payable under the Offer as described in section 1.5 of this Supplementary Prospectus.

$1.2$ Satisfaction of Minimum Acceptance Condition

On 2 December 2016, Metro was advised of receipt of Acceptance Forms from Gulf Shareholders who collectively hold 57.14% of the shares in Gulf. Those Acceptance Forms were tendered to Gulf's solicitor on an irrevocable basis and will be released on payment of the Cash Consideration or Cash and Scrip Consideration (as applicable). On settlement, Metro will hold a relevant interest 98.3% of Gulf Shares on issue (which also includes acceptances received in addition to the 57.14%). On the basis of those acceptances, Metro waives the Minimum Acceptance Condition. The Offer is now unconditional.

$1.3$ Extension of Closing Date

Metro has extended the Closing Date of the Offer to 23 December 2016. Gulf Shareholders who have not yet accepted the Offer may still accept the Offer prior to the 7.00pm (Sydney time) on 23 December 2016.

Loan to Gulf $1.4$

As disclosed in the First Supplementary Prospectus, subsequent to the lodgement of the first Prospectus on 28 October 2016, Metro determined to match the \$2.9 million commitment of Moly under Moly's loan agreement with Gulf. Metro will enter into a Loan Agreement with Gulf by 15 December 2016 to document the terms of that loan. Funds advanced under the loan will be used to repay the Moly loan to Gulf and may also be used for working capital and other purposes approved by Metro.

Pro Forma Statement of Financial Position $1.5$

The Pro Forma Statement of Financial Position and notes in section 4.3 of the Prospectus from the subheading 'Pro Forma Statement of Financial Position' is deleted in full and replaced with the following:

Pro Forma Statement of Financial Position

The Pro Forma Statement of Financial Position of the Merged Group as at 30 June 2016 is set out below.

Scenario 1 has been prepared on the assumption that all Gulf Shareholders who accept the Offer elect to receive the Cash Consideration.

Scenario 2 has been prepared on the assumption that all Gulf Shareholders who accept the Offer elect to receive the Cash and Scrip Consideration.

Each scenario assumes that Metro holds 100% of all Gulf Shares respectively.

Pro Forma Statement of Financial Position
As at 30 June 2016

ORITIN MINING

	Extracted from 2016 Annual Reports		Scenario 1-100% Cash Consideration	Scenario 2 - 100% Cash & Scrip Consideration
	Metro Mining Limited consolidated entity s Metro Mi	Gulf Alumina Limited Consolidated entity *	Pro Forma* (100%) Combined Company	Pro Forma* (100%) Combined Company
Current assets Assets
Cash and cash equivalents	2,684,309	317,650	10,872,974	10,872,974
Trade and other receivables	361,205	90,117	451,322	451,322
Other assets	6,161	39,306	45,467	45,467
Total current assets	3,051,675	447,073	11,369,763	11,369,763
Non-current assets
Property, plant and equipment	10,344	187,030	197,374	197,374
Available for sale investments	3,975,733
Exploration and evaluation assets	10,586,825	11,567,209	65,023,072	65,023,072
Goodwill			2,107,713	4,570,779
Other assets	7,560	757,700	765,260	765,260
Total non-current assets	14,580,462	12,511,939	68,093,419	70,556,485
Total assets	17,632,137	12,959,012	79,463,182	81,926,248
Liabilities
Current liabilities
Trade and other payables	1,115,388	656,033	6,254,104	6,254,104
Employee benefits	85,848		85,848	85,848
Interest bearing liabilities		364,833	45,700,406	40,226,926
Total current liabilities	1,201,236	1,020,866	52,040,358	46,566,878
Total liabilities	1,201,236	1,020,866	52,040,358	46,566,878
Net assets	16,430,901	11,938,146	27,422,824	35,359,370
Equity
Contributed equity	56,105,993	10,342,766	64,488,289	72,424,835
Reserves	3,734,767	494,396	3,734,767	3,734,767
Accumulated profit (losses)	(43,409,859)	1,100,984	(40,800,232)	(40,800,232)
Non-controlling interests
Total equity	16,430,901	11,938,146	27,422,824	35,359,370

Supplementary Prospectus - Metro Mining Limited $\overline{a}$ 42341733v1

$\overline{a}$

# Prior to adjustments

* After adjustment

Notes:

• The actual Statement of Financial Position of the Merged Group will be different from the Pro Forma Statement $(a)$ of Financial Position above. Consolidation adjustments that will be necessary to comply with AASB 3 'Business Combinations' have not yet been determined.
• The consolidated Pro Forma Statement of Financial Position has been prepared from the Statements of $(b)$ Financial Position of Metro and Gulf as at 30 June 2016.
• $(c)$ Adjustments have been made to the 'Combined Company Pro Forma (after adjustment)' columns in respect of the following:
• $(i)$ Metro raised \$8.9 million through a placement with Greenstone Management (Delaware) II LLC in its capacity as general partner of Greenstone Metro Holdings LP (Greenstone) in the third quarter of 2016. Metro's cash was increased by \$8.3 million after allowing for \$0.6 million in fund raising costs.
• $(ii)$ Metro acquired a further 17% interest in Gulf in the third quarter of 2016. The cost of the acquisition was \$8.7 million and this was funded through an unsecured loan of \$8.5 million, repayable within 6 months.
• $(iii)$ Metro has adjusted its cash position and accumulated losses for its expenditures in the third quarter of 2016.
• $(iv)$ Gulf's cash position and current interest bearing liabilities have been increased by \$2.9 million, reflecting the short term loan from Moly Mines Limited (Moly) (referred to in Moly's announcement to the market dated 27 October 2016).
• $(d)$ No other adjustment has been made for Gulf post 30 June 2016 in respect of other changes including the following:
• expenditure and other income post 30 June 2016 has not been accounted for in the Pro Forma $(i)$ Statement of Financial Position: or
• $(ii)$ other changes that Metro is not aware of.
• The cash balance of the Merged Group would be less than the amount stated in the Pro Forma Statement of $(e)$ Financial Position due to expenditure undertaken post 30 June 2016.
• The Payables includes an estimate of stamp duty payable to the Queensland Government as well as transaction $(f)$ and other costs expected if the Offer is successful.
• $(q)$ As set out in section 5.10 of the Offer Booklet and section 5.7 of this Prospectus, stamp duty may be payable and has been included in the Pro Forma Statement of Financial Position. The stamp duty liability is based on the estimated market value of Gulf's landholdings being \$52,950,568. Please note these values are estimations only. At or around the date of the transaction an independent valuation will be obtained for duty purposes. As the assumption of an AASB 3 'Business Combinations' has been made, the stamp duty has been expensed and is shown in accumulated profit (losses).
• $(h)$ Goodwill has been calculated based on the number of New Metro Shares issued multiplied by the difference between the value of the Cash Consideration (being \$0.62 per Gulf share) and the value of the Cash and Scrip Consideration (calculated as \$0.665 based on the closing price of Metro shares on the date of the increase of offer 2 December 2016).

$\overline{\mathbf{2}}$ Additional amendments

Continuous reporting and disclosure obligations $2.1$

The table of announcements since 28 October 2016 be updated to include the following at the end of section 9.1 of the Prospectus:

Date	Announcement title
28 October 2016	Sept Quarter 2016 - Quarterly Activities & Cash Flow Report
28 October 2016	MMI Offer to Gulf Alumina Shareholders
02 November 2016	Metro's Offer for Gulf Alumina confirmed as Superior
9 November 2016	New Highly Conditional Proposal from Moly Mines to Gulf Alumina
17 November 2016	Gulf Board Recommends Metro's Offer
22 November 2016	AGM Chairman and CEO's Address
23 November 2016	Results of AGM
29 November 2016	Updated on Moly Mines Offer to Gulf Alumina
5 December 2016	Metro Offer for Gulf Improved and Unconditional
6 December 2016	Appendix 3B

$2.2$ Correction of typographical errors

The reference to "McCullough Robertson Lawyers" in the last sentence of section 9.6 in the Prospectus be omitted and replaced with "BDO".

$2.3$ Correction of definitions

The definition of 'Cash and Scrip Consideration' in the Glossary be deleted and replaced with:

Cash and Scrip Consideration	means \$0.52 cash and one New Metro Share per Gulf Share.

$\overline{\mathbf{3}}$ Authorisation

This Supplementary Prospectus is issued by Metro. In accordance with section 720 of the Corporations Act 2001 (Cth), each Director has consented to the lodgement of this Supplementary Prospectus with ASIC and has not withdrawn that consent prior to lodgement.

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Scott Waddell Company Secretary Metro Mining Limited