METRO MINING LIMITED — Merger & Acquisition 2014

Aug 26, 2014

27 August 2014

Australian Securities Exchange Company Announcement Platform

By facsimile: 1300 135 638

1486646 - Katherine Hammond Our Ref:

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Dear Sir/Madam

MetroCoal Limited - off-market takeover bid for Cape Alumina Limited - Supplementary Bidder's Statement

We are the solicitors for MetroCoal Limited (MetroCoal).

In accordance with section 647(3) of the Corporations Act 2001 (Cth), we attach a copy of MetroCoal's supplementary bidder's statement dated 27 August 2014 (Supplementary Bidder's Statement) to its bidder's statement dated 19 August 2014 (Bidder's Statement).

A copy of the Supplementary Bidder's Statement will today be lodged with the Australian Securities and Investments Commission and served on Cape Alumina Limited, and will be sent with the Bidder's Statement to Cape Alumina Limited shareholders on 2 September 2014.

Yours faithfully

HopgoodGanim

Contact Katherine Hammond Associate T 07 3024 0343 F 07 3024 0043

E k.hammond@hopgoodganim.com.au

Partner responsible: Michael Hansel

BRISBANE

Level 8, Waterfront Place 1 Eagle Street Brisbane Qld 4000 Australia

PO Box 7822, Waterfront Place Brisbane Qld 4001 Australia

ABN: 54 105 489 661

BRISBANE

T +61 7 3024 0000 F +61 7 3024 0300

PERTH

T +61892118111 F +61892261696

www.hopgoodganim.com.au

Supplementary Bidder's Statement

by MetroCoal Limited ACN 117 763 443 in relation to its Off-Market Takeover Offers for Cape Alumina Limited ACN 107 817 694

$\mathbf{1}$ . Introduction

This document is a Supplementary Bidder's Statement under section 643 of the Corporations Act 2001 (Cth) dated 27 August 2014 (Supplementary Bidder's Statement). It is the first Supplementary Bidder's Statement issued by MetroCoal Limited ACN 117 763 443 (MetroCoal or Bidder), in relation to its off-market takeover offers (Offer) for all of the fully paid ordinary shares in Cape Alumina Limited ACN 107 817 694 (Cape or Target).

This document supplements, and should be read together with, the Bidder's Statement lodged with the Australian Securities and Investments Commission (ASIC) on 19 August 2014 (Bidder's Statement).

This is an important document and requires your immediate attention. If you are in any doubt as to how to deal with this document you should consult your financial or legal adviser as soon as possible.

Capitalised terms which are not defined in this Supplementary Bidder's Statement have the meaning given to those terms in the Bidder's Statement and the definitions and interpretation set out in Section 14 of the Bidder's Statement also applies to this document, unless the context otherwise requires.

$2.$ MetroCoal loan to Cape

$\overline{1}$

On 27 August 2014 MetroCoal and Cape entered into an agreement for a loan of funds from MetroCoal to Cape (Loan Agreement). The purpose of this Supplementary Bidder's Statement is to provide disclosure to Cape shareholders regarding the Loan Agreement.

$2.1$ Material terms of the Loan Agreement

Under the Loan Agreement, MetroCoal has agreed to loan Cape funds on the following terms:

Term	Loan Amount	Details \$250,000.
2.	Approved Purpose (for use of Loan Amount)	The development of Cape's Bauxite Hills project.
З.	Interest	10% per annum, calculated daily and payable on repayment of the Loan Amount.
4.	Repayment	The Loan Amount must be repaid by the earlier of:
		12 months after the close of the Offer; or $\bullet$
		21 days after Cape has raised \$1 million (or more) of capital through the issue of marketable securities by Cape; or
		Immediately in certain of the prescribed circumstances

-2-

TI,m
		where the Company enters into 89 ag,Nement for further indebtednese with MetoCoal's consent	1
5.	Events of default i	Any monles owing wil be Immedhinly due end payable If an event of default occurs, where such events se st=ldard for an agreement of this Idnd.
8.	Effect of Loan on Defeating Condmons of Offer	The pardes hie agreed that If the executon or operauon of the Loan Nreement constltutes an occurrence or non-fulllIment of any Defeating Conditions by Cape, MetroCoal Wa O6 its rights with regards to the benefit of the devant Deleathg Condition only to the extent affected by the Loan Agreement
7.	No other Indebtedn,68 or enc Ibince	Cape has agreed not to incur, without MetroCoars consent (where MetroCoal has agreed that It will provide consent In prescrR,ed drcrsnstances), any other Indebtedness or creale or allow any encumbrance over any property owned by It
8.	Security	The Loan Amount ie unsecured.

MdroCoN company secret,V

A further purpose of this Supplemen ry Bidders Statement Is to correct an error In the Bidder's Statement regsding the Identity of Company Secreta g of MetroCoa l.

Section 6.3 (Directors of MetroCoal) of the Bidder's St,tement At= that the Company Secr*fy: Mr Scott Waddelr. However, Mr John Haley (an alt,mate DIrector) ¹⁸ also a company secretary of MetroCoel.

Ac rdlngly, the Bidder's Stsbement Is corrected by delethg the eddng text Id Inseing the new text as set out In the mble below:

	Ex'Ung taxt
5.3	The Company Secretary Is Mr Scott Waddell.	Mr Scott Waddell and Mr John Haley -. are the c¢>Compily Secr*lies -
5.3	Mr John Haley - Alternate DIredor	Mr John Haley - Anernate Director id co-Comp=ly Secniary
5.3	Mr Scoe Waddel - Company Secretary / CFO	Mr Scott Waddell -co-Company Secretiry / CFO

Lodgement with ASIC 4.

A copy of this document was lodged with ASIC on 27 August 2014. This document will prevail to the e,dan of any InconsNency with the Bidder's Stn#Arner,L Neither ASIC nor anyof Its ofhre takes any responelblky for be conterM of 91Is document

5. Authorisition

Thls document has been approved by a unaninlous resoluton passed by the directors of the Bidder.

Dated 27 August 2014 Signed for on *»'ti of MetroCoal Umlbed ACN 117 763 443

Andrew Gillies Director