METRO MINING LIMITED — Merger & Acquisition 2014

Mar 26, 2014

HopgoodGanim

27 March 2014

Australian Securities Exchange Company Announcement Platform By facsimile: 1300 135 638

Our Ref: 1464247 - Katherine Hammond

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Dear Sir/Madam

MetroCoal Limited ACN 117 763 443 - On-Market Takeover Bid for Cape Alumina Limited ACN 107 817 694 - Supplementary Bidder's Statement

We are the solicitors for MetroCoal Limited ACN 117 763 443 (Company).

On 18 March 2014 the Company lodged its bidder's statement (Bidder's Statement) for an on-market takeover bid for all of the fully paid ordinary shares in Cape Alumina Limited ACN 107 817 694 (Cape or Target) which the Company is not already entitled to under Part 6.5 of the Corporations Act 2001 (Cth) (Corporations Act) (Takeover Bid).

On 26 March 2014 the Company acquired 95,059,489 Cape shares on-market (Acquisition) which caused its relevant interest in Cape to increase from 6.87% to 46.04%. Accordingly the Company lodged, with ASX and Cape, an ASIC Form 604: Notice of Change in Substantial Holding in respect of its shareholding in Cape.

Please find attached, in accordance with section 647 of the Corporations Act, a supplementary bidder's statement (First Supplementary Bidder's Statement) prepared by the Company to:

• Update the details in the Bidder's Statement regarding the Company's current relevant interest and voting power in Cape, as a result of the significant change arising from the Acquisition; and
• Correct the "Offer Date" and "date that the Offer Period commences", by $2¹$ changing such dates from 3 April 2014 to 2 April 2014, to be in accordance with the requirements of the Corporations Act.

Yours faithfully

Hoppodganin 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 ON MARKET CASH OFFER FOR CAPE ALUMINA LIMITED ACN 107 817 694

$1₁$ INTRODUCTION

This document is a Supplementary Bidder's Statement under section 643 of the Corporations Act 2001 (Cth) dated 27 March 2014 (First Supplementary Bidder's Statement). It is the first Supplementary Bidder's Statement issued by MetroCoal Limited ACN 117 763 443 (MetroCoal) in relation to its on-market offer (Offer) for all of the fully paid ordinary shares that it is not entitled to in Cape Alumina Limited ACN 107 817 694 (Cape).

This document supplements, and should be read together with, the Bidder's Statement lodged with the Australian Securities and Investments Commission (ASIC) on 18 March 2014 (the Bidder's Statement). To the extent of any inconsistency between the Bidder's Statement and the First Supplementary Bidder's Statement, the First Supplementary Bidder's Statement shall prevail.

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.

Words defined in the Bidder's Statement have the same meaning in this First Supplementary Bidder's Statement, unless the context requires otherwise. The definitions and interpretation set out in Section 11 of the Bidder's Statement also apply to this document, unless the context requires otherwise.

$2.$ AMENDMENTS TO BIDDER'S STATEMENT

The Bidder's Statement is amended as set out below.

$2.1$ Important Dates: Offer Date and Offer Period commencement date

The "Date of the Offer" or "Offer Date" is amended from 3 April 2014 to 2 April 2014. This amendment applies to all instances in the Bidder's Statement and the ASX Announcement of the Offer made by MetroCoal's Broker for the Offer on 18 March 2014 (Announcement), where the "Date of the Offer" or "Offer Date" is stated or referred to.

The date that the Offer Period commences is amended from 3 April 2014 (10.00 am Sydney time) to 2 April 2014 (10.00am Sydney time). This amendment applies to all instances in the Bidder's Statement and the Announcement, where the date that the Offer Period commences is stated or referred to.

$2.2$ Bidder's Relevant Interest

On 26 March 2014, MetroCoal acquired 95,059,489 Cape Shares by an on-market transaction (Acquisition).

Consequently, MetroCoal's relevant interest in Cape Shares increased from 16,666,667 to 111,726,156 Cape Shares and MetroCoal's voting power increased from 6.87% to 46.04%.

Section 6.6 of the Bidder's Statement sets out the interests of MetroCoal in Cape. Accordingly, section 6.6 of the Bidder's Statement is amended by replacing it with the following:

"6.6 Interests of MetroCoal

Relevant interests in MetroCoal Shares $(a)$

As at 27 March 2014 (being the date of the First Supplementary Bidder's Statement), Metrocoal had a relevant interest in 111,726,156 Cape Shares.

$(b)$ Voting power in Cape

As at 27 March 2014 (being the date of the First Supplementary Bidder's Statement), the voting power of MetroCoal in Cape was 46.04%."

$2.3$ Maximum consideration payable

As a consequence of the Acquisition, the number of Cape Shares that MetroCoal is not already entitled to and therefore subject to the Offer decreased from 225,981,731 to 130,922,242 Cape Shares.

Section 8.2 of the Bidder's Statement sets out the maximum consideration that would be payable by MetroCoal if the Offer is accepted by all Shareholders. Accordingly, section 8.2 is to be amended by replacing it with the following:

"8.2 Maximum consideration payable

The maximum amount of cash which would be payable by MetroCoal under the Offer if acceptances are received for all Cape Shares on issue as at 27 March 2014 (being the date of the First Supplementary Bidder's Statement) (assuming that none of the Options are exercised) is approximately \$785,534 (i.e. 130,922,242 x 0.6 cent) plus brokerage.

If the holder of all 14,706,000 Options exercises those Options and accepts the Offer in respect of all Shares issued to that holder, an additional amount of approximately \$88,236 will be payable by MetroCoal under the Offer. However as the exercise price for the Options is \$0.17 per Option, which is significantly above the Offer Price, MetroCoal considers it highly unlikely that any of the Options will be exercised prior to the end of the Offer Period. Accordingly MetroCoal considers that it is unlikely that any additional cash will be required to acquire Shares which may be issued on conversion of the Options.

If all of the Performance Rights vest (and convert into Shares) and the holder(s) accept the Offer in respect of all Shares issued to them on vesting and conversion, an additional amount of \$19,866 (3,310,973 x 0.6 cent) will be payable by MetroCoal under the Offer.

The total cash consideration payable by MetroCoal as described in this section excludes any brokerage payable by MetroCoal to Wilson HTM."

$3_l$ LODGEMENT WITH ASIC

A copy of this document was lodged with ASIC on 27 March 2014. Neither ASIC nor any of its officers takes any responsibility for the contents of this document.

AUTHORISATION 4.

This document has been approved by a resolution passed by the directors of the Bidder.

Dated 27 March 2014.

Signed for and on behalf of MetroCoal Limited

Michael Hansel, Director