MRG METALS LIMITED — Capital/Financing Update 2011

Aug 21, 2011

==> picture [153 x 105] intentionally omitted <==

OPTIONS PROSPECTUS

MRG METALS LIMITED

For a non-renounceable entitlements issue of approximately 44,058,000 Options on the basis of 1 Option for every 2 Shares held by Shareholders as at 7.00pm (AEST) 30th of August 2011 at an issue price of 1 cent per Option to raise up to $440,580.00.

12Th AUGUST 2011

IMPORTANT INFORMATION

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act 2001 in that it incorporates by reference certain information contained in documents previously lodged with the Australian Securities and Investments Commission. This Prospectus should be read in its entirety. If you have any queries about the securities offered under this Prospectus you should consult your professional advisor or stockbroker.

AN INVESTMENT IN THE COMPANY’S SECURITIES SHOULD BE CONSIDERED SPECULATIVE This Prospectus is an important document and should be read in its entirety. If after reading this Prospectus you have any questions about the securities being offered for subscription under the Prospectus, then you should consult your professional advisor.

The shares offered pursuant to this Prospectus should be considered speculative.

CONTENTS

Section	1	Corporate Directory	3
Section	2	Chairman’s Letter	4
Section	3	Timetable and Important Dates	5
Section	4	Details of Offer	6
Section	5	Information deemed to be
		Incorporated in this Prospectus	9
Section	6	CompanyOverview	10
Section	7	Effect of the Offer on the Company	11
Section	8	Terms and Conditions of Options
		and Rights AttachingTo Shares	12
Section	9	Additional Information	13
Section	10	Material Contracts	14
Section	11	Consents	14
Section	12	Authorityof Directors	14
Section	13	Defnitions	15

IMPORTANT INfORMATION

This Prospectus is dated 12th of August, 2011 and was lodged with ASIC on that date. No Options will be issued on the basis of this Prospectus later than thirteen (13) months after the date of this Prospectus. Application will be made within seven (7) days after the date of this Prospectus for permission for Options offered by this Prospectus to be listed for Quotation.

No person is authorised to give information or make any representation in connection with this Prospectus which is not contained in this Prospectus. Applicants should read this document in its entirety and, if in any doubt, consult with their professional advisors before deciding whether to apply for Options. There are risks associated with an investment in MRG Metals Limited and the Options offered under this Prospectus should be regarded as a speculative investment. The Options offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the future value of the Options. Certain abbreviations and other defined terms are used throughout this Prospectus. Defined terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations used are set out in Section 13 of this Prospectus.

ShORT fORM PROSPECTUS

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act 2001 in that it generally incorporates by reference information contained in a document that has been previously lodged with the ASIC. Please refer to the prospectus dated 5 April 2011 for the offer of 12,250,000 Shares at an issue price of 20 cents each to raise a total of $2,500,000.00 (IPO Prospectus).

In referring to the IPO Prospectus, MRG:

• (a) identifies the IPO Prospectus as being relevant to the offer of the Options under this Prospectus and containing information that will provide investors and their professional advisers information to assist them in making an informed assessment of:

• (i) the rights and liabilities attaching to:

  • (a) the Options; and

  • (b) the underlying securities

• (ii) the capacity of MRG to issue the underlying securities; and

• (iii) the assets and liabilities, financial position and performance, profits and losses and prospects of MRG;

• (b) refers investors and their professional advisers to Section 5 of this Prospectus which summarises the information in the IPO Prospectus deemed to be incorporated in this Prospectus;

• (c) informs investors and their professional advisers that they are able to obtain, free of charge, a copy of the IPO Prospectus (or this Prospectus) by either emailing or writing to MRG at its registered office during normal business hours during the Offer Period, or by visiting the MRG website at www.mrgmetals.com.au; and

• (d) advises that the information in the IPO Prospectus will be primarily of interest to investors and their professional advisers.

MRG Metals Limited / Options Prospectus

2

COrPOrATE dirECTOry SECTION 1. CORPORATE DIRECTORy

AlbErT PiETrzAk

Position: Non Executive Chairman

Qualifications: BA Mechanical Engineering

Experience: Albert is an investor, fully qualified IFR pilot and has 33 years experience as Managing Director of an engineering company, manufacturing O.E. components for the automotive industry. In this role, he was involved in evolving that company to be amongst the leaders within its industry. From 2007 until he joined the Company, he worked on mergers and acquisitions as well as some small-scale consulting roles.

AndrEw VAn dEr zwAn

Position Managing Director and Chief Executive Officer Qualifications: BA Chemical Engineering (with Honours)

Experience: Since October 2010 until recently ceasing to commence this role; Andrew held the position of General Manager Fuels and Marketing with United Petroleum. Prior to that he held the position of Business Development Manager with Golf Tourism Australia for 2.5 years. From May 2006 to July 2007, he was Non Executive Director of Gulfx Limited. From 1986 to 2003 he was employed in various senior positions within the worldwide operations of Exxon Mobil. This involved managerial positions in Australia, the United States of America, Europe and Africa.

ShAnE TurnEr

Position: Non Executive Director & Company Secretary

Qualifications: Chartered Accountant, Bachelor of Business Experience: Shane is currently employed at the Ballarat office of RSM Bird Cameron as a specialist Business Advisor. The move to RSM occurred due to the merger between RSM and Shane’s own accounting practice, which he operated for 10 years. Prior to that, Shane was employed at a large regional public accounting practice for 10 years and KPMG for 3 years. From April 2008 to October 2009, Shane held the position of Non-Executive Director and Company Secretary at Metminco Limited. Also, Shane has provided tax, business advisory and secretarial services to Pacrim Energy Limited for the last 5 years.

Company secretary

Shane Turner

Position: Non Executive Director & Company Secretary

Principal place of business

Level 8, 350 Collins Street, Melbourne Victoria 3000 Telephone: +61 3 9642 8575 Fax: +61 3 9642 5662 Email: info@mrgmetals.com.au Website: www.mrgmetals.com.au

Registered office

Level 1, 1-3 Bath Lane, Ballarat Victoria 3350 PO Box 237 Ballarat Vic 3353 Telephone: +61 3 5330 5800 Fax: +61 3 5333 1667 Email: info@mrgmetals.com.au Website: www.mrgmetals.com.au

Corporate accountant and Registered ASIC Agent

RSM Bird Cameron

Level 1, 1-3 Bath Lane Ballarat VIC 3350 PO Box 685 Ballarat VIC 3353 Telephone: (03) 5330 5800 Fax: (03) 5333 1667 Website: www.rsmi.com.au

Independent Auditor

Grant Thornton Audit Pty Ltd

Level 2, 215 Spring Street, Melbourne Vic 3000 Telephone (direct): +61 3 8663 6137 Telephone (office): +61 3 8663 6000 Fax: +61 3 8663 6333 Email: brad.taylor@au.gt.com Website: www.grantthornton.com.au

Independent Geologists

David Holden

Director, Shackleton Capital 49 Ord Street, West Perth 6005 Telephone: +61 8 9481 0900 Fax: +61 8 9226 3607

Solicitor

Middletons

Level 25, 525 Collins Street Melbourne, Vic 3000 Telephone: +61 3 9205 2000 Fax: +61 3 9205 2055 Website: www.middletons.com

Share registry

Link Market Services Limited Level 12, 680 George Street Locked Bag A14 Sydney South, NSW 1235 Telephone: 1 300 554 474

MRG Metals Limited / Options Prospectus

3

SECTION 2. ChAIRMAN’S LETTER

==> picture [507 x 90] intentionally omitted <==

11 August 2011

dear Shareholder,

As highlighted in the IPO Prospectus and in recognition of your ongoing support of our company, MRG Metals Limited is pleased to offer Shareholders the opportunity to participate in a 1 for 2 non-renounceable entitlements issue of Options.

All Shareholders registered as at 7.00pm AEST on 30 August 2011 will be entitled to participate in a pro-rata non-renounceable entitlements issue of Options on the basis of 1 Option for every 2 Shares then held. The Options will be issued at 1 cent per Option and at an exercise price of 25 cents, valid for a period of 5 years.

Since its initial listing on the ASX, the Company has continued to expand its portfolio of projects with the recently announced purchase of Gold and Nickel tenements in Kalgoorlie East, WA and Coal tenements in Collie South, WA. Exploration has commenced at Kalgoorlie East and the Board is currently reviewing its exploration program for the remainder of 2011 and 2012 to prioritise the focus on Kalgoorlie East and Collie South. These are exciting times for the Company and I thank each shareholder for their support. The opportunity to purchase Options under this Prospectus is recognition of this support.

The Closing Date for acceptance of the Offer is 5.00pm AEST on 21 September 2011.

I am pleased to advise that the Directors will take up their entitlement. I also wish to thank all Shareholders for their support since listing and look forward to your continued support into the future.

ALBERT H. PIETRzAk Chairman

SECTION 3. TIMETABLE AND IMPORTANT DATES

INDICATIvE kEy DATES

==> picture [526 x 23] intentionally omitted <==

----- Start of picture text -----

ACTION DATE
----- End of picture text -----

ACTION	DATE
Prospectus lodged with ASIC	12 August 2011
“Ex” Date	24 August 2011
Record Date for determining entitlements	30 August 2011
Dispatch Prospectus	2 September 2011
Opening Date	2 September 2011
Closing Date	21 September 2011
Expected date for allocation and dispatch of holding statements	28 September 2011
Expected date for the quotation of the Company’s securities on ASX	29 September 2011

The above dates are indicative only.

The Company reserves the right to vary the Opening Date and Closing Date without prior notice, which may have a consequential effect on other dates.

3.1 DATE Of PROSPECTUS

3.4 APPLICATION fOR LISTING

This Prospectus is dated 12 August 2011.

3.2 ALLOTMENT Of SECURITIES

No securities will be issued or allotted on the basis of this Prospectus later than 13 months after the date of this Prospectus. A copy of this Prospectus was lodged with ASIC on 12 August 2011. Neither ASIC nor ASX and their respective officers take any responsibility for the content of this Prospectus or for the merits of the investment to which this Prospectus relates. The fact that ASX may admit the Options to the Official List is not to be taken in any way as an indication of the merits of the Company or the Options offered under this Prospectus.

3.3 ELECTRONIC PROSPECTUS

Application will be made to ASX within 7 days after the date of this Prospectus for the Options offered pursuant to this Prospectus to be listed and quoted on ASX. The expected ASX code for the Options will be MRQO.

3.5 fORwARD LOOkING STATEMENTS

Various statements in this Prospectus constitute statements relating to intentions, future acts and events. Such statements are generally classified as forward looking statements and involve known and unknown risks, uncertainties and other important factors that could cause those future acts, events and circumstances to differ from the way or manner in which they are expressly or implicitly portrayed in this Prospectus.

This Prospectus may be viewed in electronic form online at the Company’s website www.mrgmetals.com.au. The information on the Company’s website does not form part of this Prospectus. Additional copies of the Prospectus are available at the registered office of the Company.

This Offer is available to persons receiving a version of this Prospectus in Australia.

The Corporations Act 2001 prohibits any person from passing onto another person an Application Form unless it is attached to or accompanied by the complete and unaltered version of this Prospectus.

3.6 SPECIfIC RISkS AS AN ExPLORATION COMPANy

Applicants should carefully consider the risk factors that affect the Company specifically and the resource, mining and exploration industry in which it operates. Applicants should note that mineral exploration is a high risk endeavour.

Applicants should understand that exploration and mining development is both speculative and subject to a wide range of risks and that, even if the Company makes a commercial discovery, Applicants may lose the entire value of their investment.

Any person may obtain a copy of this Prospectus free of charge by contacting the Company via email on info@mrgmetals.com.au.

MRG Metals Limited / Options Prospectus

5

SECTION 3. TIMETABLE AND IMPORTANT DATES (CONTINUED)

3.7 SUITABILITy Of INvESTMENT AND GENERAL RISk fACTORS

This Prospectus provides information to help Shareholders decide whether they wish to further invest in the Company. Before deciding to invest in the Company, potential investors should read the entire Prospectus, and in particular the technical information and the risk factors that could affect the future operations and activities of the Company. The Offer contained in this Prospectus does not take into account the investment objectives, financial situation and particular needs of the investor. Please read the Application Form carefully. Professional advice should be sought before deciding to invest in any securities the subject of this Prospectus.

3.8 DISCLAIMER

No person is authorised to give any information or to make any representation in connection with the Offer that is not contained in this Prospectus. Any information or representation not contained in this Prospectus may not be relied upon as having been authorised by the Company in connection with the Offer. Neither the Company nor any other person warrants the future performance of the Company or any return on any investment made under this Prospectus except as required by law and then only to the extent so required.

3.9 JURISDICTION

This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and any person into whose possession this Prospectus comes should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

This Prospectus has been prepared to conform to the securities laws in Australia.

No action has been taken to register or qualify the Options or the Offer, or otherwise to permit a public offering of the Options, in any jurisdiction outside Australia.

3.10 DEfINED TERMS AND ABBREvIATIONS

Terms and abbreviations used in this Prospectus are defined in Section 13. All financial amounts shown in this Prospectus are expressed in Australian dollars unless otherwise stated.

SECTION 4. DETAILS Of ThE OffER

4.1 PURPOSE Of ThE OffER

As highlighted in the IPO Prospectus, and in recognition of your ongoing support of our company, MRG Metals Limited is pleased to offer Shareholders the opportunity to participate in a 1 for 2 nonrenounceable entitlements issue of Options.

The Options will be offered on the basis of one (1) Option for every two (2) Shares then held. The Options will be issued at 1 cent per Option and at an exercise price of 25 cents. The terms and conditions of the Options are set out in Section 8 of this Prospectus.

In the calculation of any Entitlement, fractions will be rounded down to the nearest whole number.

The purpose of the Offer is to:

• (a) raise further working capital both:

4.3 MINIMUM SUBSCRIPTION

• (i) initially, on the issue of the Options; and

• (ii) later, on the exercise of those Options; and

• (b) meet MRG’s commitment to issue Options as disclosed in the IPO Prospectus.

The funds raised by the Offer of up to approximately $440,580 will be applied to working capital and also to meet expenses of the Offer (approximately $18,000).

4.2 ENTITLEMENT

The Company is making a pro-rata non-renounceable entitlements issue to Shareholders who are registered at 7.00pm AEST on 30th August 2011 of approximately 44,058,000 Options at an issue price of 1 cent each to raise approximately $440,580 (before costs of the Offer).

There is no minimum subscription.

4.4 OvERSUBSCRIPTIONS

Oversubscriptions will not be accepted.

4.5 UNDERwRITING

The Offer is not underwritten.

4.6 ShORTfALL

Any Entitlement not taken up pursuant to the Offer will form the shortfall. The Company reserves the right, within three (3) months of the Closing Date, to place the shortfall at the discretion of the Directors.

MRG Metals Limited / Options Prospectus

6

SECTION 4. DETAILS Of ThE OffER (CONTINUED)

4.7 ISSUE PRICE

The issue price is one (1) cent for each Option payable in full in Australian currency on the acceptance of the Offer as follows:

• Cheque drawn on and payable at any Australian bank

• Via Bpay on the individual entitlement form.

4.8 ACCEPTANCE

This Offer may be accepted in whole or in part. Acceptance and payment in full of 1 cent per Option must be received at the Company’s Share Registry, (Link) before 5.00pm AEST on the Closing Date. Instructions for completion and lodgement of acceptances are set out on the back of the enclosed Application Form.

4.9 ACTION By APPLICANTS

Accompanying and forming part of this Prospectus is an Application Form for use by Applicants in applying for Options. To participate in the Offer, the Application Form must be completed in accordance with the instructions on its reverse side.

All Application Forms and all Application Monies must be received by the Closing Date, at the Share Registry at the following address:

Link Market Services Limited

Locked Bag A14, Sydney South, NSW 1235

or delivered to:

Link Market Services Limited

Level 12, 680 George Street Sydney, NSW 2000

Cheques must be in Australian currency and made payable to “MRG Metals Limited – Share Account” and crossed “Not Negotiable”.

There is also BPay facility for Applications to be accepted electronically.

Access to a copy of the Prospectus and Application Form is available on the Company’s website: www.mrgmetals.com.au

4.10 OffER PERIOD

The Offer will remain open for Shareholders to accept from the period commencing on the Opening Date and ending on the Closing Date.

4.11 ALLOTMENT

The Options will be allotted and issued as soon as practicable after the Closing Date. Statements of holding for the Options will be mailed as soon as possible after the Closing Date. Pending the issue of the Options pursuant to this Prospectus, all Application Monies will be held by MRG on trust for the Applicants in a separate bank account as required by the Corporations Act.

No Options will be allotted and issued on the basis of this Prospectus later than thirteen (13) months after the date of this Prospectus

4.12 ASx OffICIAL QUOTATION

The Company will apply to ASX within 7 days of the date of this Prospectus for admission to the Official List and for Official Quotation of the Options under this Prospectus.

The fact that ASX may admit the Options to the Official List is not to be taken in any way as an indication of the value or merit of the Company or the Options offered under this Prospectus. Official Quotation, if granted, will commence as soon as practicable after the issue of holding statements to successful Applicants.

If the Company has not been admitted for Official Quotation within 3 months of the date of issue of this Prospectus, then the Company will refund all Application Monies in full. Interest will not be paid on Application Monies refunded.

The Directors will not allot Options unless and until ASX grants permission for the Options to be listed for Official Quotation. The expected ASX code for the Options will be MRQO.

4.13 APPLICATIONS OUTSIDE AUSTRALIA

This Prospectus does not, and is not intended to constitute an Offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an Offer or issue this Prospectus. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

The Company has not taken any action to permit the offer of Options under this Prospectus in any jurisdiction other than Australia.

It is the responsibility of non-Australian resident investors to obtain all necessary approvals for the allotment and issue of Options pursuant to this Prospectus. The return of a completed Application Form will be taken by the Company to constitute a representation and warranty by the Applicant that all approvals have been obtained. Applicants who are nominees or persons proposing to act as nominees should seek independent advice as to how they should proceed.

MRG Metals Limited / Options Prospectus

7

SECTION 4. DETAILS Of ThE OffER (CONTINUED)

4.14 ChESS

The Company currently operates an electronic issuer-sponsored subregister and an electronic CHESS sub-register. The two sub-registers together will comprise the Company’s register of Options.

The Company will not issue certificates to Shareholders. Shareholders who are allotted Options under this Prospectus will be provided with a transaction confirmation statement which sets out the number of Options allotted to the Shareholder. Shareholders who elect to hold Options on the issuer-sponsored sub-register will be provided with a holding statement (similar to a bank account statement), which sets out the number of Options allotted to the Shareholder under this Prospectus. For Shareholders who elect to hold their Options on the CHESS sub-register, the Company will issue an advice that sets out the number of Options allotted to the Shareholder under this Prospectus. At the end of the month of allotment, CHESS, acting on behalf of the Company, will provide Option Holders with a holding statement that confirms the number of Options held and any transactions during that month.

A holding statement (whether issued by CHESS or the Company) will also provide details of the applicable Holder Identification Number in the case of a holding on the CHESS sub-register or Reference Number in the case of a holding on the issuer-sponsored subregister. Following distribution of these initial holding statements, a holding statement will also be provided to each Option Holder at the end of any subsequent month during which the balance of that Option Holder’s holding of Option changes.

An Option Holder may request a holding statement at any other time. However, a charge may be imposed by the Share Registry for additional statements.

4.15 TAxATION AND TAx fILE NUMBERS

The acquisition and disposal of Options will have taxation consequences which will differ depending on the individual circumstances of each investor. All Shareholders should seek their own independent advice in relation to taxation matters.

4.16 ENQUIRIES REGARDING ThE OffER

If Applicants have any queries about the terms of the Offer or how to apply for Options, Applicants should contact their financial advisor or the MRG offer information line on 03 5330 5800 (within Australia) and +61 3 5330 5800 (outside Australia).

The Company is unable to advise Applicants on the suitability or otherwise of an investment in the Company, and for such advice Applicants must contact their own independent professional advisers.

4.17 PRIvACy DISCLOSURE

The Company collects information about each Applicant from the Application Form for the purposes of processing the Application and, if the Application is successful, to administer the Applicant’s security holding in the Company.

By submitting an Application Form, each Applicant agrees that the Company may use the information in the Application Form for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the Share Registry, the Company’s related bodies corporate, agents, contractors and third party service providers, including mailing houses, ASX, ASIC and other regulatory authorities.

If an Applicant becomes a security holder in the Company, the Corporations Act requires the Company to include information about the security holder (name, address and details of the securities held) in its public register. This information must remain in the register even if that person ceases to be a security holder in the Company. Information contained in the Company’s registers is also used to facilitate dividend payments and corporate communications (including the Company’s financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements.

If an Applicant does not provide the information required on the Application Form, the Company may not be able to accept or process the Applicant’s Application.

The Company is unable to give advice on any taxation matter as each Applicant’s position will relate to their own specific circumstances.

It is not necessary for Applicants to quote their tax file number. However, Applicants should read the instructions in the Application Form regarding the provision of their tax file number.

MRG Metals Limited / Options Prospectus

8

SECTION 5. INfORMATION DEEMED TO BE INCORPORATED IN ThIS PROSPECTUS

5.1 ShORT fORM PROSPECTUS

This Prospectus is a short form prospectus issued in accordance with section 712 of the Corporations Act 2001 in that it incorporates by reference information contained in a document that has been lodged with the ASIC and released to ASX.

This section consists of the report prepared by the independent geologist, Shackleton Capital Pty Ltd. The report details the geological setting and previous mining and exploration (if any) of the Company’s tenements. The report also provides information on the Company’s proposed exploration activities.

Section 7 – Independent Solicitor’s Report

The information to be incorporated by reference into this Prospectus is summarised below in Section 5.2 and will primarily be of interest to investors and their professional advisers or analysts.

The Company informs investors and their professional advisers that they are able to obtain, free of charge, a copy of the IPO Prospectus by contacting the Company at its registered office during normal business hours during the Offer Period. The IPO Prospectus will also be available by searching ASX’s records in relation to the Company, or by visiting the Company’s website at www.mrgmetals.com.au

5.2 SUMMARy Of INfORMATION DEEMED TO BE INCORPORATED

The information contained in the IPO Prospectus is deemed to be incorporated in this Prospectus to assist investors and their professional advisers to determine whether, for the purposes of making an informed investment decision in relation to the Options, they should obtain a copy of the IPO Prospectus.

The sections referred to below are references to sections in the IPO Prospectus:

Section 1 – key investment features

This section summarises the key features of the offer contained in the IPO Prospectus.

Section 2 – Offer and key dates

This section summarises the terms of the offer contained in the IPO Prospectus.

This section consists of the report prepared by the independent solicitors, Price Sierakowski. The report describes in detail the mining tenements which the Company’s wholly owned subsidiary, MRG Metals (Australia) Pty Ltd, had acquired or was proposing to acquire.

Section 8 – Investigating Accountant’s Report

This section consists of the report prepared by the investigating accountant, Grant Thornton Corporate Finance Pty Ltd. The report covers the historical and pro forma statement of financial position and the historical statement of comprehensive income. The report was included in the IPO Prospectus to assist potential investors and their advisers in making an assessment of the financial position of the Company.

Section 9 – Business and investment risks

This section acknowledges that there are factors, both specific to the Company and of a general nature, which may affect the future operating and financial performance of the Company and the value of Shares. It identifies some of the risks inherent in investing in the Company, including: acquisition and title to tenements; land access; exploration and evaluation risk; resources and reserves; key personnel risk; mineral prices; foreign exchange rate risk; commercialisation risk; transport and port capacity; environmental risk; carbon pollution reduction scheme; resources super profits tax; future financing; operational risk; contractual risks; ongoing financial requirements and general risks.

Section 10 – Additional information

This section sets out additional information required to be included in a prospectus, including:

• Company structure;

Section 3 – Business, projects and industry

This section summarises the tenements acquired by the Company and the mining and exploration programs proposed by the Company.

• shareholding structure;

• major shareholders;

• material agreements;

• rights and liabilities attaching to Shares;

Section 4 – Directors and management

This section contains information relating to each of the directors of the Company and a summary of the Company’s corporate governance policies.

• corporate governance;

• dividend policy;

• consents;

• interest of advisers and named persons;

• interests of directors;

Section 5 – Summary of financial information

This section is to be read in conjunction with the Investigating Accountant’s Report in section 8 (see below).

• directors’ interests in securities;

• costs; and

• directors’ responsibility and consent statement.

It includes a consolidated statement of comprehensive income for the period 24 January 2011 (ie incorporation) to 15 March 2011 as well as a consolidated statement of financial position as at 15 March 2011.

The section also details the Company’s accounting policies and includes various notes relevant to the financial statements.

Section 6 – Independent Geologist’s Report

MRG Metals Limited / Options Prospectus

9

SECTION 6. COMPANy OvERvIEw

6.1 OvERvIEw AND REfERENCE TO IPO PROSPECTUS

MRG is an Australian public company based in Victoria. The company was incorporated to undertake mineral exploration and production in Western Australia, initially through the acquisition of a number of prospective tenements. The acquisitions of all tenements described within the IPO Prospectus have been finalised prior to the issue of this Prospectus and form the basis of future growth of the company.

6.2 CIRCUMSTANCES OR MATTERS SUBSEQUENT TO ThE IPO PROSPECTUS.

Subsequent to MRGs successful listing in June the Board has actively pursued opportunities to further enhance our portfolio of projects focussed on Gold, Copper and Coal.

On 4 July, 2011 MRG announced the acquisition of the Kalgoorlie East Project comprising 15 granted tenements covering more than 1700 hectares located just 12km east of Kalgoorlie in Western Australia.

MRG aspires to become an investment of choice focussed on:

• (a) discovery and, potentially, mining of precious and base metal resources in its Western Australia project areas and further development of opportunities within Australia;

• (b) generation or acquisition of new exploration and mining opportunities for gold, base metals and other commodities within Australia and other prospective regions in Africa and South America; and

• (c) taking advantage of the current market conditions, supportive government environments and increasingly favourable economic, social and regulatory environment in its identified markets.

The Company now has 88,116,000 Shares on issue.

The Company was admitted to the Official List and the Shares were granted Official Quotation on 8 June 2011.

Under the ASX Listing Rules a number of shares were subject to escrow restrictions. Accordingly, the Company’s Share Registry has implemented holding locks on the relevant holdings and will not release them without ASX approval.

The numbers and periods of escrow in accordance with ASX admission requirements are as follows:

The key features of the kalgoorlie East Project include:

• The 15 Tenements cover over 1700 hectares of under-explored prospective greenstone trends of the Golden Ridge Belt being the southern continuation of the Bardoc Tectonic Zone.

• The project acquisition augments MRG’s existing gold project portfolio which includes the Xanadu and Braemore Gold Projects.

• • The tenements are also considered prospective for ultramaficassociated Ni-sulphide mineralisation, similar to deposits within the same greenstone belt to the south. The Carnilya Hill and Blair nickel both average in excess of 2.5%Ni and almost 2Mt of ore.

• Low risk acquisition cost, comprising consideration of $20,000 plus expenditure reimbursement, one million fully paid Shares (to be escrowed) and a 1.5% net production royalty.

• Proximity to experienced labor force, mining and exploration contractors and supportive industry infrastructure.

• In addition, soil samples are being analysed in conjunction with the recently acquired Aeromagnetic data to develop a targeted drilling program. The Board is targeting the development of the initial drilling program for Kalgoorlie East Project within the 4th quarter of this year.

On 26 July, 2011 MRG finalised agreement for an option to acquire a 100% interest of the highly prospective Collie South Coal Project.

• 29,091,000 Shares available for trading

• 28,336,000 Shares escrowed for 12 months from 18th March 2011

• 5,250,000 Shares escrowed for 12 months from 27 May 2011

• 24,439,000 Shares escrowed for 24 months from 8 June 2011

• 1,000,000 Shares escrowed for 12 months from 11 August 2011

The key features of the Collie South Project include:

• Potential for new coal bearing basins identified in acquired tenements, with limited previous exploration.

• Collie South Coal project covers 101 Blocks covering >50 km[2] within the Collie basin 26km x 13km x 2km thick.

• Great location with good infrastructure and resources.

• Low risk entry, initial 30% beneficial interest, for the upfront payment of $50,000 cash and 1 million Shares. Options to expand ownership to 100% over next 3 years, being a further 30% option within 2 years for an agreed commercial payment of Shares and the remaining 40% option within a further 1 year for an agreed commercial payment of Shares.

• Tenements also prospective for Bauxite.

• Management committed to rapid exploration program.

MRG Metals Limited / Options Prospectus

10

SECTION 6. COMPANy OvERvIEw (CONTINUED)

The Collie South Coal Project sits within a known Coal producing area, with significant current producers, but has had extremely limited exploration within its tenements and therefore must be considered prospective in nature. A detailed exploration program is being developed and will aim to provide exploration analysis and potential as quickly as possible to facilitate a targeted drilling program in 2012.

The following is a list of the latest disclosures made by the Company to ASX up to the date of this Prospectus:

• Appendix 3B (11 August 2011)

• Appendix 3B (4 August 2011)

• Quarterly Cashflow Report (29 July 2011)

• Quarterly Activities Report (29 July 2011)

MRG Metals Limited is a disclosing entity for the purposes of the Corporations Act and is listed on ASX. As such, it is subject to periodic reporting and continuous disclosure obligations. Specifically, MRG Metals Limited is obliged under the ASX Listing Rules to immediately notify ASX (subject to certain exceptions) of any information of which it becomes aware concerning the Company that a reasonable person would expect to have a material effect on the price or value of its securities.

Publicly disclosed information about all ASX-listed entities, including MRG Metals Limited, is available on ASX’s website at www.asx.com.au.

• July 26 ASX announcement clarification (29 July 2011)

• MRG Metals acquires Collie South Coal and Bauxite project (26 July 2011)

• Aeromagnetic targets identified at Kalgoorlie East (12 July 2011)

• New acquisition – Kalgoorlie East Gold Project (4 July 2011)

• Initial Director’s Interest Notice (9 June 2011)

• Initial Director’s Interest Notice (9 June 2011)

• Initial Director’s Interest Notice (9 June 2011)

• Prospectus (7 June 2011)

• Constitution (7 June 2011)

• Appendix 1A (7 June 2011)

• Trading Policy (7 June 2011)

• Governance (7 June 2011)

• Tenements (transfers) (7 June 2011)

• Tenements (status) (7 June 2011)

• Statements regarding escrow (7 June 2011)

• Commitments (7 June 2011)

• Balance sheet (7 June 2011)

• Top 20 (7 June 2011)

• Distribution Schedule (7 June 2011)

• Pre Quotation Disclosure (7 June 2011)

• Admission to Official List (7 June 2011)

• ASX Circular: Commencement of Official Quotation (6 June 2011)

SECTION 7. EffECT Of ThE OffER ON ThE COMPANy

Under the Offer, up to approximately 44,058,000 Options are available for issue and will be issued if the Offer is fully subscribed (either by Shareholders accepting the Offer under this Prospectus or pursuant to the placement referred to in Section 4.6 of this Prospectus).

Upon completion of the Offer, the issued capital of the Company will comprise 88,116,000 Shares and 44,058,000 Options assuming that the Offer is fully subscribed.

After expenses of the Offer, the proceeds from the issue of Options will be approximately $420,000.00. These funds will be applied to general working capital requirements of the Company.

MRG Metals Limited / Options Prospectus

11

SECTION 8. TERMS AND CONDITIONS Of OPTIONS ATTAChING TO ShARES

8.1 TERMS AND CONDITIONS Of OPTIONS

Option Holders will be entitled to subscribe for Shares on the following terms:

• each Option entitles the Option Holder to subscribe for and be allotted 1 fully paid ordinary Share in the capital of the Company;

• the Options are exerciseable at the Exercise Price;

• the Options will expire on the Expiry Date;

• each Option may be exercised at any time before the Expiry Date by notice in writing to the Directors (Exercise Notice), accompanied by payment of the applicable Exercise Price for each Option;

• upon receipt of a valid Exercise Notice and applicable funds, MRG will issue the Shares within 30 days;

• each Option will, assuming the Company’s application is successful, be quoted on the Official List;

• any Shares issued upon exercise of an Option will rank equally in all respects with all other Shares on issue at that time. The Company will apply for Official Quotation of all Shares issued upon exercise of the Options;

• there are no participating rights or entitlements inherent in the Options and Option Holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, if, prior to the Expiry Date, the Company makes a new issue of Shares to the Shareholders, the Company will send a notice to each Option Holder not less than 10 Business Date before the record date referable to that issue. This will give Option Holders an opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue;

• if, prior to the Expiry Date, the Company makes a bonus issue of shares to Shareholders, then, upon exercise of their Options, Option Holders would be entitled to have issued to them, in addition to Shares which otherwise be issued to them upon exercise of their Options, the Shares which would have been issued to them under that bonus issue (Bonus Shares) if, on the record date applicable to the bonus issue, they had been registered as the holder of the Shares to be issued to them upon exercise of the Options. Such Bonus Shares will be paid by the Company out of profits or reserves in the same manner as was applied in relation to the bonus issue and upon issue will rank equally in all respects with the Bonus Shares;

• there is no right to vary the Issue Price, the Entitlement Ratio or the Exercise Price for any Shareholder;

• if there is a capital reorganisation of the issued capital of the Company on or prior to the Expiry Date, the rights of an Option Holder will be changed to the extent necessary to comply with the applicable Listing Rules in force at the time of the reorganisation.

8.2 RIGhTS ATTAChING TO ShARES UPON ExCERCISE Of OPTIONS

Full details of the rights attaching to Shares are set out in the Company’s Constitution a copy of which can be inspected, free of charge, at the Company’s registered office during normal business hours.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders.

General MeetinGs and notice

Each Shareholder is entitled to receive notice of all general meetings of the Company and to receive all notices, accounts and other documents required to be sent to Shareholders under the Constitution, the Corporations Act or the ASX Listing Rules. Shareholders are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company.

Shareholders may requisition meetings in accordance with section 249D of the Corporations Act.

VotinG riGhts

Subject to any rights or restrictions for the time being attached to any class or classes of shares, at general meetings of shareholders or classes of shareholders:

• each Shareholder entitled to vote may vote in person or by proxy, attorney or representative;

• on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and

• on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him or her, or in respect of which he or she is appointed a proxy, attorney or representative, have one vote for every fully paid Share, but in respect of partly paid Shares shall have a fraction of a vote equal to the proportion that the amount paid bears to the issue price of the Shares.

diVidend riGhts

The Directors may from time to time declare such dividends as appear to the Directors to be justified by the profits of the Company.

Subject to the rights of persons entitled to Shares with special rights as to dividends (at present there are none), all dividends are paid in the proportion that the amounts paid on those Shares bear to the issue price of the Shares.

WindinG Up

If the Company is wound up, the liquidator may, with the authority of a special resolution, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he or she considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of shareholders.

transfer of shares

Shares in the Company are freely transferable, subject to formal requirements, and so long as the registration of the transfer does not result in a contravention of or failure to observe the provisions of a law of Australia and the transfer is not in breach of the Corporations Act or the Listing Rules.

Variation of riGhts

The Company may, subject to the Corporations Act and with the sanction of a special resolution passed at a meeting of Shareholders, or with the written consent of the majority of Shareholders in the affected class, vary or abrogate the rights attaching to Shares.

MRG Metals Limited / Options Prospectus

12

SECTION 9. ADDITIONAL INfORMATION

9.1 MARkET PRICES Of ShARES

Official Quotation of the Shares commenced on 8th June, 2011. Consequently, the trading history on ASX as at the date of this Prospectus is limited to that period.

During the period from commencement of Official Quotation to the date of this Prospectus:

• the highest recorded market sale price was $0.51 on 29 July 2011; and

• the lowest recorded market sale price was $0.20 upon listing on 8 June 2011.

9.2 TAxATION

It is the responsibility of all persons to satisfy themselves of the particular taxation treatment that applies to them by consulting their own professional tax advisers before investing in the Options or Shares and Options. Taxation consequences will depend on particular circumstances. Neither the Company nor any of its officers accept any liability or responsibility in respect of the taxation consequences or the matters referred to above or any other taxation consequences connected with an investment in the Options or Shares and Options in the Company or dealing with an entitlement in this Offer.

9.3 LEGAL PROCEEDINGS

There is no litigation, arbitration or proceedings pending against or involving the Company as at the date of this Prospectus.

9.4 CONTINUOUS DISCLOSURE AND DOCUMENTS AvAILABLE fOR INSPECTION.

The Company is listed on the ASX and its shares are quoted on the ASX under the code: MRQ. If admitted to the Official List, the Options will trade under the code: [MRQO].

The Company is a “disclosing entity” for the purposes of the Corporations Act. As such, it is subject to regular reporting and disclosure obligations, which require it to disclose to ASX any information of which it is or becomes aware concerning the Company and which a reasonable person would expect to have a material effect on the price or value of securities of the Company.

9.5 INTERESTS Of DIRECTORS

Full disclosure of the interests of the Directors, consultants/ promoters, seed capitalists and asset vendors for the period commencing on incorporation of the Company up to the date of issue of the IPO Prospectus is set out in section 10 of the IPO Prospectus. Other than as set out below or elsewhere in this Prospectus, that information and disclosure remains current.

The interest of the Directors (via controlled entities) in the securities of the Company at the date of this Prospectus is as follows:

==> picture [256 x 23] intentionally omitted <==

----- Start of picture text -----

Director No of Shares No of Options
----- End of picture text -----

Director	No of Shares	No of Options
Andrew Van Der Zwan	2,160,000	Nil
Albert Pietrzak	2,130,000	Nil
Shane Turner	1,470,000	Nil

The Directors have indicated they will take up their full entitlement to Options under the Offer.

9.6 ExPENSES Of ThE OffER

The total expenses of the Offer are estimated to be approximately $18,000 comprising ASIC lodgement fees, legal fees, share registry fees and printing and other administrative expenses.

9.7 ELECTRONIC PROSPECTUS

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please phone the Company and the Company will send you, for free, either a hard copy or a further electronic copy of the Prospectus, or both. The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

Copies of documents lodged with the ASIC in relation to the Company may be obtained from or inspected at, an office of the ASIC. This includes the IPO Prospectus referred to in Section 5 of this Prospectus.

Upon request, the Company will provide a copy of all documents used to notify the ASX of information relating to the Company under the provisions of the Listing Rules since admission to the Official List on 8th June 2011.

MRG Metals Limited / Options Prospectus

13

SECTION 10. MATERIAL CONTRACTS

The Company has not entered into any material contracts other than those summarised in the IPO Prospectus and those which have been the subject of ASX announcements referred to in Section 6.2 of this Prospectus.

SECTION 11. CONSENTS

Grant Thornton Corporate Finance Ltd (Grant Thornton) has given and not withdrawn its written consent in relation to the Investigating Accountant’s Report in section 8 of the IPO Prospectus and the reference to that report in this Prospectus. Grant Thornton has not authorised or caused the issue of any other part of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

Price Sierakowski Ltd has given and not withdrawn its written consent in relation to the Independent Solicitors Report in section 7 of the IPO Prospectus and the reference to that report in this Prospectus. Price Sierakowski has not authorised or caused the issue of any other part of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

Middletons has given and not withdrawn its written consent in relation to its role in the IPO Prospectus and has not caused or authorised the issue of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

Link Market Services Limited has given and not withdrawn its consent in relation to its role in the IPO Prospectus and has not caused or authorised the issue of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

RSM Bird Cameron has given and not withdrawn its consent in relation to its role in the IPO Prospectus and has not caused or authorised the issue of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

David Holden, of Shackleton Capital P/L, has given and not withdrawn its written consent in relation to the Independent Geologist’s Report set out in section 5 of the IPO Prospectus and the reference to that report in this Prospectus. David Holden has not authorised or caused the issue of any other part of this Prospectus, does not make or purport to make any statement in this Prospectus and takes no responsibility for any part of this Prospectus.

None of the entities referred to in this Section 11 have authorized or caused the issue of this Prospectus and do not accept any liability to any persons in respect of any false or misleading statement in, or omission from, any part of this Prospectus

SECTION 12. AUThORITy Of DIRECTORS

The Directors have made all reasonable enquiries and on that basis have reasonable grounds to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive. In respect to any other statements made in this Prospectus by persons other than Directors, the Directors have made reasonable enquiries and on that basis have reasonable grounds to believe that persons making the statement or statements were competent to make such statements. Those persons have given their consent to the statements being included in this Prospectus in the form and context in which they are included and have not withdrawn that consent before lodgement of this Prospectus with the ASIC, or to the Directors knowledge, before any issue of Options pursuant to this Prospectus.

This Prospectus is prepared on the basis that certain matters may reasonably be expected to be known to likely investors or their professional advisors.

Each of the Directors of the Company has consented to the lodgement of this Prospectus in accordance with section 720 of the Corporations Act 2001 and has not withdrawn that consent.

Dated the 12 August 2011

By

==> picture [119 x 42] intentionally omitted <==

ALBERT H. PIETRzAk Chairman

MRG Metals Limited / Options Prospectus

14

SECTION 13. DEfINITIONS

$ or A$ or AUD means references to dollar amounts in Australian currency.

AEST means Australian Eastern Standard Time.

Applicant means a person who makes an Application for Options.

Application means an application for Options under this Prospectus made by an Applicant under an Application Form.

Application Monies means monies received by the Company from Applicants with respect to Applications.

ASIC means the Australian Securities and Investments Commission.

Associates has the meaning given to that term in the Corporations Act.

ASX means ASX Limited (ACN 008 624 691).

ASX Settlement means ASX Settlement Pty Ltd ACN 008 504 532.

ASX Settlement Operating Rules means the operating rules of ASX Settlement from time to time.

Business Day means a day that is not a Saturday, Sunday or a public holiday in Melbourne, Victoria.

CHESS has the meaning given to that term in the ASX Settlement Operating Rules.

Closing Date means 5:00pm (AEST) on the date the Offer closes, which is set out in the “Important Information” Section and may be varied by the Company.

Company or MRG means MRG Metals Limited ACN 148 938 532.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2011.

Directors or Board means the board of directors of the Company.

Entitlement means entitlement of a Shareholder eligible to participate in the Offer.

Entitlement Ratio means 1 Option for every 2 Shares held by a Shareholder on the Record Date.

Excercise Price means $0.25.

Expiry Date means 14th September 2016.

IPO Prospectus means the prospectus lodged by the Company with the ASIC and dated 5 April 2011.

Issue means the issue of Options pursuant to this Prospectus.

Issue Price means $0.01 per Option.

Listing Rules means the listing rules of ASX.

Offer means the offer to Shareholders as at the Record Date to apply for up to forty four million and fifty eight thousand Options under this Prospectus.

Offer Period means the period commencing on the Opening Date and ending on the Closing Date.

Official List means the official list of ASX.

Official Quotation means official quotation of the Options on the Official List.

Opening Date means the date the Offer opens, which is set out in the “Important Information” Section and may be varied by the Company.

Option means an option to subscribe for one Share in the Company exercisable at 25 cents on or before 5:00pm AEST on 14 September, 2016 and issued under the terms set out in this Prospectus.

Option Holder means those parties holding Options to acquire Shares in the Company.

Prospectus means this prospectus as modified or varied by any supplementary prospectus made by the Company and lodged with ASIC from time to time.

Record Date means the date for determining Entitlement which is set out in the “Important Information” Section and may be varied by the Company.

Section means a section of this Prospectus.

Share means a fully paid ordinary share in the issued capital of the Company.

Share Registry means Link Market Services Limited.

Shareholder means a person who holds one or more Shares.

Tenements has the meaning given to that term in the IPO Prospectus plus any subsequent announcements listed in Section 6.2.

MRG Metals Limited / Options Prospectus

15

==> picture [118 x 82] intentionally omitted <==