TERRA METALS LIMITED — Capital/Financing Update 2014

Mar 16, 2014

ASX Announcement

REVIEW CONFIRMS EXCELLENT REGIONAL INFRASTRUCTURE FOR BUCK CREEK

HIGHLIGHTS:

• Preliminary review confirms the potential for the low cost capital development of Buck Creek given proximity to existing and underutilised barge waterways, rail and road infrastructure and utilities

• Located adjacent to the Green River which provides low cost barge access to the lucrative regional river market consisting of large, scrubbed and highly efficient domestic power plants

• Well established road and rail networks providing supplementary access for the transportation of coal to domestic and seaborne markets

• Existing regional power and water utilities capable of servicing the Buck Creek Project with typical cost of power ranging from US6 cents to US7 cents per kWh

• Established coal mining equipment and services industries and highly skilled population centres are proximal to the Buck Creek Project

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Paringa Resources Limited (“ Paringa ” or “ Company ”) is pleased to announce the results of a review of regional infrastructure for the Buck Creek coal project (“ Buck Creek Project ”) confirming excellent availability of low cost barge waterways, rail and road coal transportation infrastructure providing the potential for low capital cost development. In addition, the review indicated the Buck Creek Project to be in close proximity to coal mining equipment and services industries and highly skilled population centres with access to very competitive power and water utilities.

The review of regional infrastructure will be incorporated into the Scoping Study for the Buck Creek Project which is due for completion by the end of March 2014.

Paringa’s Chief Executive Officer, Mr David Gay, said “The Buck Creek Project is located in the heartland of the Western Kentucky coal mining industry with excellent access to barge waterways, rail and road transportation infrastructure. The ability to utilise low cost barge transportation to service the lucrative river market directly from the Buck Creek Project’s proposed river dock load facility adds to the competitive advantage of developing a low capital and low operating cost project within the Illinois Basin.”

For further information contact:

David Gay Chief Executive Officer

Nathan Ainsworth Business Development

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Figure 1: Buck Creek Project and Infrastructure Map

Barge Waterways

The primary market access point for Buck Creek Project’s saleable product is via barge on the Green River. The Green River is part of the Mississippi River System, a 12,350-mile (19,871 km) network of navigable waterways that connects most of the Eastern and Midwestern US. Coal is the largest commodity by volume moving throughout the system and accounts for over 20 percent of all coal consumed in the US.

The Buck Creek permitted river load-out facility is located at mile marker 62 on the Green River, as measured from the confluence with the Ohio River. The Green meets the Ohio at mile marker 784, which is approximately 169 miles (271 km) from the Mississippi and 145 miles (233 km) from the Tennessee and Cumberland Rivers.

The width of the river and length of the locks enable a two-by-two arrangement (two-barges wide and two-barges long) for barge tows originating from the Buck Creek river dock. Standard coal barges are typically 195 feet long, 35 feet wide with a draft of 9 feet and a capacity of 1,500 tons each. Once on the Ohio River, the loaded barges will be fleeted near the confluence with the Green River and assembled into larger tows (i.e. 9 to 16 barge tows) to be moved to the coal power plant or export facility.

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Table 1: Typical Barge Tow Arrangements in the Mid-West

Table 1: Typical Barge Tow Arrangements in the Mid-West	Table 1: Typical Barge Tow Arrangements in the Mid-West	Table 1: Typical Barge Tow Arrangements in the Mid-West	Table 1: Typical Barge Tow Arrangements in the Mid-West
River	# Barges Wide	# Barges Long	Total # of Barges
Green	2	2	4
Ohio	3	5	15
**Lower Mississippi **	5	8	40+
**Upper Mississippi **	3	5	15
Tennessee	3	5	15

The initial target market for Buck Creek’s coal is the lucrative river market consisting of large, scrubbed domestic power plants currently receiving ILB coal by barge along the Green, Ohio and Cumberland rivers. Access to ILB coal provides a significant cost advantage for coal fired power plants. The delivered cost of coal transportation via barge using the navigable waterways in the US (e.g. Ohio River) is significantly lower than the delivered cost of transporting coal via rail. Within the regional river market surrounding the Buck Creek Project, there are over 18 power plants operated by 10 different utilities. These plants are relatively modern, highly efficient base load power plants.

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Figure 2: Coal Transportation via Barge

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Figure 3: Typical Modern Coal Fired Power Plants on the Ohio River (Left: 2.4GW JM Stuart Plant, Right: 1.4GW Zimmer Plant)

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Barge Loading Facility

The Buck Creek Project has a permitted barge load-out facility and the Company is studying multiple options in the transportation of coal from the mine site to the barge load-out facility using an overland conveyor or via road haulage.

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Figure 4: Aerial Photo of Proposed Mine Plant and Slope, and River Dock Permits

A barge-loading system will consist of a ground-based tower connected to a floating work barge by a 48inch wide 170-foot long loading conveyor. The tower will stand approximately 45 feet above the river and 90 feet away from the river bank. The 30-foot wide 120-foot long work barge will be anchored on piers 30 feet from the river bank. The system will have a design capacity of 2,500 tons per hour. Scales indicating draft on the side of the barge will be used to gauge tonnage with loaded drafts up to 9 feet 6 inches.

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Figure 5: Cross Section View of Barge Load-Out Facility

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Alternative Coal Transportation

It is proposed that coal produced at the Buck Creek Project will be shipped from a barge load-out facility located on the Green River, but occasional shipments to nearby power plants may be arranged by truck. Future studies will assess the possibility of utilising the Calvert City Terminal barge to rail trans-loading service. Located approximately 220 river miles from the Buck Creek river dock, SCH Services Calvert City Terminal is capable of loading railcars for delivery to customers on the CSX, NS, UP, CN, or BNSF railroads through a connection with the P&L Railroad.

Access to Seaborne Markets

To access coal export terminals in the Gulf of Mexico, barge tows from the Buck Creek river dock will travel down the Green, Ohio and Mississippi Rivers. The average transit time to the Gulf Coast is approximately 11 days with the base rate for barging being approximately US$15.00 to US$16.50 per ton. Coal terminals along the Mississippi River are capable of loading cape-sized vessels with up to 120,000 tons (~100,000 tonnes) of coal for service coal markets in Europe, South America and Asia.

Roads

The Pennyrile Parkway (Interstate 69) and paralleling State Route 41 provide the primary roadway access to the Buck Creek Project. Both of these roads pass north-south through the property and generally define the western edge of the Area of Interest. The eastern portion of the property is accessible by north-south State Route 81 from the town of Owensboro Kentucky and east-west State Route 85 from the town of Madisonville. Various county roads with intersections to the Parkway and state roads provide access to the interior of the Buck Creek Project.

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Figure 5: Pennyrile Parkway near the Buck Creek Site

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Local Mining Industry

The Western Kentucky coal mining region is one of the oldest and most extensively developed coal regions in the US, dating back to the early 1800’s. The Buck Creek Project is extremely well serviced by all major mining equipment manufacturers and mine service and supply services. Major mining equipment manufacturers have rebuild and component service exchange centres located very near the proposed mine site. A major network of mining service providers including slope, shaft and preparation plant construction companies are located within the immediate area.

Population Centres

The Project is located in the western section of Kentucky approximately 30 miles south of Henderson, Kentucky (population 28,757) and between the towns of Calhoun (population 763) to the east and Hanson (population 742) to the west. The Property is located within a 45-minute drive of Evansville, Indiana (metro population of 358,676) and within a two-hour drive of Louisville, Kentucky (metro population of 569,135) and Nashville, Tennessee (metro population of 1,589,934). Given the importance of coal mining to the region, community attitudes towards new underground coal mine developments are very positive.

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Figure 6: Town of Calhoun and the Green River

Power

The Buck Creek project is located in a region serviced by two separate electric utility providers capable of supplying the 69-kv service required, Kentucky Utilities (“ KU ”) and Big Rivers Electric Corporation (“ Big Rivers ”). Major transmission and distribution lines are located within the Buck Creek Project. Power rates are currently in the range of 6 cents to 7 cents per kWh.

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Water

Fresh water for the Buck Creek mine and plant will be pumped from the barge load-out facility on the Green River along the corridor provided for the overland conveyor or along the highway right of way. To supply the mine office and bathhouse potable water will need to be accessed from the local public water system. The nearest public water source is supplied by the City of Calhoun.

Forward Looking Statements

This release may include forward-looking statements. These forward-looking statements are based on Paringa’s expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Paringa, which could cause actual results to differ materially from such statements. Paringa makes no undertaking to subsequently update or revise the forward-looking statements made in this release, to reflect the circumstances or events after the date of that release.

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