Metminco : September 2016 Quarterly & Appendix 5B

ASX ANNOUNCEMENT 31 October 2016

Highlights of the activities for the Quarter ending 30 September 2016 included:

Quinchia Gold Portfolio

• SRK Consulting (USA) Inc (SRK) updated the Scoping Study on the Miraflores Project to provide for an underground only mining operation. Key results from the Scoping Study include:

  • Mine life: 9 years producing 50,000oz of recovered gold per annum at steady state

  • Mined Tonnes : 4.03Mt

  • Life of Mine capital: US$98 million

  • Life of Mine C1 cash costs: US$555/oz

  • Life of Mine AISC costs: US$648/oz

  • EBITDA: US$31.7 million per annum over 9 years

  • NPV (after tax): US$73.4 million @ 8% discount rate

  • IRR (after tax): 26%

  • Gold price: US$1,300/oz

• The Scoping Study does not provide the detail required to meet NI 43-101 or JORC 2012 compliant Ore Reserves.

• Nearby exploration targets such as Tesorito and Chuscal have significant upside potential.

  Los Calatos Copper-Molybdenum Project

• Completion of the first instalment occurred pursuant to the Agreement with CD Capital Natural Resources Fund III LP (CD Capital Fund III), whereby CD Capital will subscribe for new shares of up to US$45 million in Los Calatos Holding Ltd (LCH) to fund the completion of Pre-feasibility and Feasibility Studies (CD Capital Transaction) on the Los Calatos Project.

• Post-period, the first equity investment of US$16 million was received by LCH in mid-October 2016.

  Corporate

• A$1.0 (£0.57) million raised through the placement of 422,222,222 shares (settled early October 2016).

• The Company's cash position as at 30 September 2016 was approximately A$43,000. Early October 2016 the Company received approximately A$1.0 million on settlement of the equity placement.

• The Company is in advanced negotiations with respect to funding the Bankable Feasibility Study for the Miraflores Gold Project in Colombia.

Mr William Howe, Managing Director, commented: "The Company achieved two major milestones during the quarter. Firstly, the completion of a scoping study at Miraflores has confirmed our belief that we have a highly deliverable and robust near term gold project. Accordingly, we will expedite the completion of the Bankable Feasibility Study and are in advanced stages of executing the required funding. Secondly, the equity funding raised for the Los Calatos Project will ensure that our shareholders retain a significant interest in a world class asset that has the potential to be developed in the early 2020's when it is anticipated that there will be a supply deficit in the global copper market.

With two exciting projects being developed in parallel, Metminco now represents a diversified junior miner that has the capacity to deliver shareholder value in the near term, coupled with the upside potential within the larger Quinchia Gold Portfolio, which includes significant exploration targets. We are very optimistic for the future of the Company and look forward to advancing our projects."

Metminco Limited ABN 43 119 759 349

ASX Code: MNC.AX; AIM Code: MNC.L

Level 6, 122 Walker Street, North Sydney, NSW, 2060

Tel: +61 (0) 2 9460 1856; Fax: +61 (0) 2 9460 1857

www.metminco.com.au

Metminco retained SRK to complete an updated scoping level study on the Miraflores Project (Miraflores or the Project) located in Colombia (Scoping Study). The purpose of the study was to present an underground mining only scenario utilizing filtered tailings as backfill material and a dry stack tailings facility. The Scoping Study was completed by SRK with contributions from Metal Mining Consultants (MMC), GR Engineering Services Limited (GRES), and Dynami Geoconsulting (DG). A comprehensive announcement regarding the results of the Scoping Study was released to the ASX on 8 September 2016 and is available on the Company's website, www.metminco.com.au.

On the strength of the very positive Scoping Study results, the Board of Metminco has approved the commencement of the Feasibility Study, subject to availability of funding. A range of opportunities to further optimise the results of the Scoping Study, including reduction of initial infrastructure capital and expedite permitting by lessening the footprint of the potential mine development, are currently being evaluated.

The Miraflores property consists of a 124 hectare mineral exploitation located within the Municipality of Quinchía, Department of Risaralda, Republic of Colombia, some 190 km WNW of the Colombian capital of Bogota and 55 km to the north of Pereira, the capital of the Department of Risaralda.

As of 02 April, 2013, MMC estimated a Measured and Indicated Mineral Resource of 72.6 Mt at a gold and silver grade of 0.78 g/t and 1.52 g/t respectively using a cut-off grade of 0.27 g/t gold in accordance with NI 43-101. The mineral resource was based on 25,884 m of drilling in 73 diamond drill holes and 236 meters of underground channel samples. The mineral resource estimate provided for both an open pit and an underground mining operation.

More recently, MMC was retained by Metminco to produce a mineral resource that is estimated in accordance with the guidelines of the JORC Code (2012 Edition), but which only provided for the exploitation of the Miraflores deposit via an underground mining operation, and hence a higher cut-off grade of 1.2 g/t gold. The revised mineral resource estimate is summarized in Table 1.

Based on a gold cut-off grade of 1.2 g/t.

Rounding-off of numbers may result in minor computational errors, which are not deemed to be significant.

Sensitivity to varying gold grades is disclosed on page 7 of the Company's announcement of 8 September 2016.

Costing of the Miraflores Project has been completed to various levels of detail (refer announcement on 8 September 2016 for details). The scoping level study is considered to be at an accuracy level of

+/- 30% including contingencies.

The capital cost estimate for the Miraflores PEA LoM totals US$98 million, including contingency, and is summarized in Table 2. The capital is broken down by initial capital, required to start and develop the mine, and sustaining capital used to continue operations.

The capital cost estimate developed for this study includes the costs associated with the engineering, procurement, preliminary estimates of taxes, duties, and freight, construction, commissioning and pre- operation required for all Project facilities. The cost estimate was based on preliminary estimates developed for the Project by SRK for mining, processing, owner's cost, investment of water monitoring, equipment salvage, and sustaining costs. GRES contributed the tailings filter cost. DN developed the dry stack tailings costs. The capital cost estimated includes direct and indirect costs. Estimates are based on preliminary designs and costs from other similar projects combined with first principles estimates.

Contingency is in the capital cost estimate for processing (25%), tailings (15%), infrastructure (25%), and owner's costs (25%). The overall contingency initial front capital is 17%.

Operating costs are based on underground mining, process, tailings and G&A estimates. All costs are in Q3 2016 US dollars. The mining operating costs do not include capitalized development costs. LoM operating costs by cost center are shown in Table 3. Over the life of the Project, operating costs are estimated at US$57.17/t milled.

The financial results are derived from annual inputs provided by SRK, Metminco, GRES, and DN. SRK developed the economic model. Cash flows are reported on a yearly basis.

A financial model was prepared on an unleveraged, post-tax basis. The model includes a pre-tax summary for completeness. The basis and results are presented in this section. Key criteria used in this analysis are summarized in Table 4.

An 18-month pre-production period allows for the post permitting activities through to commercial production, including all construction activities and surface rights settlement, pre-production mine development, process plant and facilities construction and infrastructure development.

Mill feed is planned at 1,300 t/d with varying grades that provide average LoM plant feed grades of 3.51 g/t Au and 2.84 g/t silver (including low grade stockpile feed material).

A flat 33% income tax has been used. This is the result of combining the Colombian corporate income tax at 25% and the CREE tax at a rate of 8%.

Working capital changes are based on accounts receivable paid 30 days after a sale is reported, accounts payable are due 30 days following delivery of service, 16% VAT (IVA) tax over capital is recovered after a period of 30 days and operations net inventories of 30 days.

The financial inputs to the economic model are provided in Table 5.

The following exchange rates and consumables were used:

 US$1.00 = COP$3,000;

• Diesel: US$0.70/L; and

• Power: US$0.11/kWh.

After-tax NPV is US$73 million, using an 8% discount rate (NPV 8%) with an IRR of 26%. These and other economic results are summarized in Table 6.