MMI: Offer to Gulf Alumina Shareholders from Metro

METRO

MINING

L IMIT E D

OFFER BY

METRO MINING LIMITED

ACN 117 763 443

to acquire all of your shares in

for either

or

for each Gulf Share that you hold

The Offer is dated 28 October 2016 and will close at 7.00pm (Sydney time) on 5 December 2016, unless extended.

Please call Metro Mining Limited's Company Secretary on

+61 7 3009 8004 if you have any queries relating to this Offer Booklet.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to how to deal with it, you should consult your legal, financial or other professional adviser as soon as possible.

FINANCIAL ADVISER

Argonaut Capital Limited

LEGAL ADVISER

McCullough Robertson Lawyers

Important Notices 2

Letter from the Chairman 3

1. Benefits of accepting Metro's Offer 5

2. About the Offer 8

3. How to accept the Offer 9

4. Profile of Gulf 10

5. Additional information 14

6. Definitions and interpretation 17

Schedule 1 19

Annexure A A

Annexure B B

1 | OFFER BOOKLET - METRO MINING LIMITED

This offer booklet is dated 28 October 2016 (Offer Date). The Offer is made to all Gulf Shareholders on the Offer Date.‌

The Offer may be withdrawn by sending a withdrawal document to you, but generally not within one month of the date of the Offer.

This Offer Booklet is important and should be read in its entirety before deciding to accept the Offer. This Offer Booklet is not a prospectus under the Corporations Act and has not been lodged with ASIC.

No party other than Metro has authorised or caused the issue of this Offer Booklet, or takes any responsibility for, or makes, any statements, representations or undertakings in this Offer Booklet.

By returning the Acceptance Form, you acknowledge that you have read this Offer Booklet and you have acted in accordance with and agree to the terms of the Offer detailed in this Offer Booklet.

Definitions, currency and time

Defined terms used in this Offer Booklet are contained in section

6.1. All references to currency are to Australian dollars and all references to time are to Sydney time, unless otherwise indicated.

Taxation

There will be tax implications associated with accepting the Offer. Metro considers that it is not appropriate to give advice regarding the tax consequences of accepting the Offer under this Offer Booklet and recommends that you consult your professional tax adviser in connection with the Offer.

Governing law

This Offer Booklet, and the contracts formed on acceptance of the Offer are governed by the law applicable in Queensland,

Australia. By returning the Acceptance Form, you submit to the exclusive jurisdiction of the Queensland courts and courts competent to hear appeals from those courts.

No representations

No person is authorised to give any information or to make any representation in connection with the Offer which is not contained in this Offer Booklet. Any information or representation in connection with the Offer not contained in the Offer Booklet may not be relied upon as having been authorised by Metro or any of its directors or officers.

Not a disclosure document

This Offer Booklet is not a disclosure document for the purposes of the Corporations Act and does not contain all of the material information which a prospective investor may reasonably require to make an informed investment decision about the Metro Shares, including in relation to the assets and liabilities, financial position and performance, profits and losses and prospects of Metro and

its Shares. A Prospectus has been prepared for this purpose and is included with this Offer Booklet. Please read this Prospectus in full if you are considering accepting the Offer and electing to receive the Cash and Scrip Consideration.

Investment decisions

This Offer Booklet does not constitute financial product advice and does not take into consideration your individual investment objectives, financial situation or particular needs. You may wish to seek independent financial and taxation advice before deciding whether or not to accept the Offer for your Gulf Shares.

Forward looking statements

This Offer Booklet contains certain forward looking statements and statements of current intention. The forward looking statements in this Offer Booklet reflect views held at the Offer Date.

You should be aware that those statements involve inherent risks and uncertainties. Actual events or results may differ materially from the events or results expressed or implied in any forward looking statement and those deviations are both normal and to be expected.

None of Metro, its officers or any person named in this Offer Booklet or involved in the preparation of this Offer Booklet makes any representation or warranty as to the accuracy or likelihood of fulfilment of any forward looking statement. You should not place undue reliance on those statements.

Risks

Refer to the 'Risk factors' section in the Prospectus accompanying this Offer Booklet for a summary of general and specific risk factors that may affect Metro or its related entities.

Privacy statement

Metro has collected your information from the register of Gulf Shareholders. The Corporations Act permits information to be made available to certain persons, including Metro. Your information may also be disclosed on a confidential basis to

Metro's related bodies corporate and external service providers and may be required to be disclosed to regulators such as ASIC. You can contact Metro for details of information held by Metro about you.

OFFER BOOKLET - METRO MINING LIMITED | 2

28 October 2016 Dear Gulf Shareholder‌

Offer to acquire all of your Gulf Shares

On behalf of Metro Mining Limited (Metro), I am pleased to present this offer to acquire all of your shares in Gulf Alumina Limited (Gulf) (Offer).

As you are probably aware, Metro is Gulf's largest shareholder, with a relevant interest in 39.3% of Gulf Shares. Metro also owns the Bauxite Hills Project which adjoins Gulf's Skardon River Project in Cape York, Queensland.

Under Metro's Offer, you may elect to receive either:

• cash of $0.60 for each Gulf Share you own (Cash Consideration); or

• $0.50 cash plus one share in Metro for each Gulf Share you own (Cash and Scrip Consideration).

  Based on Metro's closing share price on 28 October 2016 of $0.12, the Cash and Scrip Consideration has an implied value of

  $0.62 per Gulf Share.

  The Offer is only subject to Metro having a relevant interest in more than 51% of Gulf Shares at or before the end of the Offer Period. The Offer is made in respect of all Gulf Shares on issue (other than those in which Metro currently has a relevant interest in), including those which are issued as a result of the exercise of Gulf Options granted on or before the Offer Date.

  Superior Offer to Gulf Standalone

  Metro considers its Offer superior to remaining a shareholder in Gulf as a standalone entity, for the following reasons:

• the Offer provides attractive value, with an ability to elect to choose either all cash consideration or a mix of cash and equity to share in the potential upside of Metro;

• if you choose to accept the Offer and elect to receive the Cash and Scrip Consideration, you will take shares in an ASX listed company, which offers greater liquidity than holding unlisted Gulf Shares;

• if you elect to receive the Cash and Scrip Consideration, you will take equity in a company with a proven board and management team that has been involved in the development and operation of numerous mining projects globally;

• Metro can unlock significant value though the development of Metro's and Gulf's projects on a combined rather than a standalone basis, with Gulf's own independent expert Grant Thornton estimating there could be over $200 million of synergies; and

• you will avoid significant risks involved with remaining a Gulf shareholder, which is an unlisted company facing numerous challenges, given its limited project development expertise when compared with Metro, as well as ongoing delays to its project, including Land Court proceedings, a weak balance sheet and reliance on debt funding.

Superior Offer to Moly's Highly Conditional Proposal

Metro also considers its Offer superior to the highly conditional offer proposed by Moly Mines Limited (Moly). Moly having been suspended from trading on ASX since April 2014 and is a controlled subsidiary of Sichuan Hanlong Group Co., Limited (Hanlong), who holds 53.8% of Moly's shares.

Hanlong has been the subject of recent controversy in both Australia and China, including the conviction of former Hanlong employee and Moly director, Mr Hui Xao in 2016 for insider trading. Hanlong is also Moly's sole lender, with more than $14 million of debt currently outstanding. Hanlong's nominee is Moly's Chairman and Hanlong nominees make up half the Moly board.

Moly has proposed to acquire all Gulf Shares for $0.46 cash and 1.4 unlisted options in Moly (Moly Options) per Gulf Share. The Moly Options are exercisable at $0.16, which provides net cash of less than $0.24 per Gulf Share once the exercise of the Moly Options is taken into account. The value of the Moly Options is very uncertain, given Moly remains suspended from ASX and given the exercise price of the Moly Options is 130% higher than the closing price of Moly's shares the day before it was suspended from ASX trading.

Moly's highly conditional proposal is subject to numerous conditions, some of which are outside of the control of Moly. Moly's conditions include, amongst others, obtaining FIRB approval for the acquisition of Gulf, obtaining approval from ASX and its shareholders for re-listing, there being no material adverse change to Gulf's tenure or Gulf having to share infrastructure, Moly obtaining 'all necessary regulatory and other approvals, consents and waivers', and there being no material adverse change in the 'business, assets, liabilities, financial or trading position, profitability or prospects of Gulf'.

3 | OFFER BOOKLET - METRO MINING LIMITED