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METRO Annual Report | 2016 MINING LIMITED “ Corporate Directory Chairman’s Report I would like to thank Shareholders for their ongoing support. Your Board is confident 2017 “ will produce the results we have been working toward. Once again it my pleasure to provide an introduction In tandem to progressing Bauxite Hills, we concluded to the Annual Report to Metro Mining Shareholders. negotiations that ultimately led to strategic financing being provided by the well regarded UK equity fund A quick review of our ASX Announcements since Greenstone Resources. This resulted in an equity the last AGM is testimony to how busy your Board, investment of $8.9M for a 19.98% shareholding. the Executive and the Metro Team have been this year and this has been reflected in our increased Greenstone has made a significant investment in market capitalisation and share price. The CEO your Company and has conditionally committed will expand upon this in his report. to substantial additional financial backing for the development of Bauxite Hills. I welcome Whilst there has been a great deal of activity our Greenstone to the Metro Board and I am focus has remained steadfastly on the Bauxite Hills confident their expertise will add substantially Project. to the Company. In doing so, I also acknowledge the ongoing support of all shareholders. As our highest priority, the Metro team has worked tirelessly to minimise the timing impact of a full EIS Late last year we made a takeover offer for Gulf for the Bauxite Hills Project. Throughout the year Alumina Ltd which was aimed at combining two we have constantly reminded Government of the very similar operations to form a significant bauxite importance of maintaining strict timeframes of the entity on western Cape York. The synergies were licensing process. obvious to many and Metro is now Gulf’s largest shareholder with a holding of 22%. We continue to Whilst industry analysts predict Australia will remain discuss future direction with Gulf Alumina’s Board. the dominant bauxite exporter to China over the coming years, in these days of extremely low Metro believes Myanmar is one of Asia's great ocean freight costs, Guinea is emerging as a key unexplored mineral frontiers and for the past supplier. Ever mindful of worldwide demand and few years we have been reviewing exploration productionCorporate dynamics, weDirectory are determined not to opportunities there. In June 2016, via a 100% owned miss the present window of opportunity. Myanmar subsidiary, Metro signed a JV Agreement to acquire 80% of the Mahar San Project, which is Whilst Australia’s bauxite mines currently provide highly prospective for zinc, gold, silver and lead over a quarter of global seaborne supply it is mineralisation. While it is not a key focus, Metro important for the State and the Country that this looks forward to exploring this exciting opportunity market dominance is not lost, and it is time for in a burgeoning mining jurisdiction in the future. the emergence of another independent bauxite supplier. Again, I would like to thank Shareholders for their support. Your Board is confident 2017 will produce Interestingly, China's bauxite imports have jumped the results we have all been working toward. from 2.2Mtpa to 50 Mtpa over the past decade and it is predicted this boom will continue as the I sincerely thank my fellow Board Members auto industry increasingly drives aluminium global and the Metro team, led by Simon Finnis, for demand. As they strive to make vehicles lighter their dedication and hard work throughout for electric cars, but also for fuel efficiency in an extraordinary and challenging year. traditional automobiles, the use of aluminium in car bodies is predicted to reach 75% of total world Sincerely, production by 2025. We are obviously well placed to take advantage of the continued strong demand for bauxite. Stephen Everett | Chairman CEO’s Report Our mantra has always been “performance and results” and this year we have “ succeeded in achieving a great deal. It is with great pleasure that I report to you on the Last year, when the State Government Department of Environment & Heritage Protection (DEHP) activities of the past year, a year that has seen a advised that an EIS was required for Bauxite Hills considerable amount of time and effort devoted we set ourselves an aggressive schedule designed to bringing our flagship Bauxite Hills Project to to achieve the task within the shortest period development and operation. possible. I congratulate my team and our We have worked hard in continuing to develop consultants for the manner in which they have Metro Mining into a creditable, professional and approached the challenge. We have met all forward thinking company. In an environment where our targets, however a delay to the approvals the mining industry worldwide is going through a process has occurred which, when coupled with myriad of challenges this has been no easy task. the disruption that will be caused by the wet season in 2017, means we anticipate a six month However, our mantra has always been “performance delay to our first shipping target. We are now and results” and this year we have succeeded in actively planning for our first shipment in Q2 2018. achieving a great deal; including: I am delighted to report that, having secured . Publishing a significant mining Reserve of Native Title Agreements, we have held the first 48.2million tonnes meeting of our Native Title Liaison Committee. Successfully raising A$5.6 Million at $0.08 Our Agreement includes a Cultural Heritage via a Placement and Entitlement Offer Management Plan for the Project area, employment and training opportunities for . A non-binding MoU with Xinfa for 1Mtpa of traditional owners, business development bauxite (50% of annual production based and contracting opportunities for Ankamuthi on the 2Mtpa case) businesses and payment of mining benefits to Corporate Directory both the Ankamuthi People and OMAC for the . Finalising the Bauxite Hills DFS for 2 Mtpa life of the mine. Land rehabilitation is included and immediately undertaking an increased as an integral part of the Agreement, with production scenario PFS at 4Mtpa progress being continually reviewed by the . Launching an off market takeover offer Committee. We look forward to growing the for neighbouring Gulf Alumina already strong relationship with all stakeholders to deliver long term benefits to all concerned. Gaining vital Native Title and Land Access Agreements Our Bauxite Hills Project has advanced considerably this year. In addition to the . Signing Transhipping Agreements Government approvals process a lot of work has been done in preparing for the start of . A signed JV to Acquire 80% of the Myanmar site construction and mining operations. VMS Project . Strategic financing with Greenstone Resources Throughout the year, we worked hard to present Metro in a professional manner to Shareholders . Submitting the Bauxite Hills Environment Impact and potential financiers both here and overseas. Statement (EIS) It was through these efforts that we were introduced to UK based Greenstone Resources. CEO’s Report The Greenstone Resources’ investment was a at providing additional, perhaps significant, transformational deal from which both Metro and opportunities for Metro once operations have Greenstone will benefit considerably. Their initial commenced at Bauxite Hills. The multi-element investment will take Metro through to a decision to nature of the mineralisation there shows mine and the follow on commitment means the potential for an attractive discovery. equity portion of the funding required to construct Bauxite Hills is greatly de-risked. I would like to convey my appreciation to our small and dedicated Metro team for their We will also benefit from the experience the willingness to multi task and pitch-in, often under Greenstone team “bring to the table” with regards extremely testing circumstances, in order to technical, financial and development advice. for us to achieve results. Greenstone’s due diligence was very thorough and, again, the Metro team put in an enormous I sincerely thank the Board for their guidance amount of work and effort during that process. and assistance. It is a great credit to all concerned that we have reputable third party validation of our project and I particularly thank all shareholders for their its trajectory towards production. ongoing support. While a malaise was present and surrounded the Sincerely coal industry for much of the year, we see a bright future and we have maintained the key coal tenements, whilst divesting those no longer required. Our investment in Myanmar, through our wholly owned subsidiary has been strategic and aimed Simon Finnis Chief Executive Officer Metro Mining Share Price Metro Share Price Price ($) $0.14 Corporate Directory $0.12 $0.10 $0.08 $0.06 $0.04 $0.02 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2015 2015 2015 2015 2016 2016 2016 2016 2016 2016 2016 2016 2016 Board of Directors Stephen Everett Mark Sawyer Independent Non-Executive Director Non-Executive Chairman Mark Sawyer is Senior Stephen Everett has more Partner and co-founder of than 40 years Board and Greenstone Capital LP. He management experience is Director of Greenstone in resources in Australia and Management Ltd and a overseas. Former Chair of member and co-Chair of Agrimin Ltd, IronRidge the Investment Committee. Resources Ltd, Australian Formerly he was Xstrata plc Solomons Gold Ltd, BeMaX co-head of group business Resources NL and JMS Civil development. Mark joined & Mining Pty Ltd. the Metro Board July 2016. Dongping Wang Non-Executive Director Dongping Wang is Chair of Philip Hennessy DADI Engineering Independent Development Group, Non-Executive Director China's largest coal industry Phil Hennessy has over 30 engineering group. He is a years corporate financial highly renowned coal experience and was KPMG processing expert and a Qld Chairman for 13 years.