Metals Exploration Regulatory News (MTL)

METALS EXPLORATION PLC

FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2012

Metals Exploration plc (AIM:MTL) (the "Company" or the "Group"), the natural resources exploration and development company with assets in the Pacific Rim region, is pleased to announce its final results for the year ended 31 December 2012.

SNAPSHOT:

In the year ended 31 December 2012:

·; A package of early construction works on key infrastructure significantly advanced the project in readiness for the commencement of full construction.

·; Early site works packages were self-executed by the Group or undertaken by local Philippine sub-contractors under the direct management of the Company.

·; Well-funded at the year-end with cash at bank of £26.3 million.

·; Initial JORC compliant resource announced for the Malilibeg South mineralization containing 190,000 ozs of gold at 1.70 g/tAu.

·; Malilibeg South resource remains open along strike with further potential recognised.

·; Mr. Richard Williams stepped down from the Board as a Non-Executive Director and was replaced by Mr. Chris Whitehouse.

·; Mr. Jonathan Beardsworth stepped down from the Board as a Non-Executive Director and was not replaced.

·; The Group was awarded the prestigious 2012 Presidential Minerals Industry Environmental Award (Exploration Category) for the second year in succession.

In the period post 31 December 2012:

·; The decision was taken by the Board to 'self-execute' the design and construction of the processing plant using specialised contractors and sub-contractors to complete the works.

·; Forecast total capital expenditure, including the mobile mining fleet, of £112.8 million to deliver the Runruno project to production.

·; Major infrastructure components are almost complete and achieved within budget to date.

·; Malilibeg South resource area upgraded by 78.9% on the basis of additional drilling to a JORC compliant resource containing 340,000 ozs of gold at 1.4 g/t Au.

·; The total Runruno JORC compliant resource now contains 1.73 million ounces of gold at 1.63 g/t Au.

·; Commitments have been received from major shareholders to raise approximately £37.4 million (after expenses) via a share placing to fund the continued development of Runruno.

·; Shareholders offered an opportunity to participate via an Open Offer which could raise up to an additional €4.5 million.

·; Discussions with potential lenders begin to secure up to £43.3 million in debt funding to allow the full construction of Runruno and the acquisition of the mining fleet for post construction operations.

·; Debt facility negotiations are expected to be completed by the end of 2013.

CHAIRMAN'S STATEMENT

I am pleased to present Metals Exploration plc's (the 'Group') audited financial results and Annual Report for the year ended 31 December 2012. It is also my pleasure to report the progress and developments achieved by the Group throughout the year and including the period subsequent to the financial year-end.

Project Development

Early construction work on selected key infrastructure and access components continued apace throughout the period with considerable progress achieved. I expect to be in a position to confirm the completion of all early site works during the middle of 2013 which will allow the Runruno project to proceed seamlessly through to full construction. The early works comprise:

·; Construction of the processing plant pad,

·; Development of the site office, the main camp with lodgings, ablutions and mess hall,

·; Construction infrastructure comprising communications, site power and water distribution,

·; Erection of the first stage of the power line connecting the site to grid power and energising the lines,

·; Establishment of major on site and off site access roads,

·; Pioneering work to establish the stage one pit and associated haul roads,

·; Purchase and commissioning of the mining fleet.

Contracts for these important early site works packages were awarded to local Philippine sub-contractors or self-executed by the Group's site based work force.

Our plan is to 'self-execute' the design and construction of the processing plant using specialised contractors and sub-contractors to complete the works. As a result of this decision we terminated negotiations with Leighton Contractors (Asia) Limited which were associated with the plan to enter into an Engineering and Construct contract and a Procurement contract ('EC&P') for the design and construction of the Runruno processing plant.

The Group's achievement in bringing the Runruno project to the point where full development may proceed and the quality of the work undertaken in reaching that point is testament to the commitment and skills of the Group's management, employees, consultants and advisers.

Regional Exploration

Exploration activities for both gold and copper continued within the Runruno Financial or Technical Assistance Agreement ('FTAA') contract area during the period, with two diamond drilling rigs committed exclusively to the programme. The outstanding exploration highlight during this time was a 78.9% upgrade in the Inferred JORC Resource for the Malilibeg South area of an additional 340,000 ounces of gold at 1.4 g/t Au. The total Runruno 2012 JORC compliant mineral resource base now stands at 1.73 million ounces of gold at an average grade of 1.63 g/t Au comprising the Runruno main resource and Malilibeg South resource.

At Magnetite Creek located in the south of the Runruno FTAA contract area, previously reported drilling has confirmed the occurrence of anomalous porphyry copper-gold style mineralisation. An experienced geological consultant was hired to review these drill results and following deliberation he believes that the presence of alkaline-porphyry-related mineralisation within the FTAA area, indicates the potential for a copper-gold porphyry deposit to be present at depth and possibly beneath the Runruno main deposit.

Cash Position and Project Finance

The Group remains well funded with cash at bank of £26.3 million at the year-end and a further net amount of £37.4 million contractually committed in 2013 from its major shareholders, in exchange for issues of ordinary shares. We are seeking to raise up to £43.3 million in a debt instrument and plan to secure the instrument before the end of 2013. The combination of these two financing sources, our current cash reserves and a credit for the project capital works completed to date should be adequate funding for the full construction of the overall Runruno project. This augurs well for the Group and I am grateful for this support which will enable management to continue its strategy to develop value for the benefit of all of the shareholders.

Our Group audited results show an operating loss of £4,478,951 for the financial year just ended, which is broadly in line with the Group's expectations during the pre-production phase.

Board Changes

The Board of the Company has seen Mr Richard Williams step down as a Non-Executive Director and replaced with Mr Chris Whitehouse, and the retirement of Mr Jonathan Beardsworth who has not been replaced.

Government

During the first half of 2012 the Government of the Philippines released its Executive Order 79 (the 'Order') which relates to reforms in the mining sector. The Order is effectively a policy statement which points to reforms in the mining sector through a number of policies and guidelines aimed at promoting responsible mining through environmental performance, resource utilisation and a more equitable sharing of the economic benefits derived from mining. The Order upholds the dominance of national laws in managing the mining sector and we do not anticipate this will have a material or meaningful impact on the economics of the Runruno project because it is held under a FTAA, and the advice provided to the Group is that FTAA holders are minimally impacted.

Writ of Kalikasan

FCF Minerals Corporation ('FCF') and various Government agencies are defending themselves against an application for a Writ of Kalikasan ('WoK') and various other actions including a Temporary Environmental Protection Order ('TEPO'), through the Supreme Court and which is heard in the Court of Appeals. The Court has heard and denied the application for a TEPO which demonstrates the vexatious nature of the action and the applicant's abuse of court processes in bringing the action. Following the denial of the TEPO, FCF initiated a Strategic Law Suit Against Public Participation ('SLAPP') action against those who filed the WoK case on the basis that there were no valid or legal grounds for filing such case, and the main intent of the initiation of such a case was merely to frustrate FCF's operations. The Court granted FCF the application and has now heard the SLAPP matter, but remains to hand down its decision. We remain confident in the outcome.

Corporate Responsibility and Environment

Once again, I am delighted to report that the Group's Philippine subsidiary, FCF Minerals Corporation ('FCF'), was recognised for its environmental and rehabilitation work at Runruno and its community work in the host district after being recognised as an outstanding achiever at the 2012 Presidential Minerals Industry Environmental Awards by being awarded the 2012 Presidential Minerals Industry Environmental Award (Exploration Category) for the second year in succession. We have introduced key initiatives, including a Mining Forestation programme and the Greening Philippines programme which work with property owners to re-establish previously logged forests by planting large stands of native trees. To date, some 70,000 new native trees have been planted in the areas surrounding work areas and about one million coffee seedlings have been donated to several planting projects as part of the President's 'Greening the Philippines' project. In addition, FCF has rehabilitated and stabilised work areas in the Runruno FTAA contract area using best practice of introducing coconut fibre matting and planting of deep rooted grasses and shrubs.

The Company's safety culture on the Runruno project site is one I am proud of and which has achieved an outstanding 4.85 million man-hours without a lost time accident. This is a highly credible performance by all of the Company's employees.

I congratulate the efforts of everyone involved and acknowledge their continued dedication in the application of our social and environmental programs and safety culture.

Summary

2012 was another year of accomplishment with striking visible progress made on-site. We are on the cusp of full blown project development and I am excited by the prospect of 'self-executing' the construction of the process plant with the aid of a debt facility once acceptable terms are agreed. The Group will progress towards its main objective of gold production which will generate shareholder value. I would like to thank our shareholders, our personnel and employees for your continual support and I look forward to being in a position next year to update shareholders on the construction progress of the process plant.

I R Holzberger

Executive Chairman

22 May 2013

OPERATIONS REVIEW

Most of the work undertaken at Runruno during the year has been planning and developing infrastructure on and around the site designated for the gold recovery processing plant. The Group has been particularly successful self-managing various small construction packages and engaging with local Filipino contractors to undertake the completion of the works. Exploratory drilling has been maintained throughout the year in a limited capacity but has yielded some exciting results.

Runruno Gold-Molybdenum Project

A. Background information on the project

The Company's principal investment is in the barangay of Runruno located in the Province of Nueva Vizcaya on the central region of the Island of Luzon in the Republic of the Philippines. The capital city of the Philippines is Manila and Runruno is located 320km north of Manila by road access. The investment at Runruno is held by a 100% owned subsidiary company FCF Minerals Corporation ('FCF') which is a corporation duly incorporated, organized and validly subsisting under the laws of the Philippines whose primary purpose and business is to engage in mining operations. The Runruno project is FCF's main operation to date and FCF is the main operating company of the wider Metals Exploration plc group.

FCF agreed to enter into a Financial or Technical Assistance Agreement ('FTAA') with the Republic of the Philippines on 19 September 2009. The FTAA is a contract involving financial or technical assistance for large-scale exploration, development and utilization of mineral resources which has been particularly crafted for FCF and legalized in a document titled 'FTAA No. 04-2009-II' signed by the office of the President. Under the FTAA, FCF is deemed to be the Contractor to which a Contract Area of 3,091 hectares in Runruno has been designated to it such that FCF 'desires to join and assist the Government in the large-scale exploration, development and commercial utilization of Minerals in the Contract Area, for which purpose the Contractor desires to obtain the exclusive right to conduct Mining Operations therein'.

It should be noted that foreign corporations such as Metals Exploration plc investing in the Philippines are not entitled to hold in excess of 40% ownership of land or property in the Philippines. However, FCF has been officially approved as a 'Qualified Person' to hold an FTAA which makes it is possible for Metals Exploration plc to own and invest in the project by virtue of controlled ownership of FCF.

Having secured the FTAA contract, FCF undertook the processes necessary to comply with all of the requirements which would allow it to be able to execute mining operations. These comprised but were not limited to environmental compliance, health & safety compliance, mining operation & planning compliance, and land rehabilitation planning. A requirement in the FTAA is for FCF to submit written notification to the Mines and Geosciences Bureau ('MGB'), a department of the Department of Environment and Natural Resources ('DENR'), detailing the technical and commercial feasibility of mining and processing to produce gold from the Runruno area. It was with great satisfaction that the Group received from the Secretary of the DENR the approval of the Runruno Declaration of Mining Project Feasibility ('DMPF') on 20 October 2011, allowing FCF to advance development into construction and thereafter to commercial recovery of gold.

The DMPF is the authority allowing FCF to design and construct the processing plant at Runruno and the Board of Directors agreed that as of 1 December 2011 the Company is authorized to raise the required additional finance for the construction of the processing plant, infrastructure and ancillary buildings which will bring the Company into commercial production. Step-out drilling operations would continue at Runruno with the objective of tracking the gold deposits south of the pit and in other strategic areas of interest.

B. Estimated cash requirements

The total capital expenditure budget is summarized as follows:

In addition it is forecast that working capital requirements through to commencement of commercial gold recovery will estimate at £5million.

The sources of funding currently available and projected to be available are summarised as follows:

This provides for a funding shortfall of £27.5 million which in addition to working capital and general operating costs, contingency, and capitalised interest costs pre-positive cash flows after production, will be sourced through a debt funding instrument of up to £43.3million. With a healthy debt to equity ratio forecast of 24:76 at the point of drawing debt funds down, the Company is confident of securing a sufficient level of debt funding by the end of 2013.

C. Early construction works at Runruno

As at 31 December 2012 the Company had expended about £13.8 million on early construction works at Runruno executing various board approved works packages using local Filipino contractors and workforce. £9 million was committed (mining fleet) but not yet acquired as of 31 December 2012. The early works have concentrated on readying the site for the main construction project, building the infrastructure which will be required before, during and after the construction of the process plant is underway. Payment of these packages is entirely funded by shareholders' equity.

1. Access roads

The nearest township to the barangay of Runruno is Solano which has excellent national highway access. Runruno is 25km north of Solano and can be easily reached via a partly sealed national road. Some parts of this road have been upgraded by FCF and a 12km stretch of the road to Runruno has been fully sheeted by placing and compacting crushed rock on the platform, a new all-weather surface established and the roadside drainage improved. The remaining 16km of the road is concrete paved and in excellent condition.

A further stage of upgrade involving the realignment of a number of road curves to allow wide bodied and heavy trailers to traverse safely, has commenced. In addition, the Department of Public Works and Highways ('DWPH') is also working to upgrade and maintain the standard of the road. The DWPH is replacing a weak and narrow bridge and extending the concrete surface by a further 1.5km from its annual budget. This work is well advanced and is due for completion in May 2013 and will coincide with an increase of traffic carrying heavy equipment to site.

In general terms, the road access to site is of a very high quality and will be maintained to a high standard for the benefit of several communities whose boundary shares the national road and from which our project will also benefit.

Access roads in and around the site area have been upgraded, widened, strengthened and new access roads designed, pioneered and completed in readiness for the main construction phase. This has included strengthening and making safer various sections of the Sulong river and its banks which runs through Runruno. Gabion baskets have been positioned at strategic points and bends and over long stretches of the river's banks to provide protection for the roads and process site against flooding and soil erosion. The local community will share a great benefit from this land improvement works.

2. Site preparation and establishment

Work has been ongoing since December 2011 but primarily throughout 2012 to prepare and establish the physical site in readiness for the construction of the main processing plant and ancillary buildings. A local Philippines contractor was engaged to carry out this works and the site is currently ready for the main construction phase. The processing plant earthworks are now complete and the pad has been independently verified as having met or exceeded the required design criteria and load bearing capacity.

3. Construction camp and site office

The site office has been constructed with the top floor fully completed and the bottom floor being fitted-out ready for the Construction Project team, Information Technology team, site Finance and Administration team and site management to take occupancy.

The construction camp and messing facilities are near completion The camp is designed to accommodate 700 personnel and at the peak of construction to feed in excess of 1,000 personnel. The internal construction is a stud partition construction designed for ease of dismantling and internal redesign, after the heavy population density period of construction has been completed.

4. Power

Power will be supplied to the project from the Philippine National Grid system and work to connect with the Bayambong switch yard is well underway. A 69kV overhead power line connecting the switchyard to the mine site is being constructed in two stages;

i. from Maddiangat to Runruno, a distance of 22km, and

ii. from Bayambong to Maddiangat, a distance of 15km.

Stage one is expected to be complete before the end of Q2 2013. The early completion of this link will provide access to grid power initially at 13.9 kV until stage two is completed and the primary grid connection is established.

Connection to the grid will have a material reduction in the cost of power to the project during the construction phase compared to diesel fuel.

A power supply switchyard area has been established within the location of the processing plant area, which will supply power for the construction phase and be available thereafter in commercial production. Two 1,000 kVA generator sets have been installed and overhead power lines and junction boxes established around the processing plant site to support construction. The generating capacity has also been reticulated to the camp and office complex. In the coming weeks the facility will be permanently connected to the national grid and generators will be on stand-by and act as back-up supply support. Several local communities and barangays will benefit from the Company's investment through a more reliable local supply of national grid electricity.

5. Potable water system

A potable water system drawing water from the Lintugan River is nearing completion. This involves laying a 3.2km stretch with pipe from the river to a weir and pump house at the project site. The weir, pump house and processing facilities will be finished in the coming weeks and in addition to supplying the project requirements, potable water will be made available to the Runruno town residents to replace the current raw water sources used for domestic supply.

6. Batch Plant

In preparation for the main construction project the Group invested in the procurement of a batch plant to produce concrete in real-time throughout the construction phase. It is estimated up to 15,000 cubic metres of concrete will be consumed across the project with 11,000 cubic meters being consumed in the construction of the process plant. The batch plant will also allow the Group to maintain the access roads to a high standard and complete the construction of other permanent buildings.

7. Mine access

The primary haul road from the run of mine pad (ROM) area to the starter pit has been established to a 1:10 grade and 20m road width, and work has recently commenced to cut a road from the starter pit to the tailings storage facility. This includes the construction of a permanent crossing across the Sulong River to facilitate the tailings to be transported from the processing plant as safely and efficiently as possible. The construction of the crossing is nearing completion. The Lands and Community department has been successful in closing down a number of the illegal small scale mining operations in and around the mining area and good progress is being achieved with the remainder. Mining in the starter pit area has shown the ground conditions to be excellent with the exposed rock faces standing up at design angles.

D. Mining equipment

The decision to advance the acquisition of the mining fleet was agreed at board level and the brand of choice is the Japanese Komatsu equipment. Komatsu have a predominant presence in the Philippine surface mining industry. The equipment is supported by the manufacturer's national distributor who provides after-sales and maintenance services. The lengthening manufacturing lead time was one of the main reasons for deciding to purchase these pieces of equipment and from an economic perspective it was advantageous to purchase these outright rather than lease. The equipment is now delivered to site and is being assembled and commissioned. A three month training programme for the operators will be undertaken once the equipment is handed over to the Group. It is expected that the equipment will be commissioned productively by the end of August 2013.The package comprises the following specific models and quantities; six HD785-7 rigid dump trucks, one PC2000-8 hydraulic excavator, one PC1250-8 hydraulic excavator, two D457A-5 bulldozers, and one GD825-A motor grader. These will be complemented by one WA600-6 wheel loader at a later date yet to be determined.

Once assembled, commissioned and operational they will make a welcome addition to the growing ensemble at site in Runruno.

E. Environment

The Company follows the World Bank Guidelines and the Equator Principles in all aspects of its environmental and community related work.

The Group supports and makes donations to the Runruno Livelihood Foundation, a non-profit organization, with an experienced community relations personnel, who work closely with the local communities to introduce and promote sustainable health, life and business development programs for the benefit of these communities. The proposed development at Runruno is supported by all impacted local communities.

The Metals Exploration Group of Companies continued to receive a number of awards across the year for its environment, social, community and occupational health and safety programs. The highlight of the year was being awarded the prestigious 2012 Presidential Mineral Industry Environment Award (Exploration Category) for a second successive year. This award demonstrates the Group's achievements in implementing responsible mining practices, its excellent environmental performance and establishing a zero harm culture. At the date of this report the Group had achieved a highly credible 4.85 million man-hours without a lost time accident.

F. Runruno Exploration

Exploration within the Runruno FTAA continued throughout the year with some success in the Malilibeg South area where a mineral resource containing up to 340,000 ounces of gold at 1.4 g/t Au has been estimated. The program consisted of ground mapping, geochemistry, surface sampling, airborne and ground geophysics and diamond drilling designed to test the area for further gold mineralisation of the Runruno style, and to assess for the potential of porphyry copper mineralisation. This program has continued into 2013.

The work completed in 2012 focused on the Malilibeg South gold resource area and on the Magnetite Creek target. Preliminary testing of a number of other targets in the FTAA area confirmed their potential for addition mineral resources. A total of 42 holes were drilled in 2012 within the Runruno FTAA contract area totalling 13,200 metres.

Runruno - Malilibeg South

Diamond drilling south of the proposed Runruno open pit continued to test the exploration model of a wide flat-dipping mineralised structure at depth. Drilling has confirmed that a westerly dipping zone (10-13 metres thick) of flatly dipping gold and molybdenum mineralisation is continuous between the main Runruno resource in the north and the southern extent of the current drilling some 650metres.

The results of all of the completed diamond drill holes drilled into and proximal to the mineralised zone as of 31 March 2013 have now been incorporated into the geological model and Mining Associates Pty Limited were retained to re-estimate the mineral resource.

The JORC 2012 categorised Mineral Resource for the Malilibeg South deposit has been classified in the inferred confidence category on a spatial, areal and zonal basis and is summarised in the following table which must be read in conjunction with the complete table presented on page 10 of this report and together with Appendix 1 of Table 1 of the 'Runruno Project, Malilibeg South Resource' report prepared by Mining Associates Pty Limited and which can be found on the company's website http://www.metalsexploration.com/company-news.html.

Runruno - Magnetite Creek

Drill testing in the Magnetite Creek area, 2km south-east of Runruno, intersected a number of zones of copper and gold mineralisation associated with the brecciated parts of a west-dipping north westerly-trending monzonite-monzodiorite intrusive.

A geological consultant experienced in porphyry copper-gold deposits retained to review the results of the work, confirmed that the prospect hosts alkaline porphyry copper-gold mineralisation similar to that being developed at the nearby Didipio copper-gold deposit. He was of the opinion that drilling completed and analysed to date had shown that the mineralisation occurred in restricted zones probably linked to individual monzonite and syenite intrusions. This interpretation lessened the potential at Magnetite Creek for a large scale open-pittable copper-gold deposit close to the surface. However, he considers that the presence of alkaline-porphyry-related mineralisation at Magnetite Creek makes the entire Runruno FTAA area highly prospective for similar styles of mineralisation. In particular he highlighted the potential for a copper-gold porphyry deposit to be present at depth beneath the main Runruno deposit. This target will be tested more thoroughly during 2013.

G. Regional Exploration

Regional exploration activities in the southern part of the FTAA area included creek and profile and ridge mapping, trenching and geochemical sampling.

A northerly-trending zone, 500m in length, of coincident gold, molybdenum and arsenic anomalism has been outlined from a soil geochemical sampling program covering an area in excess of 1.3 sq.km in the Malong/Burnt Tree area, south east of the FTAA contract area. Samples were collected at 50m intervals along lines spaced at 200m. Maximum reported values in the soils were 0.41 ppm Au, 543 ppm Mo, and 98 ppm As. Follow-up trenching activities are being undertaken.

Test drilling of geophysical anomalies commenced in the Cabinuangan-Cabocbocan area of the FTAA with early indications of a zone of gold and molybdenum anomalism. This area will be further tested during 2013.

H. Mineral Reserves and Resources

In March 2011, the Runruno resource was updated to 1.39Moz of gold, and 25.6Mlb of molybdenum, with 1,050,000oz gold reporting to the Measured and Indicated categories and 900,000oz gold within the Mining Proven & Probable Reserve category. This resource estimate was updated in March 2011 to include all drill holes completed and assays returned by the end of December 2010, comprising 807 drill holes for a total of 110,427m. The combined Measured and Indicated resource containing 1,050,000oz gold comprises 75% of the total resource.

Notes to accompany the resource estimate:

1. The tenement holder is FCF Minerals Corp ('FCF').

2. Metals Ex owns 100% of FCF.

3. Resource estimate based on all drillholes completed and assays returned by 31 December 2010. The resource was estimated on the basis of 807 drillholes (110,427 metres) consisting of 485 diamond drillholes (65,517 metres) and 322 RC drillholes (45,911metres).

4. All analyses undertaken by Intertek, an internationally accredited independent laboratory.

5. Gold analysis by classical 1kg screen fire assay analysis.

6. Molybdenum analysis by mixed acid digest and ICP-OES.

7. Block model block sizes selection of XYZ 20x20x5m is based on Kriging Neighbourhood Analysis as reported in November 2009. Sub-blocking for volumes only to 5x5x1.25m. Screened for topography by sub-block.

8. Geological resource constrained by sub-block with 86 wireframes in 13 domains based on lithology, structure, alteration, artisanal surface workings and a minimum sample grade of 0.3 g/t Au, includes minor internal dilution. Each sub-block can only belong to one domain.

9. Drill intercepts within each domain flagged in a database table and composited to 2m downhole giving 6,439 informing samples from 687 drillholes.

10. A gold grade cap was applied to informing composites to remove minor outliers Of the 20 composites capped to 12 g/t Au the maximum uncapped grade was 39.14 g/t Au. No grade cap was applied to molybdenum grades.

11. Routine bulk density measurements show little variation within rock types. An average bulk density based on rock type and oxidation state was assigned to resource model based on interpreted geological units and oxidation state.

12. Grade interpolated into a constrained block model by domain using Ordinary Krige estimation in 4 passes with parameters based on variography by domain. Estimates validated against informing samples and with nearest neighbour and inverse distance squared block estimation.

13. Resources have been classified in compliance with the JORC Code as Measured, Indicated and Inferred. Categories allocated by block by domain, based on drill spacing and type, number of informing samples, fill pass and Krige estimate confidence.

14. Lower cut off grade of 0.3g/t gold applied to blocks in reporting the resource estimates.

15. Molybdenum grades are reported along with the gold grades by resource categories but a consistent laboratory bias low in molybdenum assay standards of about 20% is recognised by FCF but has as yet not been addressed.

The Mineral Resource block model was interrogated using Whittle Optimization and FCF estimated costs and using a gold price of US$1,000/oz, to produce a set of pit shells and hence detailed mine design and production schedule as shown in the table and notes below. A small portion of the Inferred Mineral Resource is contained within this final pit shell and included in the production schedule and is also reported here with allowance for mining loss and dilution. The Inferred Mineral Resources estimates stated here are additional to the Ore Reserves but have not been aggregated with them as this not allowed under the JORC code.

Notes to accompany ore reserve statement:

1. Stated Inferred Resource is not included in reserves and is in addition to reserves within the defined pit limits and is included in the planned production schedule with a 5% mining loss applied.

2. The tenement holder is FCF Minerals Corp ('FCF'). Metals Ex currently holds 100% of FCF.

3. Reserve estimate are derived from the March 2011 MA Resource Estimate by application of Modifying Factors.

4. Cut-off grade of 0.3 g/tAu

5. Optimisation for final pit selection using Whittle Global Optimiser and following parameters.

a. Maximum material movement of 13Mtpa

b. Target of 1.75Mtpa delivered to mill

c. Mining Ore loss of 5%, Mining Dilution included in the resource estimates.

d. Mining costs varied by region from US$1.11 to US$1.22/tonne

e. Processing Costs of US$14.45/tonne milled

f. Period Costs (including mining period costs) of US$2.25/t milled

g. Gold recovery of 90.4%

h. Gold Price used of US$1,000/ ounce

i. No value or process costs attributed to the Molybdenum

j. A discount rate of 10% pa for DCF and NPV

6. Scheduling of production using GemcomMinesched within final Pit Shell.

The information in this report which relates to Mineral Resources and Ore Reserves is based on information compiled by Mr Andrew Vigar, who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Vigar is an employee of Mining Associates Pty Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaken to qualify as a 'Competent Person' as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Vigar consents to the inclusion in this report of the matters based on this information in the form and context in which it appears.

Summary Notes to accompany Malilibeg South Inferred Resource estimate

1. This information should be read in conjunction with Appendix 1, Table 1 of the report 'Runruno Project , Malilibeg South Resource' prepared by Mining Associates which can be found on the Company's website as an Appendix to the Operational Update.

2. The Runruno Project is located in the Nueva Viscaya Province, Philippines.

3. The Runruno project is operated by FCF Minerals Corporation ('FCF') under a Financial or Technical Assistance Agreement ('FTAA') No 4-2009-II.

4. FCF is a Philippine incorporated company and a subsidiary of AIM (London) listed Metals Exploration plc ('MetalsEx'). MetalsEx owns 100% of FCF

5. The resource estimate is based on diamond drilling results and assays received to the end of December 2012 in an area to the south of the existing Runruno resource.

6. Mineralisation style and lithologies are similar to the main Runruno deposit and drill holes have intersected the mineralised structures at depths predicted by the geological model.

7. A total of 30 diamond drillholes (7,220m) have been used to inform the estimate

8. All analyses undertaken by Intertek, an internationally accredited independent laboratory.

9. Gold analysis by classical 1kg screen fire assay analysis.

10. Molybdenum analysis by mixed acid digest and ICP-OES

11. Block model estimation block sizes of XYZ 20x20x5m. Sub-blocking for volumes only to 5x5x1.25m. Screened for topography by sub-block.

12. Geological model constrained by sub-block with 4 domains based on lithology, structure, alteration, and a minimum sample grade of 0.3 g/t Au, includes minor internal dilution. Each sub-block can only belong to one domain.

13. Drill intercepts within each domain flagged in a database table and composited 2m downhole giving 256 informing samples from 30 drillholes.

14. A gold grade cap was applied to informing 2 metre composites to remove minor outliers. Only the main structure had sufficient intercepts to determine a suitable grade capping strategy. Gold was capped at 9.5g/t (99.5%ile) and molybdenum was capped at 7090ppm (98%ile).

15. Routine bulk density measurements undertaken on drill core by FCF show that it varies mainly according to weathering (fresh, transition, and oxidised) and lithology (crystal lithic tuff, tephrite porphyry, monzonite).

16. Grade interpolated into a constrained block model by domain using Ordinary Krige estimation in 2 passes with parameters based on variography by domain. Estimates validated against informing samples and with nearest neighbour and inverse distance squared block estimation on a global basis and by swath plots.

17. Resources have been classified in compliance with the JORC Code as Inferred. Geological evidence is sufficient to assume geological continuity. The drill density is insufficient to assure grade continuity though it is assumed and is based on limited sampling.

18. Lower cut-off grade of 0.5g/t gold applied to blocks in reporting the resource estimates.

19. Molybdenum grades are reported along with the gold grades by resource categories but a consistent laboratory bias low in molybdenum assay standards of 12% to 20% is recognised by FCF but has as yet not been addressed.

20. Drilling, logging, sampling, and assaying techniques used were similar to those used to produce the Runruno deposit resource and reserve estimate of March 2011.

21. Routine bulk density measurements (which show little variation according to oxidation state or lithology) were undertaken on drill core by FCF. The bulk density of 2.5 used for tonnage estimates was the same as that used to produce the Runruno resource and reserve estimate of March 2011.

The information in this report that relates to Mineral Resources and Ore Reserves is based on information compiled by Ian Taylor, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Taylor is an employee of Mining Associates Pty Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Taylor consents to the inclusion in this report of the matters based on this information in the form and context in which it appears.

CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME for the year ended 31DECEMBER 2012

The Company has taken advantage of the exemption provided under section 408 of Companies Act 2006not to publish an income statement. The loss for the year ended 31 December 2012dealt with in the financial statements of the Company was £2,833,516(2011:£1,693,064).The Company made no gains or losses which would be reported in other comprehensive income in the year ended 31 December 2012(2011: £nil) and therefore the Company has not published its statement of total comprehensive income.

CONSOLIDATED BALANCE SHEET as at 31 DECEMBER 2012

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 DECEMBER 2012

Equity is the aggregate of the following:

·; Share capital; being the nominal value of shares issued

·; Share premium account; being the excess received over the nominal value of shares issued less direct issue costs

·; Shares to be issued reserve; being the credit side of the entry relating to the expense recognised in the Statement of Total Comprehensive Income for share based remuneration

·; Translation reserve; being the foreign exchange differences on the translation of foreign subsidiaries

·; Profit and loss account; being the cumulative loss attributable to equity shareholders

·; Acquisition of non-controlling interests reserve; being an acquisition in 2011 of 15% of FCF Minerals Corporation's shares after previous acquisitions which had provided the Group with control of the board of the subsidiary company. FCF Minerals Corporation is now 100% owned by Metals Exploration plc. following this 15% acquisition.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 DECEMBER 2011

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 DECEMBER 2012

NOTES

9. Loss per share

Annual report and accounts

A copy of the annual report and accounts will be sent to shareholders shortly and will also be available from the Company's registered office, 200 Strand, London, WC2R 1DJ, and on the Company's website: www.metalsexploration.com. Notice of an annual general meeting of the Company to be held at 11:00 a.m. on 19 June 2013 will be posted together with the annual report and financial statements.

Financial information

The financial information set out in this announcement does not comprise the Group's statutory accounts for the year ended 31 December 2012 or for the year ended 31 December 2011.

The financial information has been extracted from the statutory accounts of the Group for the year ended 31 December 2012 and the year ended 31 December 2011. The auditors reported on these accounts. Their reports were unqualified and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.

The statutory accounts for the year ended 31 December 2011 have been delivered to the Registrar of Companies, whereas those for the year ended 31 December 2012 will be delivered to the Registrar of Companies following the Company's annual general meeting.

This is a summary of the Operations Review and a more complete version is included in the Annual Report.

For further information, please contact:

Metals Exploration PLC

Ian R. Holzberger +44 (0)207 963 9540

(Executive Chairman) +61 (0)418 886 165

+63 (0)9189 795 992

Liam A. Ruddy +61 (0) 498 648 615

(Company Secretary) +44 (0)7911 719960

Nominated Adviser

Westhouse Securities Ltd

Martin Davison

Paul Gillam +44 (0) 207 601 6100

Broker

SP Angel Corporate Finance LLP

Ewan Leggat

Katy Birkin +44 (0) 203 463 2260

Public Relations

Tavistock Communications

Edward Portman

Jos Simson +44 (0) 207 920 3150