Metals Exploration Regulatory News (MTL)

28 September 2015

METALS EXPLORATION PLC

(the "Company" or "Metals Exploration")

OPEN OFFER CIRCULAR POSTED TO SHAREHOLDERS

AND NOTICE OF GENERAL MEETING

As previously announced on 18 September 2015, the Directors of Metals Exploration are pleased to initiate an Open Offer (the "Open Offer") to eligible shareholders to raise up to approximately €4.2 million (£3.0 million) via the issue of up to 100 million new ordinary shares of 1 pence each in the Company (the "Open Offer Shares") at a price of 3 pence per new ordinary share. Those shareholders that participated in the recent $5.0 million (£3.2 million) share placing have agreed to provide the Company with irrevocable undertakings not to take up their respective rights under the Open Offer. Discussions have advanced to the documentation stage with the three substantial shareholders of the Company to raise up to US $5.0 million (£3.2 million) through the issue of Debt Securities, which proceeds will provide working capital and contingency funding through to commencement of commercial operations, if required.

A circular is being posted to Shareholders today setting out in more detail the background to and reasons for the Open Offer and its terms.

1 Introduction

On 18 September 2015, the Company announced that it had obtained commitments to raise approximately US$5 million (before expenses) via the issue of a total of 108,033,333 new Ordinary Shares at a price of 3 pence per new Ordinary Share, from certain existing shareholders. It was also announced that the Board wished to provide the Company's existing shareholders with the opportunity to subscribe for Ordinary Shares at the same price as the Subscribers invested at under the Placing. Accordingly the Company is making available 100 million new Ordinary Shares under the Open Offer at the Offer Price.

The purpose of this announcement is, amongst other things, to provide you with details of the Open Offer, to outline the background to and the reasons for the Open Offer.

The terms of the Open Offer are described in this announcement. Qualifying Shareholders may subscribe for Open Offer Shares above their basic entitlement under the Open Offer if they so wish, by use of the Excess Application Facility.

The Open Offer is conditional, inter alia, upon Admission and also upon the passing by Shareholders of the Resolutions at the General Meeting which will give the Directors the necessary authorities to allot and issue the Open Offer Shares and to dis-apply statutory pre-emption rights in respect of the allotment of the Open Offer Shares.

2 Background to and reasons for the Open Offer and Use of Proceeds

2.1 As announced on 18 September 2015, the Company commenced the staged commissioning of the Runruno Processing Plant in July 2015. This work has progressed satisfactorily but is limited in scope pending the issue of a significant number of operational and occupancy permits by the respective Philippine regulatory authorities. Without the required permits the Company cannot complete the full commissioning of the equipment within the Processing Plant and without obtaining all of the permits it cannot commence operations.

2.2 The construction of the Process Plant is completed and the construction of the Residual Storage Impoundment ("RSI") and its infrastructure will be completed before the end of September 2015.

2.3 In conjunction with the Placing, the Company will seek to raise up to a further US $5.0 million via through the creation and issue of Debt Securities and it is expected that the Debt Securities will be available to be drawn before 31 October 2015. Debt Securities are intended as a contingency instrument should the permitting process delay the Runruno Project entering into commercial operations during October 2015. There is no certainty as to how long the permitting process may take and neither is there any reason to believe the Company will not obtain all required and necessary permits. The Company is in close contact with the various permitting authorities but it is not in control of the speed at which the authorities process the documentation submitted, and issue the requisite permits.

2.4 The Company expects that following receipt of funds from the Placing and the issue of the proposed Debt Securities, it will have in place sufficient capital to complete the commissioning of the Process Plant & RSI at its Runruno Project and until it commences operations through to realising self sustaining cash flow.

2.5 The combination of the Placing and the issue of the proposed Debt Securities should fully fund the Runruno Project and therefore receipt of funds from the Open Offer is not critical to complete the commissioning of the Process Plant & RSI at its Runruno Project and until it commences operations through to realising self sustaining cash flow.

2.6 Notwithstanding the above and regardless of the take up of the Open Offer, the Board are delighted to afford all Qualifying Shareholders the opportunity to increase their shareholding in the Company at a time when the Company has already benefitted from the considerable financial support of the Subscribers on equivalent terms.

3 Details of the Open Offer

The Company is making an Open Offer to Qualifying Shareholders on a pre-emptive basis.

The Company is not relying on this equity for its funding requirements and is making this facility available to any minority shareholders who wish to increase their investment in the Company. Each of the Subscribers who are participating in the Placing has waived its rights respectively to take up any Open Offer Shares.

The proposed Offer Price of 3 pence per Open Offer Share is the same price as the price at which the Placing Shares have been issued. However, the Open Offer is not conditional upon completion of the Placing or the level of applications made to subscribe under the Open Offer.

Qualifying Shareholders are invited to apply for Open Offer Shares under the Open Offer at a price of 3 pence per Open Offer Share, payable in full on application and free of all expenses, pro rata to their existing shareholdings on the basis of:

100 Open Offer Shares for every 255 Existing Ordinary Shares

held at the Record Date and so in proportion for any other number of Existing Ordinary Shares then held. Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Open Offer Shares.

The Open Offer is subject to the satisfaction, amongst other matters, of Admission occurring on or about 29 October 2015, (or such later date, being not later than 16 November 2015, as the Company may decide).

The Open Offer Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares and the Placing Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission.

Subject to the fulfilment of the conditions set out in the Open Offer document, the Open Offer has been structured so as to allow Qualifying Shareholders to subscribe for Ordinary Shares at the Open Offer price as close to pro rata to their existing holdings as possible. Fractional entitlements will not be allotted to Qualifying Shareholders in the Open Offer, and where applicable, entitlements under the Open Offer will be rounded down to the nearest whole number of new Ordinary Shares.

Qualifying Shareholders at the Record Date may, in addition, make applications in excess of their pro rata initial entitlement. Once subscriptions under the Open Offer Entitlements have been satisfied, the Company shall, in its absolute discretion, determine whether to meet any excess applications in full or in part, and no assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full or in part or at all. To the extent that additional Open Offer Shares are not subscribed by existing Shareholders, Open Offer entitlements will lapse.

Excess applications will be rejected if and to the extent that acceptance would result in the Qualifying Shareholder, together with those acting in concert with him/her/it for the purpose of the Code, holding 30 per cent. or more of the issued share capital immediately following Admission.

Qualifying Shareholders should note that the Open Offer is not a rights issue. Qualifying non-CREST Shareholders should be aware that the Application Form which accompanies the open offer document is not a negotiable document and cannot be traded. Qualifying Shareholders should also be aware that, in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer, but will be made available under the Excess Application Facility and the net proceeds will be retained for the benefit of the Company.

Settlement and dealings

Application will be made to the London Stock Exchange for the Open Offer Shares to be admitted to trading on AIM. It is expected that such Admission will become effective and that dealings will commence on or about 29 October 2015.

The Open Offer Shares will, when issued, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive dividends and other distributions declared following Admission.

Overseas Shareholders

Certain Overseas Shareholders may not be permitted to subscribe for Open Offer Shares pursuant to the Open Offer and should refer to paragraph 6 of Part 2 of the Open Offer document.

4 Action to be taken in respect of the Open Offer

Qualifying non-CREST Shareholders will find an Application Form accompanying the circular which gives details of their Open Offer Entitlement (i.e. the number of Open Offer Shares allocated to the Qualifying non-CREST Shareholders). If this shareholder wishes to apply for Open Offer Shares under the Open Offer, he should complete the Application Form in accordance with the procedure set out at paragraph 3 of Part 2 of the Open Offer document and on the Application Form itself and deliver it by post or by hand (during normal business hours only), together with payment in full in respect of the number of Open Offer Shares applied for to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU so as to arrive as soon as possible and in any event so as to be received no later than 11.00 a.m. on 23 October 2015, having first read carefully Part 2 of the Open Offer document and the contents of the Application Form. Qualifying CREST Shareholders will receive a credit to their appropriate stock account in CREST in respect of their Open Offer Entitlement and should refer to the procedure set out at paragraph 3(ii) of Part 2 of the open Offer document.

The latest time for applications to be received under the Open Offer is 11.00 a.m. on 23 October 2015. The procedure for application and payment depends on whether, at the time at which application and payment is made, qualifying shareholders have an Application Form in respect of their Open Offer Entitlement or their Open Offer Entitlement has been credited to their stock account in CREST. The procedures for application and payment are set out in Part 2 of the Open Offer document. Further details also appear on the accompanying Application Form which has been sent to Qualifying Shareholders. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with the Open Offer document and the Open Offer.

5 General Meeting

5.1 A notice convening a General Meeting of the Company is included in the Open Offer document to be held at 200 Strand, London WC2R 1DJ at 10.00 a.m. on 15 October 2015.

5.2 In order for the Open Offer to proceed, Shareholders will need to approve Resolutions 1 and 2 set out in the notice of General Meeting. If Resolutions 1 and 2 are not passed, the Open Offer will not proceed in the form currently envisaged. Accordingly it is important that Shareholders vote in favour of Resolutions 1 and 2 in order for the Open Offer to proceed.

5.3 The shareholder authorities granted to the Directors at this year's annual general meeting of the Company have been used in full to issue the Placing Shares. Therefore the Board consider it prudent to renew these authorities at the forthcoming General Meeting. Such authorities will expire at the next annual general meeting of the Company.

6 Action to be taken in respect of the General Meeting

6.1 Whether or not shareholders propose to attend the General Meeting in person, they are strongly encouraged to complete, sign and return their Form of Proxy in accordance with the instructions printed thereon as soon as possible, but in any event so as to be received, by post or, during normal business hours only, by hand, at PXS, 34 Beckenham Road, Beckenham BR3 4TU by no later than 10:00 a.m on 13 October 2015 (or, in the case of an adjournment of the General Meeting, not later than 48 hours before the time fixed for the holding of the adjourned meeting).

6.2 If shareholders hold their shares in the Company in uncertificated form (that is, in CREST) they may vote using the CREST Proxy Voting service in accordance with the procedures set out in the CREST Manual (please also refer to the accompanying notes to the Notice of the General Meeting set out at the end of this document). Proxies submitted via CREST must be received by the Company's agent [(ID RA10)] by no later than 10:00 a.m. on 13 October 2015 (or, in the case of an adjournment, not later than 48 hours before the time fixed for the holding of the adjourned meeting).

6.3 This will enable shareholders votes to be counted at the General Meeting in the event of a shareholders absence. The completion and return of the Form of Proxy or the use of the CREST Proxy Voting service will not prevent shareholders from attending and voting at the General Meeting, or any adjournment thereof, in person should they wish to do so.

7 Open Offer Statistics

Conversion rates used in this document (unless otherwise indicated) are set out as follows:

 EUR 1.3607:£1, USD 1.54273:£1, GBP 0.7349: 1 EUR

Source: www.oanda.com on 14 September 2015 at 6pm UK time

8 Expected Timetable of Principal Events

Save for the date of publication of this document, each of the times and dates above are subject to change. Any such change, including any consequential change in the Open Offer statistics above, will be notified to Shareholders by an announcement on a Regulatory Information Service.

Notes:

Statistics are prepared on the basis that all of the Open Offer Shares are subscribed for and that no new Ordinary Shares (other than the Open Offer Shares) are issued following the date of this document and before the completion of the Open Offer.

DEFINITIONS

The following definitions apply throughout this document unless the context otherwise requires:

A reference to £ is to pounds sterling, being the lawful currency of the UK.

A reference to EUR is to Euros, being the official currency of the Eurozone.

Save for the date of publication of this document, each of the times and dates above are subject to change. Any such change, including any consequential change in the Open Offer statistics above, will be notified to Shareholders by an announcement on a Regulatory Information Service.

For further information please visit: www.metalsexploration.com or contact:

Metals Exploration PLC info@metalsexploration.com