METALS EXPLORATION PLC

FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014

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 audited results for the year ended 31 December 2014.
Highlights during the reporting period:
Entered into a Facility Agreement with two international resource banks and signed commercial terms in May 2014 for a US $83 million debt funding package. The debt package concluded the Runruno project financing and funded construction of the Gold Process Plant and Residual Storage Impoundment ('RSI').

 Completed a successful reorganisation of the MTL Group to fulfil a condition of the Facility

Agreement.

 Received a 'special tree cutting permit' to enable the construction of the RSI.

 The construction team achieved over 1.2 million man‐hours without a lost time incident.

 Entered into a power supply agreement in October 2014 with a major Philippines electricity provider to take electricity from the national grid.

 The electricity switchyard at the mine site was certified by the Philippine Energy Regulatory

Commission in December 2014.

 Total capital costs of project construction remained within budget.

 Maintained ongoing support for community programmes and environmental responsibilities.

 Mr Chris Whitehouse stepped down from the Board of Directors as a Non‐Executive Director in December 2014.

Highlights post the reporting period:

 Mr Lucian Eduard Simovici joined the Board of Directors as a Non‐Executive Director in

January 2015.

 In February 2015, the National Grid Corporation of the Philippines commissioned and energised the 69KV power lines. The Project is now drawing power directly from the national grid.

 All major packages for equipment, services and civil construction have been awarded.

 Construction of the Process Plant stands at 82% complete as of May 2015. Commissioning of the Process Plant planned to commence in June 2015 with ore commissioning due to begin in early Q3 2015.

 Discussions commenced with refineries for treating the doré produced at site.

 Commissioning, ramp up and operational readiness planning and preparation is well advanced.

 A mini operations plant has been constructed and commissioned for in‐house training and testing of the BIOX® liberation process.

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CHAIRMAN'S STATEMENT

Dear Shareholder,
It is with great pleasure that I present Metals Exploration plc's tenth set of audited financial results. The latest set of results cover the 12 month period up to 31 December 2014. In the Strategic Report you will find a review of progress and developments for the Group covering the year ended 31 December 2014 and period subsequent to the financial year‐end.
2014 was another year of significant and progressive development of the mine site and the Group is now on the cusp of transforming itself from an exploration company into a mining company with first gold pour expected later this year. Realising the tangible benefits of the investments, which commenced on 22 October
2004 when the Company was admitted to trading on AIM, is now tantalisingly close for all stakeholders in the
Group.
It is well documented how difficult, expensive and time consuming it is to explore, discover and refine exploration programmes to ultimately bring a mining project into production. I am proud to advise that FCF Minerals Corporation's Runruno Gold‐Molybdenum project will be in a position to begin commercial operations during 2015 after an immense amount of planning and construction work which commenced on 1
December 2012. Returning shareholder value has been my mission and goal since joining the Group in 2007.
The most significant event in 2014 was signing a Facility Agreement to secure US $83 million of debt funding which fully financed the Project and allowed us to finalise the construction of the Gold Process Plant and the RSI. Partnering with two of the world's leading resource banks, Hongkong and Shanghai Banking Corporation ('HSBC') and BNP Paribas, was particularly pleasing and a strong endorsement of the Project and its fundamentals. A considerable amount of work went into securing this debt facility but it was pleasing that the lenders considered the due diligence process was one of the quickest they had been involved in for a mining project, reflecting the quality of the project and the work undertaken by the Group. There is a strong business relationship with the lenders and it is pleasing to consider this as a partnership for the medium term at least.
Project construction continued apace in 2014 and is now nearing finalisation. The Runruno Process Plant site is a small footprint and careful planning and training has allowed construction to advance without a single major work incident. This is extremely satisfying and over 1.2 million man‐hours have been achieved by the construction group without a lost time incident and I applaud the efforts of our Project construction team and their commendable approach to health and safety.
The build schedule slipped on two occasions during 2014 resulting in the commencement of commissioning planned in late June 2015 and gold production shortly thereafter. The legal and commercial documentation stage of the funding process took longer than first anticipated. Primarily this was due to the complex Philippine land and property ownership laws which made finalising a security package very complicated. During these discussions the project build was slowed down as a defence against over committing the Group financially, and it unfortunately pushed back commissioning by three months. A further three months was added to the build schedule towards the end of 2014 after a period of design drawing delays out of the design consultant.
These issues are now in the past and the Process Plant construction team is confident of entering the commissioning phase at the end of June 2015 and have introduced a construction night shift crew to try and achieve this. Most of the remaining construction works require effort to be focused on the electrical and piping installations of which there is a significant amount of this in the Process Plant.

Board changes

In December 2014 Mr Chris Whitehouse stepped down from the Board of Directors as a Non‐Executive
Director and was replaced by Mr Lucian Eduard Simovici in January 2015. Earlier in 2014 the Company
appointed an independent Non‐Executive Director to compliment the Board of Directors, Mr Jeremy Ayre. Mr
Ayre brings over 25 years relevant financial and technical experience to the Board and is a qualified mining engineer. I welcome Edi and Jeremy onto the Board and both gentlemen are joining at a very exciting time in the Company's development. Their help and experience in technical, financial and commercial areas will be

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very welcome.

A year of major developments

In preparing the Annual Report, it always affords me a chance to reflect on the past year. 2014 was a year of
significant achievements at both Corporate and Project level. The Strategic Report outlines these in greater detail but I would like to highlight some of the major items to you at this point as they are worthy of being singled out.
In previous results statements and market updates I have outlined the investment in infrastructure and it is extremely pleasing to update you on what this provides the Project. Our workforce grew considerably reflecting the personnel demands of the construction phase of the Project and our camp and messing facilities have performed admirably. The camp can accommodate 700 people and it has been at capacity for some time. On average over 2,000 meals are served daily. Like most of our operations our choice has been to service these facilities ourselves without contracted labour or support services.
Our road networks into and out of the Project site over the last couple of years have improved the quality of lives of everyone in the surrounding areas. Most of the road to the national highway is now concreted providing a faster, safer and better experience for all users. A phenomenal amount of equipment of differing weights, shapes and sizes has been conveyed from Manila port to site and we are pleased to report that the Company has not been involved in a single road accident.
The major investment in the infrastructure which allows the site to benefit from electricity from the national grid has proven to be very successful. In December 2014, the Philippine Energy Regulatory Commission certified the switchyard at site which enabled the National Grid Corporation of the Philippines to successfully commission and energise the lines at 69KV on full capacity on 12 February 2015. In October 2014 a power supply agreement was signed with one of the major electricity providers in the Philippines, SN Aboitiz Power- Res Inc. I am delighted with achieving this milestone and it is a great achievement economically and for commissioning into operations.
Ordinarily a corporate group reorganisation which is well planned, thought out and executed with precision should take a few months in controlled conditions. The reorganisation of the MTL Group, required under the Facility Agreement, spanned over 12 months from start to finish, and involved an inordinate amount of time from management and our retained Philippines legal advisory firm. The exercise involved unforeseen amendments to Articles of Incorporation and payment of taxes which the Group believes should not have been payable. That said, the process was ultimately successful and the end result is a tax neutral position for the Group.
Taking on the risk of self‐managing the construction and commissioning of a Process Plant is not an every‐day decision that a Board of Directors of a mining company has to take, but to also include self‐managing of the construction of a RSI in addition to this and at the same time is unusual. This decision was not taken without a great amount of introspection and deliberation involving various specialist consultants with relevant dam and civil construction experience. Various factors conspired to make this undertaking appear to be misplaced; late delivery of a tree cutting permit to allow the works to commence, several attempts at re‐engineering the project pursuant to increasing demands from government offices, a period of excessive and unexpected inclement weather. These have all added cost to the dam project which was fully funded from Project contingency. Fortunately the dam build project has benefited from various economics through recycling of mine pre‐strip materials. The mine construction team are confident the dam will be ready to take the initial tailings from commissioning and ramp up while continuing with construction for the next stages of operations.
The construction of the Process Plant has exceeded my initial expectations and natural reticence. In retrospect the decision to self‐manage has been a blessing in disguise, particularly as we have suffered up to six months slippage in the build schedule without involving material financial penalties which we would have been exposed to if the build project was contracted out. Our construction team have performed exceedingly well in a highly regulated jurisdiction which imposes many challenges to the mining industry. Permits have been applied for timeously and obtained as a matter of course; the team have driven a culture of safe working practices since the inception of construction, and they are attentive to the social and environmental aspects surrounding the Project. The experience the team has built up and the progress made is in my view quite remarkable and extremely noteworthy for the future.

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Cash position and project finance

As at 31 December 2014 the Group's cash at bank position was £12,251,994. As a result of the Facility Agreement, the Project is fully funded through its construction phase with sufficient working capital for operations through commissioning and into operational commencement. The utilisation of the debt facility is based on forecasts provided to the lenders each month with the lenders' independent technical expert reviewing proposed utilisation draw‐downs. To date this has worked seamlessly with no issues that have impacted on any utilisation requests raised.

Corporate responsibility and environment

The Group takes significant satisfaction in its role as a major promoter of community programmes and
responsible environmental activities in the mining sector. This is evidenced by:

 The significant number of environmental and safety awards it has achieved over a number of years;

 Skills enhancement, training, education and health programmes that it runs and supports throughout the barangay of Runruno and greater Municipality of Quezon;

 Actively fostering a genuine equal opportunity employment regime by employing and training women into non‐traditional professional, skilled and semi‐skilled roles;

 Supporting community programmes to develop economically sustainable projects that will continue beyond the life‐of‐mine;

 Support the local communities through direct employment and supply of goods and services to the project;

 Active reforestation and continuous rehabilitation programmes;

 Continuous environmental monitoring; and

 Providing and ensuring a safe working environment for all staff and contractors.

Summary

2014 and Q1 2015 was a tumultuous period of advancement, achievement and learning for our Group. The
Project is in a great position and I am confident the shareholders will begin to realise value in 2016 provided
the price of gold does not retreat excessively.
I would also take the opportunity to formally recognise the dedication, competence and hard work of our operations and construction teams through an extremely demanding and busy year. In the Philippines we continue to enjoy the support of the local communities, authorities, Government Departments and all levels of Government. The Group works very closely with the Mines and Geosciences Bureau, our principal regulator, in the undertaking of our work. I take this opportunity to express my appreciation for the continued support of these stakeholders.
In closing I would like to thank my co‐directors for their contributions during the year, all our loyal and dedicated staff and all of our Shareholders for your continued support.

I R Holzberger

Executive Chairman

1 June 2015

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STRATEGIC REPORT

Metals Exploration plc ('MTL' or the 'Company') is a holding company of a group of companies (collectively the 'Group') engaged in exploration, mining and associated activities, which has in construction a single gold mining asset in the Philippines (the 'Project'). Throughout this report references to the Project or the mine‐ site are specific references to FCF Minerals Corporation's ('FCF') Runruno Gold project. FCF is MTL's wholly owned Philippine subsidiary company. MTL's gold mining activities are carried out solely in the Philippines at its mine site at Runruno in the province of Nueva Vizcaya, Northern Luzon. The Runruno gold mine is not yet producing gold doré but it is expected to be operational ready in H2 2015.
2014 was a successful year for the Group closing out a US $83.0 million debt facility which provided the balance of funding required to bring the mine to a state of operational readiness in 2015. The Hongkong and Shanghai Banking Corporation Limited and BNP Paribas banks provided the facility after undertaking a comprehensive due diligence exercise followed by a period of commercial and legal documentation. It is a testimony to the Project that two of the world's major resource banks chose to partner with the Group and the Project. A Facility Agreement was signed with FCF, the banks (the 'lenders') and their Security Agents on
28 May 2014, to include a structured security package for the benefit of the lenders. The facility terminates on 31 December 2018 and includes gold hedging of up to 35% of planned production over the term of the loan and hedging of 40% of the interest rate exposure based on an agreed US $73.0 million cash flow projection. The capital construction costs including contingency have been estimated and are reported to be US $182.8 million. Shareholders' equity contributions were US $121.1 million. The facility comprises three elements; US $75 million senior debt of which US $70 million is available for construction and US $5 million for bank interest and costs during construction, and a cost overrun facility of US $8.0 million. The Project build is forecast to be within budget which will be a major achievement.
The Group underwent a major restructuring of its Philippine investments to perfect a security package for the benefit of the Project's lenders. It involved transferring the shares MTL held in each of its Philippine entities to a wholly owned intermediate holding company incorporated in Singapore. This undertaking commenced November 2013 and completed in November 2014 becoming a complicated exercise due to unforeseen requirements and restrictions in the Philippines. The ultimate beneficial ownership of all of the assets of the Group was not affected by the restructure.
Throughout 2014 and into 2015 FCF has been disallowed to avail of several fiscal incentives provided to it in its Financial or Technical Assistance Agreement ('FTAA' or 'the Agreement') which are particular to import VAT, customs duties and fees. The FTAA provides that FCF is entitled to import capital mining goods and equipment without payment of import value added tax (currently 12%) or customs duties or fees. The Bureau of Internal Revenue ('BIR') has denied FCF and other mining companies this incentive and designed Revenue Memorandum Circular No 17‐2013 to this effect. FCF has challenged that the scope of the memorandum can be extended to nullify incentives provided by a contract in law (i.e. the FTAA). The challenge is currently in process through the Court of Tax Appeals.
During 2013 management with the approval of the Board of Directors terminated discussions with a major construction contractor in favour of self‐managing the execution of the construction activities at Runruno. This decision was unusual for a company of FCF's size and would call upon the mining, construction and commercial acumen of a small management team and involved recruiting a specialist team of experienced expat personnel with current relevant mining construction experience.
With the mining industry being in a downturn cycle at the time of the decision this provided a more liquid and available skill base to choose from but did not lessen any of the risks involved.
2014 was a year of major events for the Group and FCF restructured its corporate profile to be a major recruiter of Filipino construction personnel and become a quasi‐construction company with emphasis on procurement and contracts, civil and construction works, construction planning and scheduling. The undertaking was on a large scale and required management achieving its deadlines and deliverables in a highly bureaucratic and regulated environment. Attention to detail was tantamount for management to deliver a mine‐site and processing plant capable of delivering stakeholders' expectations. The challenge has not been without its fair share of twists and turns, upsides and downsides but during H2 2015 the mine will deliver ore, the processing plant will be commissioned to provide gold doré, ramp up will have occurred and it is expected FCF will normalise production in early 2016.

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The Group is keenly aware of its social and environmental responsibilities and throughout the construction activities has been monitored and guided by the Mines and Geosciences Bureau ('MGB') of the Philippines. It is with great satisfaction to highlight that FCF has met all of the exacting standards it is obliged to observe, obtained all required permits and provided adhoc and periodic reporting on activities. The effort required to achieve all of the above cannot be accurately measured or underestimated and is to be commended, because without which the construction and mining activities could not proceed. Mining operations in the Philippines are highly regulated with more and more demands continually being encountered which could not be known in advance but which FCF continues to manage diligently. Compliance and regulatory reporting will continue to add to the burden of the Corporate Governance code in the Philippines throughout the life of the mine. However, FCF recognises the growing importance of this administrative work and has planned to include an additional team with balanced skills to manage this varied and widespread workload.
FCF prides itself as being a responsible mining company having won many awards for its efforts in reforestation, social programmes, training programmes and other initiatives. It recognises these cannot be taken for granted and strives to achieve the highest level of attainment at every level. The awards are testimony to this enduring conviction and will never be perceived as token reward but as a standard which must be maintained and surpassed which will enable it to become a benchmark for all mining operations in the Philippines.
Procurement activities during the year were conducted professionally and undertaken to world class standards with FCF now in possession of a meaningful database of suppliers and pricing of a vast array of mining equipment and commodities. The Group policy disallowed for commodity hedging and FCF contracted with secure counterparties throughout the construction phase. A standard series of engagement contracts known as 'Federation Internationale Des Ingenieurs‐Conseils' ('FIDIC') or the International Federation of Consulting Engineers, were consistently applied; depending on the level of contract materiality FIDIC has a set of standard construction or consulting/service contracts which can be adapted in a prescriptive format to be fit for purpose. In general most contractors or manufacturers embraced the FIDIC paradigm and it has proven to be a robust and reliable method of contracting. The FIDIC framework allows the 'Employer', FCF, to receive staged performance and warranty bonds from the contractors and to date not one has been called. Most of the performance bonds have naturally lapsed and the warranty bonds continue post commencement of commissioning for up to twelve months.
Construction progress of the Process Plant throughout 2014 and 2015 averaged a rate of 1.73% per week in a relatively small construction site footprint. Its construction is currently 82% complete and on schedule for commissioning to commence late June 2015 with all construction activity planned to cease by end of August
2015. Commissioning will commence in stages and has challenged the processing team to redesign their gold production strategy. There have been no material health and safety incidents throughout the build programme and a tribute to the construction team's approach to health and safety.
The construction team is confident that first commissioning of equipment and processes can commence at the end of June 2015 followed by staged commissioning of the rest of the plant. The construction team has re‐planned their strategy to include a night shift crew to advance installation of piping and electrical wiring around the plant. During February 2015 the site commenced drawing electrical power from the national grid after the site's electrical switchyard was commissioned by the National Grid Corporation of the Philippines ('NGCP'). The site had previously been provided electricity from a local independent power provider, Nuvelco ('IP'). The IP had reached its maximum supply capacity and did not have the capability of providing the electrical power required for commissioning and into operations. Drawing power from the national grid is less expensive than the power supplied by the IP and has material savings over the cost of diesel generated electricity. The switch over to the national grid supply has been successful and FCF has not encountered any brown outs since the switch, but more importantly this is a prerequisite milestone to allow commissioning of the plant to commence.
Stage 1 of the Residual Storage Impoundment ('RSI') is planned to be ready for operations and pre commissioning with the other stages progressively constructed during the first 4 years of operations. Progress on the RSI construction to the end of March 2015 is 70% complete with commissioning of stage 1 expected by the end of June 2015. This construction has suffered from several periods of inclement weather, extended Philippine holiday periods over the 2014 festive holidays and a January 2015 Papal visit. The combined effect was a reduction in the number of productive days spent on constructing the RSI. The main wall of the RSI requires humid rather than wet weather for the correct quality of clay plasticity and the compression of clay

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to be successfully laid in layers of 150 millimetres. Almost all of the month of December 2014 and January
2015 was non‐productive in this area due to weather and holidays. The waste material from the mine pre‐
strip is of a high quality to undertake this construction and is offering several different grades of clay and fill, providing a cost benefit in its construction. When completed, the materials sourced to construct the RSI will all have been sourced from the mine pre‐strip providing a low environmental footprint. Design specifications had taken a greater length of time to establish during 2014 with the MGB having a large input to design and construction philosophy. A tree cutting permit expected in early 2013 was finally approved during January
2014 which allowed construction activities to eventually commence and ultimately impacted on when the
storage facility would be ready.
The Runruno mine site is nearing operational readiness and in various degrees of completion. The camp site, national grid electricity related infrastructure and on‐site switchyard, heavy and light vehicles equipment maintenance facilities, diesel fuel farm, back up diesel power generators, access road networks, administration buildings, emergency response facilities and laboratory all constructed, commissioned and fully operational. Ongoing works include final preparations of the gold recovery Process Plant, the RSI, Run of Mine ore pad ('ROM'), and various access roads and pre‐stripping of early stages of the mine.

Project Funding

On 28 May 2014 and following a comprehensive period of due diligence and documenting commercial and legal terms FCF Minerals Corporation (in its capacity as Borrower), Metals Exploration Plc (as Guarantor), and Metals Exploration Pte Ltd (as the Parent) entered into a Facility Agreement with:
(i) The Hongkong and Shanghai Banking Corporation Limited ('HSBC') and BNP Paribas ('BNP') as
Original Lenders,
(ii) The Hongkong and Shanghai Banking Corporation Limited acting as Facility Agent, Offshore
Security Trustee, Account Bank and Original Hedging Bank, (iii) BNP Paribas as an Original Hedging Bank, and
(iv) the Philippine National Bank ‐ Trust Banking Group as Onshore Security Agent

Commercial Terms

The facility is a US $83.0 million project finance debt facility comprising (i) US $75.0 million senior debt facility
which includes a US $5.0 million provision for rolled up capitalised interest and fees during construction, and
(ii) US $8.0 million cost overrun facility.
The lenders are participating in equal proportion in providing the facility.
The term of the facility covers a 54 month period maturing on 31 December 2018 and bears a competitive commercial rate of interest consistent for a project financing of this nature. The base interest rate is six months US Libor plus a margin of 4.75% during construction and at project completion the margin reduces by
50 basis points to 4.25%.
Interest payments are biannually commencing 30 June 2015 and principal repayments of the US $75.0 million senior facility are scheduled as follows:

Total 75.0

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The terms of the US $8.0 million cost overrun facility provide for repayments to be made on six month intervals from 50% cash sweep of free cash flow. The interest rate margin on the overrun facility attracts 100 basis points premium over the interest rate applicable to the senior loan facility at 5.75% the base interest rate is six months US Libor.

Hedging

FCF entered into contracts for interest rate swaps for an aggregate notional principal amount that is at least
40% but not more than 100% of the interest rate commitments over the term of the loan facility. The
commitments were calculated based on company forecast. The variable six month US Libor rate is swapped out for a fixed rate of 1.575% over the term.
FCF entered into a series of gold forward sales contracts which will equate to 35% of the annual forecast gold production for the Project, as set out in the company forecast, for the following three years on a rolling quarterly basis. The initial sales orders which were placed totalled 90,000 ounces of gold at twelve quarterly intervals of 7,500 ounces per quarter. At the election of the lenders a further 15,000 ounces of gold may be contracted for settlement in 2018 in two quarterly tranches of 7,500 ounces of gold each, but only after the first two quarterly contacts are cash settled in early October 2015 and early January 2016.
All forward sales contracts are cash settled instruments.
The fixed average weighted forward price achieved on the forward sales contacts for 90,000 ounces of gold is
US $1,287.36 comprising:
The following table provides a summary of the forward gold price swap contracts outstanding as at 31
December 2014 maturing in:

Forward Gold Sales contracts maturing in …..

Table1: Maturing forward gold sales contracts

The interest rate swap and forward gold sales hedge contracts are based on the ISDA schedule to the 2002
Master Agreement and are for the purposes of prudent treasury management to cover genuine commercial
exposure and, in any event, not for speculative purposes or for the purposes of raising finance.

Utilising the facility

To 5 May 2015 a total of nine utilisation requests have been made on the facility totalling $72,842,986 with a
balance of $2,157,014 still available and undrawn from the US $75.0 million senior facility. It is expected the
funds will be fully drawn by the end of June 2015.
The US $8.0 million cost overrun facility remains undrawn and available for the project.
An offshore Project Contingency account is fully funded to the amount of US $13.4 million and available for use in the construction project. It is expected that usage of the contingency account will commence in June
2015 after the US $70.0 million senior loan facility available for construction has been fully utilised.
As announced on 11 March 2014, the forecast capital expenditure programme for Runruno is US$182.8 million to practical completion, inclusive of project contingency. At the end of March 2015, the remaining capital expenditure committed or yet to be incurred is US$20.8m million which will be funded by way of project cash at bank (equivalent of US $2.45m at 31 March 2015), the project contingency account (US $13.4 million) and the senior loan facility residual funds (US $12.16m).

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The current status of the project's capital expenditure programme is summarised below:

Total forecast project cost 182.8 182.8

Table2: project capital expenditure status 31 March 2015

Security

a. Mortgage Agreement

FCF and Philippine National Bank ‐ Trust Banking Group, acting as Onshore Security Agent, entered into a Mortgage Agreement on 28 May 2014 for the term of the facility, which constitutes a first ranking lien in favour of the Onshore Security Agent for the benefit of the Lenders, over the real assets of FCF.
The mortgage also takes security over FCF's current and future chattels for the term of the facility. The Mortgage Agreement terminates at Project Completion.

b. Shares Pledge Agreement

A Share Pledge Agreement was entered into on 28 May 2014 between FCF as Borrower, Metals Exploration Pte Ltd as Pledgor and the Philippine National Bank‐Trust Banking Group in its capacity as Onshore Security Agent, for the term of the facility.
The Pledge constitutes a lien of first rank in favour of the Onshore Security Agent for the paripassu benefit and security of the Lenders and to the shares pledged as collateral.
The shares pledged to the Onshore Security Agent contemplated the Group structure post restructuring which would be held by Metals Exploration Pte Ltd and are summarised as follows:

Table3: Philippine entities shares pledged as of 28 May 2014

The Shares Pledge Agreement terminates at Project Completion.

Group Restructuring

During early discussions with potential lenders and also from previous funding negotiations it became evident
the Group organisation structure was not conducive for providing a satisfactory security package for a lender's benefit. The Company proposed moving its Philippine assets to an offshore holding company and effecting a security over the shares of its Philippine investments through a share pledge. This was accepted at an early stage of discussions and to facilitate this proposal, on 3 December 2013 the Company incorporated an intermediary holding and investment company in Singapore which is wholly owned by MTL.
In a series of structured stages each of the Philippine company investments held by MTL would be transferred to the Singapore entity, Metals Exploration Pte Ltd ('MEPL'). The change in structure would be tax neutral for the Group once complete and when the Philippine's mine is in operation. It was expected the structure would be completed before entering legal documentation with the lenders but this could not be achieved and the restructuring was completed in November 2014.

Restructuring FCF Minerals Corporation

MTL held 99.99% of the shares in FCF or 59,999,995 ordinary shares (the other 5 shares are held by directors

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and compliant with Philippine law). After it became known the strategy adopted for moving FCF to become
100% owned by MEPL directly would take longer than anticipated, the lender's required corporate control of
FCF to reside with MEPL prior to execution of legal documentation (a condition precedent). This required more than 70% of the voting shares to be held by MEPL. FCF had an authorised share capital of 210,000,000 ordinary shares of which 60,000,000 were issued and fully paid up. On 23 April 2014 150,000,000 ordinary shares were issued to MEPL satisfying the corporate control requirement for the lenders.
The next step involved converting 59,999,994 ordinary shares into redeemable preferred shares, redeeming them and immediately cancelling them. This investment would be replaced by an equal monetary amount invested in shares in MEPL. The Securities and Exchange Commission ('SEC') in the Philippines required FCF amend its seventh article in its Articles of Incorporation to allow FCF to create two new classes of shares; convertible shares and redeemable preferred shares. The changes in the articles were applied for in late May
2014 and the certificate authorising the changes was approved on 31 October 2014.
A new class of shares requires 25% to be subscribed for on authorising the class of shares. 80,000,000 redeemable preferred shares were authorised and MEPL subscribed for and fully paid up 20,000,000 redeemable preferred shares.
On receipt of the SEC certificate approving changes to the Articles of Incorporation, FCF proceeded to give notice to MTL and converted 59,999,994 ordinary shares into redeemable preferred shares and immediately cancelled these shares on 4 November 2014.

Restructuring MTL Philippines Inc

MTL held 99.99% of the shares in MTL Philippines Inc or 111,995 ordinary shares fully paid up (the other 5
shares are held by directors and compliant with Philippine law).
The DENR issued Memorandum Order No. 2013‐01 dated 21 February 2013, which requires that for a company to be awarded or to hold an exploration license it must have a minimum authorised share capital of
100,000,000 pesos and that the minimum paid‐up share capital is 6,250,000 pesos. To satisfy these requirements MTL Philippines Inc amended its seventh article in its Articles of Incorporation enabling the company to increase its authorised share capital to be 100,000,000 Pesos divided into 1,000,000 shares with a par value of 100 Pesos per share. On 14 May 2014 the SEC approved the increase in capital stock.
On 11 April 2014, MTL entered into a subscription agreement with MTL Philippines Inc to subscribe for 25% of the increased authorised share capital of the company once the approval to the increase had been received. The subscription was for a further 222,000 ordinary shares and increasing the subscribed share capital to
334,000 ordinary shares. The shares were issued and fully paid up on 27 May 2014.
On 7 October 2014 333,995 ordinary shares held by MTL were cancelled and 333,995 ordinary shares were issued to MEPL. The receipt of a 'Certificate Authorizing Registration' was received on 11 October 2014 from the BIR confirming exemption from capital gains tax, receipt of payment of documentary stamp taxes and the final authority acknowledging the shares had been registered and issued to MEPL.

Restructuring Cupati Holdings Inc

MTL held 39.99% of the shares in Cupati Holdings Inc ('Cupati') or 9,998 ordinary shares partly paid up (2
other shares are held by directors and compliant with Philippine law). The debt funding package required all
issued shares to be fully paid up and MTL satisfied this requirement on 27 May 2014.
The transfer of the shares to MEPL involved a fair value of the company's assets and liabilities and with the balance sheet containing a negative net assets position, no capital gains tax was computed. However, the BIR imputed a donor's tax of 30% on the transaction on the basis that the company was a land owning entity transferring ownership to an offshore jurisdiction.
On 7 October 2014 9,998 ordinary shares held by MTL were cancelled and 9,998 ordinary shares were issued to MEPL. The receipt of a 'Certificate Authorizing Registration' ('CAR') was received on 24 October 2014 from the BIR confirming exemption from capital gains tax, payment of documentary stamp taxes and payment of donor's tax on the transaction. The CAR is the final authority acknowledging the shares had been registered and issued to MEPL.

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Restructuring Woggle Corporation

MTL held 39.99% of the shares in Woggle Corporation ('Woggle') or 9,998 ordinary shares fully paid up (2
other shares are held by directors and compliant with Philippine law).
The DENR issued Memorandum Order No. 2013‐01 dated 21 February 2013, which requires that for a company to be awarded or to hold an exploration license it must have a minimum authorised share capital of
100,000,000 pesos and that the minimum paid‐up share capital is 6,250,000 pesos. To satisfy these requirements Woggle amended its seventh article in its Articles of Incorporation enabling the company to increase its authorised share capital to be 100,000,000 Pesos divided into 1,000,000 shares with a par value of
100 Pesos per share. On 25 April 2014 the SEC approved the increase in capital stock.
On 27 January 2014 MTL entered into a subscription agreement with Woggle to subscribe for 25% of a future increase in the authorised share capital of the company once the approval to the increase had been received. The subscription was for a further 90,000 ordinary shares and increasing the subscribed share capital to
99,998 ordinary shares. The shares were issued and fully paid up on 27 May 2014.
On 7 October 2014 99,998 ordinary shares held by MTL were cancelled and 99,998 ordinary shares were issued to MEPL. The receipt of a 'Certificate Authorizing Registration' was received on 26 September 2014 from the BIR confirming exemption from capital gains tax, receipt of payment of documentary stamp taxes and the final authority acknowledging the shares had been registered and issued to MEPL.

Metals Exploration Pte Ltd

The restructuring advice received contemplated replacing the investment in FCF on MTL's balance sheet with an investment in MEPL in an equal monetary amount to the 60 million pesos divestment in FCF.
On 21 May 2014 MTL entered into a subscription agreement with MEPL for a future issue of 1,331,283 ordinary shares of US $1 each and advanced US $1,331,283 to MEPL. On 10 November 2014 MEPL issued

1,331,283 ordinary shares to MTL.

METALS EXPLORATION PLC

99.99% FCF MINERALS CORPORATION

59,999,999 ordinary shares 1peso each ‐

fully paid up

99.99% MTL PHILIPPINES INC

111,995 ordinary shares 1peso each ‐

fully paid up

39.99% CUPATI HOLDINGS INC

9,998 ordinary shares 100peso each ‐

partly paid up

39.99% WOGGLE CORPORATION

9,998 ordinary shares 100peso each ‐

fully paid up

Table4: Metals Exploration plc shareholding investment in Philippine entities before restructuring

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