METALLICA MINERALS LIMITED - ASX: MLM

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Description

Since its establishment in 1997 and ASX listing in November 2004, Metallica Minerals (ASX code: ‘MLM’) has maintained a core focus on the sustained development of its flagship NORNICO nickel-cobalt-scandium project in north Queensland, while expanding its business through a complementary series of strategic resource project acquisitions, non-core asset sales, corporate alliances, and cutting-edge technological advances.

The primary objective and strategy of Metallica Minerals Limited is to advance its flagship 100% owned NORNICO project towards achieving long-life profitable nickel-cobalt and scandium production in the most efficient way. Metallica is also enhancing its major interests in coal, bauxite, zircon-rutile, limestone, tungsten-molybdenum, copper-gold and rare earth elements, to provide attractive returns for shareholders

Bauxite

Metallica holds a strategic 29.9% interest in Brisbane-based, Cape Alumina Ltd, which listed on the ASX in January 2009 under the code ‘CBX’. Cape Alumina is Australia’s leading pure-play bauxite (ore for aluminium) company, with a 100% interest in the largest tenement holding outside Rio Tinto’s Alcan mining leases, in the world renowned Weipa Bauxite Province in Australia’s Cape York. Cape Alumina has international support from several Chinese alumina majors, including Xinfa, one of the country’s largest aluminium producers, and has established strong ties with the local Cape York community.

Coal

Metallica holds 46.1% of MetroCoal Limited, an emerging coal-based energy company focused on its 100% coal projects in the Surat Basin in South East Queensland. MetroCoal listed on the ASX on 4 December 2009 after closing a fully subscribed IPO raising $10 million. MetroCoal’s core strategy over the next two years is to establish exploitable coal deposits of 2-3.5 billion tonnes within its current tenements for purposes of export thermal coal from conventional mining operations, and provide a world-class base for Underground Coal Gasification (UCG) operations to produce ‘syngas’ that can be converted to generate cleaner electric power and once established, use a portion of the syngas production for purpose of clean fuels (such as clean diesel) and fertilisers.

Copper-Gold

The Mount Cannindah Copper-Gold Project is 100% owned by Planet Metals and is located approximately 100km south of Gladstone,Queensland. The Mt Cannindah Cu-Au project contains a large porphyry copper-gold system within 9 granted Mining Leases covering ~6km² the lease contains an open pitable measured resource of 5.6Mt @ 0.95% Copper and 0.4 g/t Gold.

Limestone

Metallica Minerals strategically purchased Phoenix Lime Pty Ltd in May 2007 in order to obtain the mining leases associated with the Ootann Limeworks and secure the lime and limestone requirements anticipated for the NORNICO Nickel Project.

Phoenix Lime has since taken on the development of Metallica’s six other strategically located limestone holdings (near NORNICO, Townsville and Gladstone industrial centres) and applied for new untenured ground with potential high-grade limestone mineralisation suitable for industrial use and commercial development.

The Company’s primary focus is on developing its current limestone projects within Queensland, with a priority to define the resources available to support the NORNICO Project. Phoenix has completed a pre-feasibility document to supply lime and limestone from Ootann to NORNICO and will construct a lime burning facility in association with NORNICO’s development.

Mineral Sands

Through its wholly owned subsidiary Oresome Australia Pty Ltd, Metallica holds 100% of the Cape York Mineral Sands Project. At this stage the project consists of four granted EPM’s (Urquhart Point, Jardine and Doughboy and Jackson River 2), eight EPM Applications and one Mining Lease Application. Exploration on the project is targeting rutile and zircon in sand dunes and strandlines along the coast line near Weipa and north to the tip of Cape York Peninsula. Oresome currently holds approximately 1,500km2 of highly prospective yet under-explored ground.

In 2008, an Indicated Resource of 2.8Mt @ 7.0% Heavy Mineral Sands (HMS) to a maximum depth of three metres was identified at the Urquhart Point deposit, three kilometres south-west of Weipa. The valuable HMS suite is dominated by zircon and rutile, likely greater than 30% combined. The strandlines are characterised with an extremely low slimes content and minimal overburden. There is a further nine kilometres of coastline still to be tested within the Urquhart Point tenement alone, EPM15268.

Metallica, through Oresome, is pursuing the development of the Cape York Mineral Sands Project. Discussions are underway with all affected parties related to the MLA over Urquhart Point, including the Aurukun Shire Council and the Traditional Owners. 2011–2012 will see continued work on granted EPM’s, the results of which will hopefully enhance the potential life of the project. There is excellent potential to form a modest size high grade zircon and rutile project with relatively low capital cost to produce a zircon and rutile concentrate.

Nickel-Cobalt-Scandium

The NORNICO Project is currently being updated. Please see ASX Release dated 19 January 2011 for further information.

The Lucky Break nickel project, located 140km west of Townsville is a joint venture between Metals Finance Ltd (ASX:MFC) and Metallica. Metallica holds two granted Mining Leases (ML 10324 and 10332). Both MFC and MLM hold their Joint Venture interests through wholly owned subsidiaries. MFC is the manger of the Lucky Break nickel project and is responsible for all development costs as part of its earn-in agreement. Metallica is free carried and will receive its share of theoperationg surplus once the project is in operation and MFC has recouped its capital investemtns an then sharing cash flow thereafter.

The project is to be developed and brought into nickel production at no extra cost to Metallica and hence does not dilute shareholder equity. The other key advantage is that it provides Metallica with significant hydrometallurgical operation experience and know-how, ahead of the proposed larger scale NORNICO Stage 1 development at Greenvale. MFC recently completed a revised internal Feasibility Study, incorporating revisions in scale to approximately 60ktpa higher grade nickel ore processing operation.

The proposed nickel operating is of modest size, with nickel production in the order of 700 tonnes nickel metal per annum. The Lucky Break project is 50% MFC and 50% Metallica Minerals.

Tungsten-Moly

Wolfram Camp Tungsten-Molybdenum Project is located 90 kilometers inland of Cairns and is 85% owned by Planet Metals, with the remainder held by its joint venture partner, Tropical Metals Pty Ltd. In June 2010, Planet Metals entered into a Heads of Agreement (Option to Purchase) with Tropical Metals to sell its 100% ownded subsidiary Wolfram Camp Mining for $8 million cash. Tropical Metals are currently completing Due Diligence on this purchase.

Mine For

nickel, cobalt, scandium, coal, bauxite, tungsten, copper, gold, limestone, rare earths, zircon, rutile, molybdenum

Location of operation(s)

Queensland, South Australia

Address

71 Lytton Rd
EAST BRISBANE, QLD, AUSTRALIA

Phone

(07) 3891 9611

Email

Website

http://www.metallicaminerals.com.au

Last Updated

3/5/2011