METALLICA MINERALS LIMITED - ASX: MLM

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Description

Metallica Minerals (ASX:MLM) has a large JORC resource for Scandium Oxide at its Kokomo Ni-Co-Sc deposit and has recently discovered additional high grade scandium at its Lucknow Ni-Co-Sc deposit within its NORNICO project in North Queensland Australia. Scandium is one of the most amazing REE’s, a major enhancer of aluminium and Al-alloys and lighting. Additional big demand is expected to come from the new generation of fuel cells. MD is Andrew Gillies.

NORNICO (Nickel-Cobalt-Scandium)

Metallica’s flagship project is the 100% owned NORNICO Nickel-Cobalt Project 32 kilometres south of Mt Garnet in northern Queensland, where the Company aims to develop a profitable long-life mine, producing an estimated 10,000 tonnes of high-grade nickel and 1,000 tonnes of cobalt each year for at least 15 years. The combined NORNICO resource base of the three deposits of Bell Creek, Minnamoolka and Kokomo is approximately 50 million tonnes @ 0.72% Ni and 0.06% Co (364 Kt Ni and 29 Kt Co contained). This resource base has significantly grown with the purchase of the Greenvale Nickel Mine and the new Lucknow resource.

Lucknow & Kokomo

The Lucknow Nickel-Cobalt-Scandium laterite (or oxide) deposit is located approximately 2km southwest of the Greenvale township and approximately 6km southeast of the Greenvale Nickel Mine site in North Queensland (190km west of Townsville). Metallica Minerals Ltd subsidiary, Greenvale Operations Pty Ltd, owns the two tenements (EPM’s 10680 and 10860) that cover the Lucknow Ni-Co-Sc deposit. Metallica owns 100% of the Lucknow scandium rights and 80% of the Kokomo scandium rights. Joint venture partner, Straits Resources Ltd (ASX:SRL), holds 20% of the Kokomo scandium rights.

The Lucknow scandium deposit was discovered recently while drilling for Ni-Co. Metallica intends to become the world’s major long-term supplier of scandium products by developing its scandium projects alongside the proposed Stage 1 Ni-Co (and Sc) NORNICO project. Metallica will incorporate the production of scandium oxide (99.9% Sc2O3) and also investigate “value added” scandium product opportunities including scandium aluminium master alloy (ScAl) and Scandia Stabilized Zirconia (ScSZ) a key component in Fuel Cells.

The Kokomo scandium resource occurs within the Kokomo Ni-Co laterite (or oxide) project located approximately 50km NNE of Greenvale. The Measured, Indicated and Inferred scandium Mineral Resource (at a COG of 70g/t Sc) stands at 9.0 Million Tonnes (Mt) at 109g/t Sc containing approximately 1,480 tonnes of scandium oxide (Sc2O3). A breakdown of this resource is presented in Table 1 at the end of this release. For further information on the Kokomo Scandium Resource – see ASX release dated 27th January 2010.

LUCKY BREAK (Nickel-Cobalt)

The Lucky Break Nickel Project, 140 kilometres west of Townsville, is a joint venture between Metals Finance Corporation (ASX: ‘MFC’) and Metallica. MFC is the project manager, responsible for all development costs as part of its earn-in agreement. Metallica is free carried and will receive a share of the operating surplus once the project is in operation – initially 15%, until MFC has recouped its capital investment, and 60% thereafter. MFC is currently updating capital and operating costs and other related studies, with a view to finalising a Definitive Feasibility Study on the revised project by the end of 2009. Proposed nickel production is expected to be in the order of 700-1,200 tonnes per annum, with targeted development of the project recommencing early 2010.

COAL

Metallica holds 56% of MetroCoal Limited, an emerging coal-based, export coal and cleaner coal energy company that aims to develop a substantial limited-emissions energy business centred on its 4,000 square kilometres of wholly-owned project tenements in the Surat Basin of southeast Queensland. MetroCoal’s simple strategy is to exploit previously stranded abundant coal deposits in a favourable setting. 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.

BAUXITE

Metallica holds a strategic 33% interest (comprising 42.3 million ordinary shares) in another Brisbane-based company, 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. The Company is currently evaluating development of the 5-7 mtpa Pisolite Hills project with an Environmental Impact Sstatement (EIS) and Feasibility Study due for release in 2010 and production planned for 2013-14. If developed, Pisolite Hills will position Cape Alumina among the top 10 bauxite producers in the world, and one of the major bauxite suppliers in the Asia-Pacific region.

TUNGSTEN-MOLYBDENUM

In mid 2009, Metallica Minerals successfully acquired approximately 76% of Planet Metals Limited (previously Queensland Ores Limited) (ASX: ‘QOL’), following a Scrip for Scrip takeover bid and Rights Issue. The Company holds two significant resource projects – the Wolfram Camp Tungsten-Molybdenum Project and the Mount Cannindah Copper-Gold Project – both with granted Mining Licences and Wolfram Camp has full scale (150,000tpa) processing plant and equipment, which cost over $20 million. Wolfram Camp, the nation’s first tungsten-molybdenum mine developer in the current mining cycle, is located about 90 kilometres inland of Cairns and is 85% owned by Planet Metals, with the remainder held by its joint venture partner, Tropical Metals Pty Ltd. Concentrates of wolframite and molybdenite were being produced in late 2008, but the project is currently in care and maintenance due to commissioning problems, lack of sufficient working capital and now world tungsten and molybdenite prices in late 2008 early 2009. Further evaluation is undertaken including infill drilling at Wolfram Camp.

COPPER-GOLD

The Mount Cannindah Copper-Gold Project is 100% owned by Planet Metals and is located approximately 40 kilometres from Monto in southeast 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.

Mine For

scandium, nickel, cobalt, coal, bauxite, tungsten, molybdenum, gold, limestone

Location of operation(s)

Queensland

Address

71 Lytton Rd
EAST BRISBANE, QLD, AUSTRALIA

Phone

(07) 3891 9611

Email

Website

http://www.metallicaminerals.com.au

Last Updated

18/05/2010