ANNUAL REPORT 2016 - Metallica Minerals · METALLICA MINERALS ANNUAL REPORT 2016 4 On track For bauxite sales in H1 of calendar year 2017 $1M Sale of Boyne limestone …

ANNUAL REPORT

2016

Legal

HopgoodGanim Level 8, Waterfront Place 1 Eagle Street Brisbane QLD 4001

Stock Exchange Listing

ASX:MLM

Australian Business Number

ABN 45 076 696 092

Subsidiary companies

NORNICO Pty Ltd ACN 065 384 045

Oresome Australia Pty Ltd ACN 071 762 484

Oresome Bauxite Pty Ltd ACN 606 362 252

Lucky Break Operations Pty Ltd ACN 126 272 580

Phoenix Lime Pty Ltd ACN 096 355 761

Greenvale Operations Pty Ltd ACN 139 136 708

Scandium Pty Ltd ACN 138 608 894

Touchstone Resources Pty Ltd ACN 126 306 018

Directors

Mr Barry J Casson Non–Executive Chairman

Mr Andrew L Gillies Non–Executive Director

Dr Shu Wu Non–Executive Director

Mr Shu Zhang Alternate Director to Dr Shu Wu

Chief Executive Officer

Mr Simon J Slesarewich

Chief Financial Officer & Company Secretary

Mr John K Haley

Principal Registered Office in Australia

Ground Floor, 71 Lytton Road East Brisbane QLD 4169

+ 61 7 3249 3000 [email protected]

Website

metallicaminerals.com.au

Share Registry

Link Market Services Level 15, 324 Queen Street Brisbane QLD 4000

+61 73320 2200

Auditor

BDO Australia Level 10, 12 Creek Street Brisbane QLD 4000

CORPORATE DIRECTORY

3

METALLICA MINERALS ANNUAL REPORT 2016

2016 Achievements & 2017 Goals 4

Chairman & CEO’s Letter 6

Cape York Bauxite & HMS Project JV 8

Urquhart Bauxite Project 10

Urquhart Point HMS Project 12

Cape York Regional Exploration 13

Esmeralda Graphite Project 14

SCONI Scandium–Cobalt– Nickel Project 16

Cape Flattery Silica Sands Project 17

Director & Management Profiles 18

Tenement Tables 20

Resource Tables 24

Top Twenty Shareholders 34

CONTENTS


4

On trackFor bauxite sales in H1 of calendar year 2017

$1MSale of Boyne limestone project

EIS Commonwealth government confirms no EIS required for Urquhart bauxite project

$370,000 Sale of Star limestone project

Secured Access and transhipping solution for Urquhart bauxite project

$500,000Sale of Ooatan limestone project

EALodged Environmental Authority for Urquhart bauxite project with Queensland government

$1.8M Raised via successful and early closed Rights Issue

JV of SCONI project preserving value and delivering $250,000

$316,000 Research and Development refund received

ReceivedDelivery of HMS processing plant

ConfirmedAttractive grade and metallurgy at Esmeralda graphite project

2016 ACHIEVEMENTS


5

Commence production of direct shipping bauxite (DSB) from Urquhart bauxite project

Commence ramp up of Urquhart bauxite production to 1.5 –2.0 Mtpa

Continue to review bauxite opportunities located in the Pacific Basin

2017 GOALS

Identify and evaluate other value–adding projects

Continue to identify shallow targets at Esmeralda graphite project near Croydon

Review development plans for Urquhart Point HMS project and utilization of the processing plant

Continue to realise value from non–core assets

6


Dear Metallica shareholders,

The 12 months under review has been a period primarily focused on ensuring your Company is better positioned to now make a sustainable transition from minerals explorer and developer to a successful and profitable bauxite miner. This period of review has also been the first full year under the leadership of Simon Slesarewich as Chief Executive Officer and a smaller non–executive Board of three led by Barry Casson as Non–Executive Chairman. This has placed additional emphasis on streamlined management and experience in development, preparing for operations going forward.

That prospect – of first production from our Urquhart Bauxite project in far north Queensland – is becoming a reality. Your Board and Management team remain confident that we will see first exports of bauxite and positive cash flow in the first half of calendar year 2017.

The preparedness for this step–change was underpinned by the prioritised delivery over 2015–2016 of successful outcomes against four key objectives:

• Firstly, a realistic assessment and review of our then held assets and business strategies against the most likely outcomes for them, if any, over the immediate period ahead

• Secondly, recognition that on current assets and market outlook, Metallica had to be preferentially positioned as an emerging bauxite producer, not a mixed commodity player

• Thirdly, the immediate continuation and associated expenditure of evolving (initially) as a heavy mineral sands miner, was not justifiable on current market conditions, and

• Fourthly, Metallica had to enhance its cash strength via a combination of timely sales of non–core assets, minimising shareholder dilution, and appropriate levels of capital raisings that were clearly understood and appreciated by the broader equities market.

As a result, the majority of the Company’s limestone assets in Queensland were sold during the period, for total net proceeds of just under $2 Million. The Joint Venture with Australian Mines over the SCONI project delivers on the Company’s promise to create value from non–core assets, as well as preserving Metallica’s significant past investment, whilst maintaining an exposure to the continued upside from the development of SCONI. Further non–equity funding for the Company was recently successful in terms of a Research and Development refund of $316,000.

Our core assets remain Metallica’s significant portfolio

of bauxite and zircon–rutile heavy mineral sands (HMS)

resources and exploration interests on Cape York

Peninsula, and the unique Esmeralda graphite exploration

project near Croydon, also in north Queensland. These

projects will underpin our forward business activity in

the near–term and be supplemented as appropriate with

opportunities that are expected to arise going forward.

A more detailed explanation of your Company’s aspirations

around its current projects is contained elswhere in this report.

The transition to a successful bauxite producer

The decision to prioritise Metallica as an emerging bauxite

producer is that we control substantial bauxite resources

of sufficient grade and quality to underpin our growing

Company. Bauxite as a commodity also includes pricing

upside, and our bauxite resources are located adjacent

to an ideal deep water export gateway on Cape York,

with direct sea routes to key Asian markets at favourable

shipping rates, relative to many other exporting nations.

In addition, the global bauxite sector is widely tipped

to entertain a supply shortfall in the coming 12 months.

This window of opportunity continues to deepen due to

mining and export restrictions imposed during the year

by some of our regional overseas bauxite competitors.

Indeed, the global shortfall of low temperature bauxite (the

type we will expect to produce at Urquhart) is tipped to rise

to 68 million tonnes per annum (Mtpa) by just 2040.

As such, the decisions of your Board and Management

in the past year have been to maximise this window

and ready Metallica to grow production towards a

target of 5–7 Mtpa of bauxite over the coming 3 to 5

years. This production journey is now very close.

No other recently owned or currently owned

Metallica assets offer such immediate maiden

mining and maiden revenue pathways.

Within this push to first mining, your Board acknowledges the

valuable and ongoing partnership with our Cape York Bauxite

and HMS Project Joint Venture partner, Ozore Resources

Pty Ltd. We publicly congratulate Ozore on successfully

moving to a 50% interest in the JV during the year.

LETTER TO SHAREHOLDERS

7


Particularly pleasing within our bauxite pursuit was the decision during the review period by the Commonwealth Department of the Environment to determine that the Urquhart Bauxite Project is a “Controlled Action”.

Put simply, this means the regulatory approval process for our proposed bauxite mine will be less onerous, meaning an Environmental Impact Statement (EIS) will not be required, and issues can be addressed in our preliminary documentation covering management plans and how we plan to mitigate the potential impacts of the mine.

This “determination” is a key positive for the project and is a direct result of the significant work and consultation undertaken by the Joint Venture team and its consultants to deliver sustainability for our new mine.

We further added to our progress with the signing of the Heads of Agreement to utilise the nearby and recently completed Hey Point bulk storage, loading and barging infrastructure (just 15 km from our mine site and owned by another bauxite miner). This transhipping solution eliminates the need to build our own costly infrastructure to move Urquhart bauxite onto waiting bulk vessels, moored only 3.5 km from the already installed barge loading facility at Hey Point.

This was a major achievement in substantially de–risking our pursuit to sustainable cash flow. It means Metallica is assured of much lower start–up costs for our own mine and we are able to compress the start–up schedule.

Hey Point was the most viable solution from three logistics and transhipping options considered for Urquhart bauxite and presents your company with a low risk start–up operation.

With a mining lease application lodged, we will continue to work closely with the Queensland Government and other stakeholders, including Traditional Land Owners, to secure all approvals allowing a mining start in the first half of 2017.

As a consequence of our focus on delivering Urquhart bauxite, the purpose built processing plant for our co–located and planned Heavy Mineral Sands mining project at Urquhart Point, just south of Weipa, has been put on hold for the time being, pending improvement in the mineral sands commodity prices. Your Company continues to monitor the mineral sands market and is encouraged by recent price increases for those commodities contained at Urquhart Point that may deliver value in the future.

Promising graphite play

Progress on our wholly–owned Esmeralda graphite project (graphite–in–granite, a unique style of mineralisation because of its rarity and general high purity in either flake or crystalline form) was encouraging.

The positive drill and metallurgical outcomes from our late in 2015 drill campaign included intersections of significant broad graphite mineralisation. The forward program for this project includes further exploration planned in 2016 and potentially a follow up drill program in 2017. However our priority will continue to be sustainable cash flow from Urquhart bauxite.

Robust capital outcomes

Your Company’s capital raising initiatives included a renounceable rights issue that was closed early, with just under $1.8 Million raised. We sincerely thank Metallica shareholders for your loyalty and support for this raising as the proceeds are sufficient to materially advance the Urquhart bauxite project.

These capital initiatives saw the Company close out the 2015–2016 full year with a robust $2.3 Million cash at bank. Importantly, Metallica remains a company with a tight capital structure and no debt after 12 years as an ASX listed entity.

One negative for Metallica during the year, as confronts most of the junior resources space, is the lack–lustre share price performance. After a flat two to three year period, equities market sentiment towards junior explorers and developers only recently commenced showing signs of genuine renewed buoyancy.

Your Board believes achieving the transition next year to bauxite miner, will attract a positive re–rating of the Company.

In closing, the current 2016–2017 financial year should prove the most important in Metallica’s history and elevate the Company from developer to the milestone of producer. While there is still work to be done, your Board and Management team are confident that the correct stepping stones for realisable growth are in place – and we invite you to continue to share this exciting time ahead for Metallica.

SIMON SLESAREWICH Chief Executive Officer

BARRY CASSON Non–Executive Chairman


8

REVIEW OF OPERATIONS

9


CAPE YORK BAUXITE & HMS JV

1,784 HaMining leases and Mining lease applications

Bx & HMSBauxite and Zircon, Rutile, and Titanium metals

MLM 50%Manager of Joint Venture with Ozore Resources Pty Ltd holding remaining 50%

1,200 km2

Exploration tenure

The Cape York bauxite and HMS project is located on the west coast of Queensland’s Cape York Peninsula, and is now held 50% by Metallica Minerals’ wholly–owned subsidiary, Oresome Australia Pty Ltd, who is also the Manager of this JV, with a 50% interest held by a private Chinese investor, Ozore Resources Pty Ltd, pursuant to the Cape York Bauxite and HMS JV entered into in August 2014.

In accordance with the JV Agreement, Ozore has provided A$7.5 Million (plus additional subsequent Joint Venture cash calls) to develop the Urquhart Point HMS project (currently on hold) and to explore other tenements held within the Cape York region, which led to the discovery of the Urquhart Bauxite project. Since formation, the JV

has expended over $8.5 Million with the majority of the funds applied to the manufacture of the HMS processing plant, completed in 2015 and currently stored near Brisbane and more recently the Urquhart bauxite project.

The JV project has three separate components;

• Urquhart bauxite project

• Urquhart Point HMS project

• Cape York regional Bauxite & HMS exploration

AUSTRALIA

N

VRILYA POINT TENEMENTS

VRILYAPOINT

n

VRILYA POINT

MAPPOON

URQUHART POINT WEIPA

BAMAGA

SEISIA

AURUKUN

URQUHART POINT TENEMENTS

Weipa

URQUHART POINT

n

ML 100049Infrastructure ML

GULF

OF

CARPENTARIA

CAPE YORK

PENINSULA

FIGURE 1: Cape York Bauxite and HMS project location

10


URQUHART BAUXITE PROJECT

The Urquhart bauxite project

is situated adjacent to the

HMS project and is some

5km southwest of Weipa

on Queensland’s Cape York

Peninsula. Western Cape

York is world–renowned

for its extensive deposits

of high–quality, export

grade pisolitic bauxite.

A Heads of Agreement

(HoA) was executed by

Metallica early in April 2016

with Green Coast Resources

Pty Ltd (GCR), the owner

and operator of the nearby

Hey Point bauxite project,

for bauxite logistic services

and trans shipping access.

This agreement significantly

de–risks the Urquhart

bauxite project and delivers

both a very low start–up

capital requirement and

a compressed start–up

schedule. Under the

agreement, direct shipping

bauxite (DSB) from the

Urquhart bauxite project

will be delivered to export

vessels via the recently

approved nearby Hey

Point load–out facility,

located only 15k m from the

Urquhart bauxite project.

Through the HoA and the provision of a Short–Term Loan to GCR, Metallica has been able to lock in a logistics solution for Urquhart bauxite product. The parties will look to finalise by November 2016, the contract for the transhipping service and access. If a contract is not entered into by that time, GCR is still bound to provide the transhipping services and access to Metallica under the loan agreement, with a cap applied to the rate charged to Metallica. The purpose of the Loan was to assist GCR itself in achieving that company’s maiden bauxite shipment which occurred on 19 October 2016.

The Urquhart bauxite JV has also lodged and progressed Mining Lease Application (MLA) 100044 comprising 1,378 Ha covering the Urquhart bauxite resource (Area A and Area B).

A detailed drill program was completed in August 2016 that is expected to result in an increase in the resource category confidence and will underpin further studies that are predicted to verify the

previously completed Options Study, undertaken internally by Metallica earlier this year, to progress the project as a new Cape York DSB mine and export operation.

To date, drilling results, coupled with the completed geological modelling, confirm that the majority of the Urquhart bauxite resource is suitable for DSB. The potential production of DSB expedites permitting and development of the project due to the relatively simple mining–truck–barge operation with consequentially low capital and operating costs. DSB is planned to be produced at an average production rate of 1.5–2.0 Mtpa.

The project’s high–quality export–grade Weipa type bauxite has a high total alumina content (>50% Al

2O

3),

which is sought after in the seaborne bauxite market. In May 2015, the JV announced a maiden JORC–compliant Inferred bauxite mineral resource for the Urquhart bauxite project. Additional details of the bauxite estimate are provided in Table 1.

In Area A, available alumina (AAl) and reactive silica (RSi) were selectively sampled for intervals below a threshold of 15% SiO

2 or above 48%

Al2O

3. This represents the

lower half of the bauxite horizon defined in Area A.

Subsequently, this lower section was modelled as a separate domain where the assays for AAl and RSi were available. In comparison, Area B has generally higher SiO

2 and a much smaller

and less continuous lower bauxite domain. It has similar chemistry, but currently no AAl or RSi assay results are available to conclusively determine the overall quality of Area B. Estimates for the lower bauxite horizon as a higher grade subset of the 45% Al

2O

3 cut–off resource

in Table 1 are provided in Table 2 at an effective cut–off grade of 15% SiO

2.

The JV holds extensive regional bauxite and HMS tenements along the 300 km sandy coastal belt between Weipa and the tip of Cape York Peninsula.

11


TABLE 1: Urquhart DSB Resource statement details at 45% Al2O

3 cut–off

Area

DSB (in–situ)

Kt Al2O

3% SiO

2%

A 5,121 52.0 15.0

B 2,366 48.8 19.0

Total 7,487 51.0 16.3

TABLE 2: Urquhart DSB Resource statement for the lower Bauxite profile

Area

DSB (in–situ)

Kt Al2O

3% SiO

2% AAl% RSi%

A 3,987 53.3 13.0 40.6 4.9

B 777 52.7 13.2

Total 4,764 53.2 13.0

NOTES

1. Table 2 tonnages are a subset of those reported in Table 1

12


URQUHART POINT HMS PROJECT

The Urquhart Point HMS project is located 3 km southwest of Weipa. The JV envisages a simple dry mining (<3m depth) and wet processing operation using standard gravity (spiral concentrators) HMS separation to produce a zircon–rutile heavy mineral concentrate (HMC).

The modularized HMS processing plant purpose built for the project in South Africa arrived in Australia in December 2015 and is currently stored near Brisbane. Given the continuing low heavy mineral sands prices, the JV has deferred construction of the processing plant to focus on the higher value bauxite project.

Following several approaches from third parties, the JV is progressing several HMS options that may deliver value to this asset within the JV.

The HMS development plan can be implemented very quickly to deliver production if there is an improvement in commodity prices

Hydrex Tank Spirals Unit Water Reticulation

ElectricalMotor Control

Centre

Administration and future Ranger Station

Trommel Screen

Trommel Screen Feed Conveyor

Ore Feed Bin

Isometric view URQUHART POINT HMS PLANT GENERAL ARRANGEMENT

CONA001 - A000 - GA001

Cup

FIGURE 2: Urquhart Point HMS plant

13


CAPE YORK REGIONAL EXPLORATION

The JV holds extensive regional tenements along the 300 km sandy coastal belt between Weipa and near the tip of Cape York Peninsula that are prospective for bauxite and HMS.

The JV did not undertake any field work on its regional bauxite and HMS exploration targets during

the year. With a clear focus on the Urquhart bauxite project, regional exploration is currently on hold.

Significant areas of coastal bauxite have previously been identified during a review of the Cape York tenement portfolio. The target areas are characterised by low lying, partly dissected and

undulating laterite plateaus. Data compilation and desk–top studies have outlined eight prospective plateau zones within the tenements where previous exploration drilling encountered bauxite intervals grading in excess of 40% Al

2O

3 (alumina).

An initial combined bauxite exploration target* across the regional Cape

York tenements is in the range of 42 Mt–128 Mt (see table on page 26). The JV has consolidated the size of its tenement holding and reduced holding and operational costs by surrendering areas considered unlikely to hold significant areas of mineralisation for development.

*EXPLORATION TARGET

The potential quantity and grade of the bauxite deposits are conceptual in nature. There is insufficient information at this time to define a mineral resource and there is no certainty that further exploration will result in the determination of a mineral resource in these areas.

14


ESMERALDA GRAPHITE PROJECT

581 km2

Exploration tenure

MLM 100%Through subsidiary Touchstone Resources Pty Ltd

GraphiteLarge scale “graphite in granite”– targeting high purity graphite

In July 2015, Metallica Minerals was granted Exploration Permits for Minerals (EPMs) 25779, 25806 and 25807, which make up the Esmeralda graphite project. The project, located near Croydon in north Queensland (see Figure 3), covers a combined area of more than 500 km² and is held 100% by Metallica’s wholly–owned subsidiary, Touchstone Resources Pty Ltd.

Metallica has identified significant graphite occurrences within the Esmeralda granites in the project area. These occurrences were first identified in 2006 by Metallica during a drilling program that targeted well–defined airborne and ground–defined intense electromagnetic (EM) anomalies. At the time, the drilling focused on base metal and gold–bearing massive sulphide mineralisation. Instead of sulphides, Metallica identified significant graphite mineralisation. The discovery was unexpected

because graphite is rarely associated with igneous rocks, such as granite.

Subsequently, a literature review of graphite occurrences in the Esmeralda granites and Croydon volcanics indicated large suites of potentially graphite–bearing igneous rocks. Metallica has identified targets where magmatic differentiation or structural controls could concentrate graphite into significantly higher percentages.

Previous percussion drilling, including the 2006 Metallica program, recorded significant zones of observable graphite mineralisation (>10% graphite visually) while exploring for metals and other types of mineralisation. Fourteen historic percussion exploration drill holes were identified intersecting significant graphitic granite.

Igneous or hydrothermal–style graphite deposits, such as Esmeralda, are rare. The more common metamorphic–style graphite deposits make up 95% of

the world’s known graphite deposits. Unlike the metamorphic–style deposits, hydrothermal–style graphite deposits are typically of high purity graphite in either flake or crystalline form. Examples of this style of mineralisation include the high–grade, narrow–vein Sri Lankan deposits and the Albany graphite deposit in Canada. The carbon source is non–organic and the carbon is thought to be from deep carbon dioxide (CO

2) or methane

(CH4) gaseous injection

into the magma chamber, which later crystallises out as pure or near–pure carbon (graphite) crystals.

Metallica has developed a hydrothermal mineralisation model for the Esmeralda granite based on work completed by the Bureau of Mineral Resources (BMR) in 1988 and the 2013 discovery of the Albany graphite deposit.

The Company mobilised a drill rig to site in October 2015 to carry out an initial drilling program on the

project. The assay results

confirmed thick graphite

(graphitic carbon – Cg)

mineralised intervals in the

first two exploration holes.

The core was assayed for

graphite content and total

carbon. In summary, both

drill holes (in a vertical

two–hole drilling program)

intersected significant broad

graphite mineralisation

(using a 3% Cg cut–off) with

continuous intercepts of:

WD001 – 95m @

6.5% Cg from 71m

WD002 – 29.1m @

7.8% Cg from 71.9m

An independent

petrology study has also

been completed on six

representative samples from

the mineralised zones. The

petrology study identified the

same distinctive alteration

and mineralisation style

present in both holes

and which is associated

with consistent grades,

indicating that the graphite

mineralisation may be

continuous for 1.2 km or more.

15


These results add strong support to the Company’s belief that the Warrior deposit, that makes up a part of the Esmeralda graphite project, is very large and would be uniquely amenable to large–scale bulk mining. WD001 ended in significant graphite mineralisation (4.1% Cg), with mineralisation open in all directions.

Metallurgical results, including those from the Mineral Liberation Analysis, show that 97.8% TC purity product can potentially be even further improved by removing impurities via conventional processing methods, including additional purification stages.

The test work followed standard procedures that involved crushing and preparation of representative drill core samples for bench scale floatation testwork. With the addition of standard floatation reagents, a concentrate grade of 91.5% TC (90.6% Cg) was able to be produced at a 91% recovery.

Further purification testwork using an additional single stage caustic bake and wash process, produced an even higher concentrate grade of 97.8% TC.

The Company completed an electromagnetic (EM) geophysics program in October 2016 to identify near surface graphite mineralisation for follow up testing. Data from this

program is being analysed to identify walk–up drill targets. These targets are planned to be drilled during 2017.

Metallica remains excited that Esmeralda hosts a very large mineralized system. The project will be developed methodically. However, the Company’s priority focus remains on delivering cash flow from the Urquhart bauxite project.

Esmeraldagrapite project

TOWNSVILLE

QUEENSLANDROCKHAMPTON

BUNDABERG

BRISBANE

CAIRNS

WEIPA

200 km0

N

COOKTOWN

KARUMBA

�

FIGURE 3: Esmeralda graphite project location

16


SCONI SCANDIUM, COBALT & NICKEL PROJECT

2,049 HaMining leases

155.6 km2

Exploration tenure

MLM 100%Through subsidiaries NORNICO Pty Ltd and Greenvale Operations Pty Ltd

478 HaMineral development licenses

The SCONI scandium–cobalt–nickel tri–metal project is located less than three hours’ drive northwest of Townsville, Queensland. The SCONI project consists of five deposits, Greenvale, Lucknow, Bell Creek, Minnamoolka and Kokomo, with granted mining leases covering all key deposits.

On the 10th of October 2016, Metallica announced that the Company had entered into a Farm–in and JV Agreement with Australian Mines Ltd (Australian Mines) (ASX:AUZ) over Metallica’s 100% owned SCONI project.

KEY TERMS OF THE AGREEMENT INCLUDE:

Stage 1 Earn–In

• Payment of $250,000 to Metallica on execution of the Agreement (now received)

• Australian Mines is able to earn 50% of SCONI after completing a Definitive Feasibility Study (DFS) or having expended $10 Million on the DFS within 4 years

Stage 2 Earn–In

• Australian Mines is able to earn a further 25% (total 75%) in the project after arranging suitable finance to fund the development plan laid out in the DFS within 18 months of completing Stage 1

Other terms within the Agreement are typical of these type of agreements and include maintaining the tenements, dilution, buy–out rights and change of control provisions.

The JV with Australian Mines over the SCONI Project delivers on Metallica’s commitment to create value from non–core assets, preserves Metallica’s significant past investment, whilst maintaining an exposure to the continued upside from the development of the SCONI project.

0 50 1 00km

N

MINNAMOOLKA

BELL CREEK

SCONI PROJECT AREA

KOKOMO

GREENVALE

LUCKNOW

CAIRNS

MOURILYANHARBOUR

QNI YabuluNickel Refinery

TOWNSVILLE

LUCKY BREAKNICKEL PROJECT

GREENVALETOWNSHIP

FORMER GREENVALENICKEL MINE

AUSTRALIA

Greenvale Nickel Province

Nickel Laterite Deposits

Innisfail

Atherton

Mareeba

Chillagoe

Mount Garnet Ravenshoe

Gunnawarra

Woodstock

Ingham

Sun MetalsZinc Refinery

(Acid Supplier)

Charters Towers

FIGURE 4: SCONI project location

17


CAPE FLATTERY SILICA SANDS

Silica SandsFor bulk export shipping

MLM 100%Through subsidiary Oresome Australia Pty Ltd

54 km2

Exploration tenure

The Cape Flattery silica sands project is located approximately 200 km north of Cairns in North Queensland (see Figure 5). The EPM covers part of a large Quaternary sand dune field, a section of which is currently being mined by Cape Flattery Silica Mines Pty Ltd (CFSM), a wholly–owned subsidiary of Mitsubishi Corporation.

The adjacent CFSM operation has operated since 1967 and is the world’s largest silica sand mining operation. The dune field is known to contain high grade silica sands. Metallica will evaluate its potential for development as a silica sand mining and bulk shipping operation.

TOWNSVILLE

QUEENSLANDROCKHAMPTON

BUNDABERG

BRISBANE

CAIRNS

WEIPA

200 km0

N

COOKTOWN

KARUMBA

�

Cape Flattery silica sands project

FIGURE 5: Cape Flattery silica sands project location

18


ANDREW L GILLIES NON–EXECUTIVE DIRECTOR

Mr Gillies was Managing Director of the Company (from listing of the Company in 2004) until 13 July 2015 and now holds the position of Non–Executive Director.

Andrew graduated from the University of Queensland in 1985 with a Bachelor or Science (Geology), and is a member of Aus.I.M.M. Mr Gillies’ key strength is mineral resource management and strategic planning specialising in project generation, selection, evaluation and acquisition. Since 1985 he has worked continuously as a geologist in the mining and exploration industry, accruing over 30 years’ experience across a range of commodities. He has valuable experience in the fields of exploration, feasibility studies, development, open pit and underground mining of mineral deposits and resource company management. Mr Gillies, though his company Golden Breed Pty Ltd and super fund holds 11.1 million shares in Metallica.

BARRY J CASSON NON–EXECUTIVE CHAIRMAN

Mr Casson was appointed Chairman of the Board on 30 June 2015, Barry has been a Non–Executive Director since 1 December 2010.

Barry has more than 40 years’ experience in accounting, finance, corporate and general management with numerous listed and unlisted companies, primarily in the resources industry since the early 1980’s. He has had extensive international experience in project financing and corporate transactions.

He is also a Non–Executive Director of Unitywater (a statutory authority) since 2013.

DIRECTOR PROFILES

DR SHU WU NON–EXECUTIVE DIRECTOR

Dr Wu Shu is a Director of Jien Mining Pty Ltd which holds 17.64% or 40,099,678 shares in Metallica Minerals Limited.

He is Chairman and Director of Jilin Jien Nickel Industry Co. Ltd listed on the Shanghai Stock Exchange (Director since 2003), Director of Liberty Mines Inc. listed on the TSX, Canada (director since 2009).

DR SHU ZHANG ALTERNATE NON–EXECUTIVE DIRECTOR TO DR SHU WU

Dr Shu Zhang has over 40 years’ experience in mining, first as a Miner, then a Mining Engineer, and later an Executive Manager in operations and project development in companies in Australia, China, and Canada.

Dr Zhang was one of the key members who played a critical role in the successful development of Sino Gold Mining Limited.

Dr Zhang has worked for the Jilin Nickel Group since 2011, and is a Director of Jilin’s Canadian subsidiaries, being the unlisted Canadian Royalties Inc., and the TSX listed Northern Sun Mining Corporation (until April 2016).

19


MANAGEMENT PROFILES

SIMON SLESAREWICH CHIEF EXECUTIVE OFFICER

Mr Slesarewich was appointed to the position of Chief Executive Officer on 13 July 2015.

Simon is a Mining Engineer and registered Senior Site Executive in Queensland, has more than 18 years’ experience across a range of jurisdictions, including a strong background in operational and executive roles within both mining and contracting entities.

He holds a Bachelor of Engineering (Mining) from the University of Queensland and Graduate Diplomas in Administration, as well as Applied Finance and Investment.

Simon is the former CEO of Northern Discovery Limited and Boardwalk Resources Limited and is a renowned bulk commodities and business turnaround specialist.

JOHN K HALEY COMPANY SECRETARY & CFO

Mr Haley has over 35 years of senior corporate experience in Canada and Australia.

He has a diverse career in a range of industries including mineral exploration and has assisted in the startup of various mineral exploration companies. He is a Director of the Queensland Resources Council.

John has previously worked with Coopers & Lybrand and Arthur Andersen & Co., and with listed and unlisted companies in general management, financial reporting and company secretarial positions.


20

TENEMENT TABLES

21


BAUXITE & HEAVY MINERAL SANDS

Tenement Project Name Holder/Applicant Status Area

ML 20669 Urquhart Point Oresome Australia P/L | Ozore Resources P/L Granted 366.0739 Ha

ML 20737Mbung Urquhart Point

ExtensionOresome Australia P/L | Ozore Resources P/L Granted 5.4074 Ha

EPM 15268 Urquhart Point Oresome Australia P/L | Ozore Resources P/L Granted 16 s/b

EPM 15371 Doughboy Oresome Australia P/L | Ozore Resources P/L Granted 13 s/b

EPM 15372 Jardine Oresome Australia P/L | Ozore Resources P/L Granted 29 s/b

EPM 18015 Jackson River #2 Oresome Australia P/L | Ozore Resources P/L Granted 4 s/b

EPM 18737 Sandman #3 Oresome Australia P/L | Ozore Resources P/L Granted 34 s/b







EPM 25611 Upper Embley Oresome Australia P/L | Ozore Resources P/L Application 13 s/b

EPM 25687 Vrilya East Oresome Australia P/L | Ozore Resources P/L Granted 78 s/b

ML 100044 Urquhart Bauxite Oresome Australia P/L | Ozore Resources P/L Application 1372 Ha

ML 100049 Urquhart Bauxite #2 Oresome Australia P/L | Ozore Resources P/L Application 50.5 Ha

CAPE FLATTERY SILICA SANDS PROJECT

100% ORESOME AUSTRALIA PTY LTD


EPM 25734 Cape Flattery Oresome Australia P/L Granted 17 s/b

CAPE YORK BAUXITE & HMS JOINT VENTURE

50% ORESOME AUSTRALIA & 50% OZONE RESOURCES PTY LTD

TENEMENT TABLES

22


NICKEL–COBALT PROJECT – NORTH


ML 20549 Bell Creek Consolidated Nornico P/L Granted 393.3486 Ha

MDL 387 Minnamoolka Nornico P/L Granted 343 Ha

MDL 515 Bell Creek Nornico P/L Granted 135.6777 Ha

NICKEL–COBALT–SCANDIUM PROJECT – SOUTH


ML 10366 Lucknow Nornico P/L Granted 138.3000 Ha

ML 10368 Greenvale Greenvale Operations P/L Granted 1088 Ha

EPM 25865 Greenvale Lucknow #2 Greenvale Operations P/L Granted 13 s/b

ML 10342 Kokomo Nornico P/L Granted 419 s/b

EPM 25833 Kokomo Nornico P/L Granted 10 s/b

EPM 25834Greenvale Lucknow

Nornico P/L Granted 13 s/b

➤

LUCKY BREAK NICKEL PROJECTS


ML 10324 Dingo Dam Nornico P/L Granted 36.1716 Ha

ML 10332 Lucky Break Nornico P/L Granted 66.5400 Ha

SCONI PROJECTS NORTH & SOUTH & LUCKY BREAK

100% METALLICA MINERALS LTD

TENEMENT TABLES

23


PHOENIX LIMESTONE PROJECTS


EPM 25728 Fairview Phoenix Lime P/L Granted 5 s/b

EPM 25756 Fairview #1 Phoenix Lime P/L Granted 1 s/b

ESMERALDA GRAPHITE PROJECT


EPM 25779 Warrior Touchstone Resources P/L Granted 19 s/b

EPM 25806 Esmeralda West Touchstone Resources P/L Granted 80 s/b

EPM 25807 Esmeralda East Touchstone Resources P/L Granted 80 s/b

NOTES

All tenements are 100% owned unless expressed otherwise EPM – Exploration Permit for Minerals MDL – Mineral Development License ML – Mining Lease S/B – Sub blocks Ha – Hectares

PHOENIX LIMESTONE PROJECTS & ESMERALDA GRAPHITE PROJECT

100% METALLICA MINERALS LTD

TENEMENT TABLES


24

RESOURCE TABLES

25


DSB in–situ Screened 1.2mm

Area Kt Al2O

3

%SiO

2

%Kt^ Yield

%Al

2O

3

%SiO

2

%

A 5,121 52.0 15.0 3,769 73.6 56.8 7.0

B 2,366 48.8 19.0 1,505 63.6 54.4 9.3

Totals 7,487 51.0 16.3 5,274 70.5 56.1 7.6

URQUHART DSB RESOURCE STATEMENT FOR THE LOWER BAUXITE PROFILE

DSB in–situ Screened 1.2mm

Area Kt Al2O

3

%SiO

2

%AAI %

RSi %

Kt^ Yield %

Al2O

3

%SiO

2

%

A 3,987 53.3 13.0 40.6 4.9 3,037 76.2 57.1 6.7

B 777 52.7 13.2 – – 486 62.6 56.1 7.0

Totals 4,764 53.2 13.0 – – 3,523 74.0 56.9 6.7

NOTES

1. Tonnages are a subset of those reported in the table above

2. ^ Recovered tonnage (tonnes x yield) for the same DSB cut–off grade and DSB in–situ dry tonnage

3. AAI = Available alumina Al20

3

4. RSi = Reactive Silica SiO2

5. The information in the table above is summarised from the JORC 2012 Mineral Resource in the ASX Release dated 11 May 2015.

URQUHART DSB RESOURCE STATEMENT DETAILS

45% Al2O

3 COG

RESOURCE TABLES

26


Project Permit Discrete TargetsInsitu mineralisation

tonnage range Mt2

Total Al2O

3

%3

Total SiO2

%3

Vrilya EPM15371 3 2 to 6 40–47 insufficient data1

Vrilya EPMA25509 7 12 to 36 40–48 10–191

Vrilya East EPMA25687 3 28 to 86 40–43 insufficient data1

TOTALS 13 42 to 128

Within Cape York Bauxite and HMS Joint Venture’s 1,257 km² exploration tenement portfolio in Western Cape York bauxite province, Far North Queensland includes coastal bauxite targets near Vrilya Point 160 km north of Weipa (see Figure 1)

Metallica has identified 13 priority highly prospective bauxite zones within Oresome’s tenement package near Urquhart and Vrilya Point adjoining Rio Tinto’s mining leases, (which cover substantial good quality bauxite deposits) see Figure 1.

*EXPLORATION TARGET

The potential quantity and grade of the bauxite deposits are conceptual in nature. There is insufficient information at this time to define a mineral resource and there is no certainty that further exploration will result in the determination of a mineral resource in these areas.

1. previous exploration reports SiO2 data incomplete

2. range based on measured areas of target plateaus, minimum thickness of >0.5 m bauxite, estimated average thickness of 1.5 m from previous exploration data and bulk density value of 1.5

3. based on screened sample assay results

The information in the table above is summarised from the JORC 2012 Mineral Resource in the ASX Release dated 11 July 2014.

THE INFORMATION IN THIS REPORT THAT RELATES TO EXPLORATION RESULTS AND EXPLORATION TARGETS IS BASED ON INFORMATION COMPILED BY JOHN CAMERON (A GEOLOGIST OF OVER 25 YEARS EXPERIENCE), AND A COMPETENT PERSON WHO IS A MEMBER OF THE AUSTRALASIAN INSTITUTE OF MINING AND METALLURGY AND A CONTRACT CONSULTANT TO METALLICA MINERALS LTD. MR CAMERON HAS SUFFICIENT EXPERIENCE WHICH IS RELEVANT TO THE STYLE OF MINERALISATION AND TYPE OF DEPOSIT UNDER CONSIDERATION AND TO THE ACTIVITY BEING UNDERTAKEN TO QUALIFY AS COMPETENT PERSON AS DEFINED IN THE 2012 EDITION OF THE AUSTRALASIAN CODE FOR REPORTING OF EXPLORATION RESULTS, MINERAL RESOURCES AND ORE RESERVES. MR CAMERON CONSENTS TO THE INCLUSION OF THIS INFORMATION IN THE FORM AND CONTEXT IN WHICH IT APPEARS IN THIS REPORT.

CAPE YORK BAUXITE AND HMS JOINT VENTURE

REGIONAL BAUXITE EXPLORATION TARGETS

RESOURCE TABLES

27


Resource Category

Tonnes t

HM %

HM tonnes

OS %

Slimes %

Zircon %

Rutile %

Ilmenite %

Measured 1,945,360 6.92 134,529 13.83 1.07 10.2 12.5 12.5

Indicated 1,365,440 4.60 62,746 15.33 1.15 11.4 10.9 13.2

Totals 3,310,800 5.96 197,275 14.45 1.11 10.6 12.0 12.7

MINERAL RESOURCE CONSTRAINED BY MINING LEASE & ENVIRONMENTAL BUFFERS – 0% HM COG

Resource Category

Tonnes t

HM %

HM tonnes

OS %

Slimes %

Zircon %

Rutile %

Ilmenite %

Measured 1,882,960 6.57 123,716 14.17 1.07 9.7 12.0 12.4

Indicated 1,345,840 4.60 61,930 15.41 1.16 11.4 10.9 13.2

Totals 3,228,800 5.75 185,646 14.68 1.11 10.3 11.6 12.7

MINERAL RESOURCE CONSTRAINED BY MINING LEASE & ENVIRONMENTAL BUFFERS – 2% HM COG

Resource Category

Tonnes t

HM %

HM tonnes

OS %

Slimes %

Zircon %

Rutile %

Ilmenite %

Measured 1,781,360 6.85 122,090 12.46 1.03 9.8 12.0 12.4

Indicated 1,305,680 4.70 61,335 14.44 1.15 11.4 10.9 13.2

Totals 3,087,040 5.94 183,425 13.30 1.08 10.3 11.6 12.7

The information in the table above is summarised from the JORC 2012 Mineral Resource in the ASX Release dated 20 May 2014.

URQUHART POINT HMS RESOURCE ESTIMATE

GLOBAL MINERAL RESOURCE – 0% HM COG

RESOURCE TABLES

28


Head Grade HM Tonnage & Mineral Assemblage

Ore Resource Category

Tonnes kt

HM %

OS %

Slimes %

Zr %

Rt %

Il %

HM kt

Zr % of HM

Rt % of HM

Il % of HM

Proved 967 10.6 8.1 1.0 1.2 1.4 1.4 102 11.1 13.7 12.9

Provable 210 4.8 6.7 1.2 0.9 0.6 0.7 10 17.7 13.2 14.4

Totals 1,177 9.5 7.9 1.0 1.1 1.3 1.2 112 11.7 13.6 13.1

NOTES

1. The Ore Reserves are based on the following forecast long term FOB prices: Zircon $1,500/t, Rutile US$1,200/t and Ilmenite US$200/t.

2. Ore Reserves are based on a Zircon Equivalent cut–off grade of 0.90%.

3. Zircon Equivalent = Zircon % + 0.8 x Rutile % + 0.13 x Ilmenite %. Recoveries used in the equivalence calculation are 98.2%, 98.0% and 95.8% for Zircon, Rutile and Ilmenite respectively.

4. The HMS Reserves have been independently estimated by consultants IMC Mining Pty Ltd.

5. For further information see ASX Release on Maiden Independent Ore Reserve for Urquhart Point HMS project dated 24 June 2014.

6. The information in the table above is summarised from the JORC 2012 Mineral Resource in the ASX Release dated 24 Jan 2014.

URQUHART POINT HMS RESERVE ESTIMATE

ORE RESERVE ESTIMATE – 0.90% (Zr + 0.8 Rt + 0.31 Il) COG

RESOURCE TABLES

29


Description Tonnes Mt

Ni %

Co %

Sc g/t

Ni Metal kt

Co Metal kt

Sc Metal t

Equivalent Sc Oxide t

KOKOMO

Measured 2.2 0.57 0.11 80 12.2 2.5 173 265

Indicated 17.2 0.56 0.09 49 95.8 15.5 843 1,292

Inferred 10.2 0.36 0.04 59 36.7 4.5 603 924

Totals 29.5 0.49 0.08 55 144.8 22.4 1,619 2,483

GREENVALE – INSITU, DUMPS AND STOCKPILES

Measured 5.4 0.77 0.06 39 41.6 3.3 208 319

Indicated 10.5 0.7 0.05 36 74.3 5.3 379 582

Inferred 11.5 0.42 0.03 44 48.8 4 509 781

Totals 27.4 0.6 0.04 40 164.8 12.7 1,097 1,682

LUCKNOW

Measured 1.7 0.45 0.1 103 7.9 1.8 180 276

Indicated 10.6 0.27 0.07 128 28.5 7.2 1,357 2,081

Inferred 1.5 0.4 0.07 41 5.8 1 60 92

Totals 13.8 0.31 0.07 116 42.2 10 1,597 2,449

COMBINED SOUTHERN DEPOSITS COG NICKEL EQUIVALENT = 0.7% (Ni + 1.5 Co + 0.01 Sc)

Measured 9.3 0.66 0.08 60 61.7 7.6 561 860

Indicated 38.3 0.52 0.07 67 198.7 28 2,580 3,957

Inferred 23.2 0.39 0.04 51 91.4 9.6 1,172 1,797

TOTALS 70.7 0.5 0.06 61 351.8 45.2 4,313 6,615

SCONI SOUTHERN DEPOSITS NI–CO & SC RESOURCE STATEMENTS

COG NICKEL EQUIVALENT = 1.0% (Ni + 1.5 Co + 0.01 Sc)

COMBINED SOUTHERN DEPOSITS

Measured 6.2 0.79 0.1 73 48.8 6.2 451 691

Indicated 23.2 0.56 0.08 92 129.5 19.5 2,140 3,282

Inferred 6.6 0.49 0.06 67 32.9 3.9 445 682

TOTALS 36.1 0.59 0.08 84 211.2 29.5 3,036 4,656

SCONI SOUTHERN DEPOSITS NI–CO & SC RESOURCE STATEMENTS


RESOURCE TABLES

30



Ni %

Co %

Ni Metal kt

Co Metal kt

BELL CREEK SOUTH

Measured 7.8 0.96 0.07 75.5 5.1

Indicated 0.1 0.81 0.05 1.2 0.1

Totals 8 0.96 0.06 76.7 5.2

BELL CREEK NORTH

Indicated 2 0.86 0.03 16.8 0.5

Totals 2 0.86 0.03 16.8 0.5

BELL CREEK NORTHWEST

Indicated 2.5 0.81 0.05 20.1 1.2

Totals 2.5 0.81 0.05 20.1 1.2

THE NECK

Indicated 0.4 0.84 0.03 3.5 0.1

Totals 0.4 0.84 0.03 3.5 0.1

MINNAMOOLKA

Indicated 4.7 0.82 0.05 38.3 2.1

Inferred 0.9 0.78 0.04 6.7 0.3

Totals 5.5 0.82 0.04 45 2.4

COMBINED NORTHERN DEPOSITS

Measured 7.8 0.96 0.07 75.5 5.1

Indicated 9.7 0.83 0.04 79.9 4

Inferred 0.9 0.78 0.04 6.7 0.3

TOTALS 18.4 0.88 0.05 162.1 9.4

NOTE

1. Variations in totals may be due to rounding factors

SCONI NORTHERN DEPOSITS NI–CO RESOURCE STATEMENTS

COG NICKEL EQUIVALENT = 0.7% (Ni + 1.5 Co)

RESOURCE TABLES

31



Ni %

Co %

Sc g/t

Ni Metal kt

Co Metal kt

Sc Metal t


KOKOMO

Totals 29.5 0.49 0.08 55 144.8 22.4 1,619 2,483

GREENVALE – INSITU

Totals 16.3 0.73 0.05 38 118.8 8.9 614 941

GREENVALE – DUMPS AND STOCKPILES

Totals 11.1 0.42 0.03 44 46 3.8 483 741

LUCKNOW

Totals 13.8 0.31 0.07 116 42.2 10 1,597 2,449

COMBINED SCONI SOUTH DEPOSITS RESOURCE

Measured 9.3 0.66 0.08 60 61.7 7.6 561 861

Indicated 38.3 0.52 0.07 67 198.7 28 2,580 3,956

Inferred 23.2 0.39 0.04 51 91.4 9.6 1,172 1,798

TOTALS 70.7 w0.5 0.06 61 351.8 45.2 4,313 6,615

BELL CREEK SOUTH

Totals 8 0.96 0.06 – 76.7 5.2 – –

BELL CREEK NORTH

Totals 2 0.86 0.03 – 16.8 0.5 – –


Totals 2.5 0.81 0.05 – 20.1 1.2 – –

THE NECK

Totals 0.4 0.84 0.03 – 3.5 0.1 – –

MINNAMOOLKA

Totals 5.5 0.82 0.04 – 45 2.4 – –

COMBINED SCONI NORTHERN DEPOSITS RESOURCE

Measured 7.8 0.96 0.07 – 75.5 5.1 – –

Indicated 9.7 0.83 0.04 – 79.9 4 – –

Inferred 0.9 0.78 0.04 – 6.7 0.3 – –

TOTALS 18.4 0.88 0.05 48 162.1 9.4 - -

Combined SCONI Southern and Northern Deposits Resource

Measured 17.1 0.8 0.07 33 137.3 12.7 561 861

Indicated 48 0.58 0.07 54 278.6 32 2,580 3,956

Inferred 24 0.41 0.04 49 98.1 9.9 1,172 1,798

TOTALS 89.1 0.58 0.06 48 514 54.5 4,313 6,615

NOTE

1. In the Northern nickel deposits the Sc grade is typically very low (5–30g/t Sc), therefore no Sc Resource estimated. Resultant Sc grade for combined SCONI (South and North) Project is therefore low. Variations in totals may be due to rounding factors.

COMBINED SCONI DEPOSITS NI–CO & SC RESOURCE STATEMENTS


RESOURCE TABLES

32



Ni %

Co %

Sc g/t

Ni Metal kt

Co Metal kt

Sc Metal t


KOKOMO

Totals 13.9 0.56 0.1 80 77.4 14.2 1,108 1,699

GREENVALE – INSITU

Totals 9.5 0.95 0.07 39 90.3 6.9 365 560

GREENVALE – DUMPS AND STOCKPILES

Totals 2.6 0.58 0.05 40 15.1 1.3 103 158

LUCKNOW

Totals 10.1 0.28 0.07 145 28.4 7.3 1,459 2,238

COMBINED SCONI SOUTH DEPOSITS RESOURCE

Measured 6.2 0.79 0.1 73 48.8 6.2 451 691

Indicated 23.2 0.56 0.08 92 129.5 19.5 2,140 3,281

Inferred 6.6 0.49 0.06 67 32.9 3.9 445 682

TOTALS 36.1 0.59 0.08 84 211.2 29.5 3,036 4,656

BELL CREEK SOUTH

Totals 3.6 1.21 0.08 – 43.3 3 – –

BELL CREEK NORTH

Totals 0.4 1.16 0.04 – 4.8 0.1 – –


Totals 0.4 1.05 0.06 – 4.5 0.3 – –

THE NECK

Totals 0.1 1.17 0.03 – 0.9 0.02 – –

MINNAMOOLKA

Totals 1 1.07 0.08 – 11 0.8 – –

COMBINED SCONI NORTHERN DEPOSITS RESOURCE

Measured 3.6 1.21 0.08 – 43 3 – –

Indicated 1.9 1.09 0.06 – 20.4 1.2 – –

Inferred 0.1 1.04 0.07 – 1 0.1 – –

TOTALS 5.5 1.16 0.08 – 64.5 4.3 – –

COMBINED SCONI SOUTHERN AND NORTHERN DEPOSITS RESOURCE

Measured 9.8 0.94 0.09 46 91.9 9.2 451 692

Indicated 25.1 0.6 0.08 85 149.9 20.7 2,140 3,282

Inferred 6.7 0.5 0.06 66 33.9 3.9 445 682

TOTALS 41.6 0.66 0.08 73 275.7 33.8 3,036 4,656

NOTE

1. In the Northern nickel deposits the Sc grade is typically very low (5–30g/t Sc), therefore no Sc Resource estimated. Resultant Sc grade for combined SCONI (South and North) Project is therefore low. Variations in totals may be due to rounding factors.

COMBINED SCONI DEPOSITS Ni–Co & Sc RESOURCE STATEMENTS


RESOURCE TABLES

33


1. Scandium is typically sold as an oxide product. Hence the equivalent scandium oxide has been calculated at 1.534 times contained scandium metal.

2. The Mineral Resources for the Southern Deposits of Lucknow, Greenvale and Kokomo are reported at a cut–off grade (COG) of NiEq 0.7% (Ni + 1.5 Co + 0.01 Sc). This NiEq COG formula has been calculated using commodity prices of US$10/lb nickel, US$15/lb cobalt and US$1,500/kg scandium oxide, and recoveries of 90% for all three metals. Metallica indicates that the metallurgical testwork to date provides reasonable potential for the nickel, cobalt and scandium to be recovered at similar recoveries to those achieved in the testwork.

3. The Mineral Resources for the Northern Deposits of Bell Creek South, Bell Creek North, Bell Creek Northwest, Minnamoolka and The Neck are reported at a COG of NiEq 0.7% (Ni + 1.5 Co). This NiEq COG formula has been calculated using commodity prices of US$10/lb nickel and US$15/lb cobalt, and recoveries of 90% for both nickel and cobalt.

4. No scandium content was estimated in the Northern deposits as Sc assays are generally not available. From limited data there is good indication the Northern deposits are relatively low in Sc (generally between 5 and 30g/t Sc).

5. Variations in totals may be present due to rounding factors.

6. The information in the tables above is summarised from the JORC 2012 Mineral Resource Upgrade in the ASX Release dated 21 October 2013.

GOVERNANCE OF MINERAL RESOURCES

The Company engages external consultants and competent persons to prepare and calculate Mineral Resources estimates. These estimates and underlying assumptions are reviewed by the Board and Management for reasonableness and accuracy. The results of the Mineral Resource estimates are then reported in accordance with the JORC codes and other applicable rules. Where material changes occur during the year to a project, including project’s size, title or exploration results or other technical information, then previous resource estimates and market disclosures are reviewed for completeness.

The Company reviews it Mineral Resources annually. Where a material change has occurred in the assumptions or data used in previously reported Mineral Resources, a revised resource estimate will be prepared as part of the Annual review process.

MINERAL RESOURCES AND ORE RESERVES STATEMENTS NOTES

Tonnages, grades and contained metal have been rounded to reflect the accuracy of the calculations. Rounding errors may occur.

Mineral Resource are completed in accordance with JORC (2012) Australasian Code for Reporting of Exploration Results, Mineral Resources sand Ore Reserves. The information provided in this report is summarised from the latest Mineral Resource statements as referenced in each case.

The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements, and in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not materially changed from the original market announcement

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Certain statements made in this report contain or comprise certain forward–looking statements.

Although Metallica believes that the estimates and expectations reflected in such forward–looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward–looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory environment and other government actions, fluctuations in commodity prices and exchange rates and business and operational risk management. Metallica undertakes no obligation to update publicly or release any revisions to these forward–looking statements to reflect events or circumstances after today’s date or to reflect the occurrence of unanticipated events.

NOTES TO RESOURCE TABLES

34


Rank Name Shares %

1 JIEN MINING PTY LTD 40,099,678 17.64

2 ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD <CUSTODIAN A/C> 10,746,028 4.73

3 GOLDEN BREED PTY LTD 9,000,000 3.96

4 PLAN –1 PTY LTD 5,333,334 2.35

5 BONDLINE LIMITED 4,910,966 2.16

6 MINNELEX PTY LTD <PYPER FAMILY A/C> 3,352,208 1.47

7 J P MORGAN NOMINEES AUSTRALIA LIMITED 3,004,465 1.32

8 ASDEN INVESTMENTS PTY LIMITED <ASDEN P/L STAFF S/F A/C> 2,745,121 1.21

9 CODAN TRUSTEES <THE MOUNT COTTON ACCOUNT> 2,500,000 1.1

10 MR ANDREW LANGHAM GILLIES + MRS KAREN GILLIES <ANDREW GILLIES S/F A/C> 2,140,000 0.94

11 PURE WATER SYSTEM (AUST) PTY LTD <PURE WATER SYSTEMS S/F A/C> 2,000,000 0.88

12 CHINA XINFA GROUP CORPORATION LIMITED 1,964,386 0.86

13 MR JIMMY FAUSTO CAFFIERI + MRS LUCIA CAFFIERI <CAFFIERI FAMILY A/C> 1,916,667 0.84

14 JAMESBURY HOLDINGS PTY LTD <SUPERANNUATION FUND ACCOUNT> 1,700,000 0.75

14 MBM CORPORATION PTY LTD 1,700,000 0.75

15 ARMSTRONG ENERGY SERVICES PTY LTD 1,670,000 0.73

16AUSTRALIAN EXPORTS & INDUSTRIALISATION SUPER PTY LTD <BUCK FAMILY SUPER FUND A/C>

1,500,000 0.66

16 LATSOD PTY LTD <DOSTAL SUPERFUND A/C> 1,500,000 0.66

17 MAHE INVESTMENTS PTY LTD 1,377,226 0.61

18 ROBERT JOHN GILLIES 1,342,164 0.59

19 M2 ASSETS PTY LTD 1,216,667 0.54

20 BUNTER 46 PTY LTD 1,200,000 0.53

20 MR PAUL DOSTAL 1,200,000 0.53

TOTALS 104,118,910 45.80

BALANCE OF REGISTER 123,192,725 54.20

TOTAL SHARES ON ISSUE* 227,311,635 100

*As at 30 September 2016

TOP 20 SHAREHOLDERS

metallicaminerals.com.au

Documents

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