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ASX RELEASEMonday 21 October 2013
SCONI PROJECT, NORTH QUEENSLANDNICKEL-COBALT AND SCANDIUM RESOURCE UPGRADE
SCONI Project Nickel (Ni) Cobalt (Co) and Scandium (Sc) Mineral Resourcesupgraded and reported according to the guidelines of the JORC Code 2012
Additional Inferred (10.5 Mt at 0.9% Nickel Equivalent (NiEq*)) and Indicated(0.6 Mt at 1.0% NiEq) Mineral Resources for the SCONI southern depositsfollowing drilling of the old waste rock dumps containing scandium credits and acrusher oversize nickel stockpile at the former Greenvale Nickel Mine respectively
Infill drilling of the previous in-situ Inferred Mineral Resources areas atGreenvale has mostly resulted in an upgrade to Indicated and MeasuredResources categories
Total SCONI southern deposits (Greenvale, Lucknow, Kokomo) MineralResources increased by 19% to 70.7 Mt at 1.20% NiEq (previously 59.5 Mt at1.26% NiEq) using a 0.7% NiEq cut-off grade (COG) – see Table 1.
At a COG of 1.0% NiEq, the total Measured and Indicated Resources for theSCONI Southern deposits is 29.4 Mt at 1.62% NiEq – see Table 2
Resultant increase in the total SCONI Project being the Ni-Co-Sc south area(Greenvale, Lucknow, Kokomo) and the Ni-Co north area (Minnamoolka, BellCreek) Mineral Resources increased to 89.1 Mt at 1.15% NiEq (previously77.9 Mt at 1.19% NiEq) using a 0.7% NiEq COG. Total Measured and IndicatedResources increased by 2.5% to 65.1 Mt at 1.22% NiEq – see Table 4
Total SCONI Scandium Resources (Lucknow and Kokomo) is 12.0 Mt at 162 g/tSc (using 100 g/t Sc COG) containing approximately 2,989 t scandium oxide(Sc2O3) – see Table 5
Australian resource development company, Metallica Minerals Limited (ASX:MLM) is pleased toannounce an increase in the Mineral Resource estimate for its SCandium-CObalt-NIckel (SCONI)Project in North Queensland. The main change from the previous estimate follows the drilling andevaluation of the former Greenvale Mine waste dumps to a new Inferred Resource, the estimation of anew Indicated Resource contained within an old crusher oversize stockpile and the upgrading ofprevious in-situ Inferred Resources to Indicated and Measured Categories.
The accompanying document by Golder Associates provides further details of the resource estimate forGreenvale and the updated Mineral Resource statement for all SCONI deposits according to theguidelines of the JORC Code 2012 edition. This includes definition of the NiEq function, cut-off grades,detailed resource tables, JORC Code 2012 Table 1 information and competent person details.
*NiEq =(Ni + 1.5Co + 0.01Sc). The resources for the Southern Deposits of Lucknow, Greenvale and Kokomo arereported at a COG of NiEq 0.7% (Ni + 1.5Co + 0.01Sc). This NiEq COG formula has been calculated usingcommodity prices of US$10/lb nickel, US$15/lb cobalt and US$1,500/kg scandium oxide, and recoveries of 90% forall three metals.
The NiEq COG has been used to ensure all significant nickel, cobalt and scandium mineralisation isincluded in the resource estimate. Metallica indicates that the metallurgical testwork to date providesreasonable potential for the nickel, cobalt and scandium to be recovered at similar recoveries to thoseachieved in the testwork.
Table 1: Total SCONI Southern deposits Mineral Resources using a COG of 0.7% NiEq (Ni + 1.5Co + 0.01Sc)
Deposit Tonnes(Mt)
Nickel (Ni)%
Cobalt(Co) %
Scandium(Sc) g/t
Ni Metal(kt)
Co Metal(kt)
Sc Metal(t)
Sc Oxide(t)
KokomoMeasured 2.2 0.57 0.11 80 12.2 2.5 173 265Indicated 17.2 0.56 0.09 49 95.8 15.5 843 1,292Inferred 10.2 0.36 0.04 59 36.7 4.5 603 924Total 29.5 0.49 0.08 55 144.8 22.4 1,619 2,483Greenvale In-situMeasured 5.4 0.77 0.06 39 41.7 3.3 208 319Indicated 9.9 0.71 0.05 37 69.9 5.1 369 565Inferred 1.0 0.72 0.05 36 7.3 0.5 36 55Total 16.3 0.73 0.05 38 118.8 8.9 614 942Greenvale dumps and stockpilesIndicated 0.6 0.75 0.05 18 4.5 0.3 11 16Inferred 10.5 0.40 0.03 45 41.6 3.5 473 725Total 11.1 0.42 0.03 44 46.0 3.8 483 740LucknowMeasured 1.7 0.45 0.10 103 7.9 1.8 180 276Indicated 10.6 0.27 0.07 128 28.5 7.2 1,357 2,081Inferred 1.5 0.40 0.07 41 5.8 1.0 60 92Total 13.8 0.31 0.07 116 42.2 10.0 1,597 2,449Combined SCONI South Project ResourceMeasured 9.3 0.66 0.08 60 61.7 7.6 561 860Indicated 38.3 0.52 0.07 67 198.7 28.0 2,580 3,957Inferred 23.2 0.39 0.04 51 91.4 9.6 1,172 1,797Total 70.7 0.50 0.06 61 351.8 45.2 4,313 6,615
Table 2: Total SCONI Southern deposits Mineral Resources using a COG of 1.0% NiEq (Ni + 1.5Co + 0.01Sc)
Deposit Tonnes(Mt)
Nickel (Ni)%
Cobalt(Co) %
Scandium(Sc) g/t
Ni Metal(kt)
Co Metal(kt)
Sc Metal(t)
Sc Oxide(t)
KokomoMeasured 1.5 0.64 0.14 97 9.8 2.2 149 228Indicated 8.7 0.60 0.11 75 52.3 9.8 655 1,004Inferred 3.7 0.42 0.06 83 15.3 2.2 304 466Total 13.9 0.56 0.10 80 77.4 14.2 1,108 1,699Greenvale In-situMeasured 3.5 0.98 0.08 39 33.8 2.7 135 207Indicated 5.4 0.94 0.07 38 51.0 3.8 209 320Inferred 0.6 0.93 0.07 37 5.5 0.4 22 33Total 9.5 0.95 0.07 39 90.3 6.9 365 559Greenvale dumps and stockpilesIndicated 0.6 0.75 0.05 18 4.5 0.3 11 16Inferred 2.0 0.53 0.05 46 10.7 0.9 93 142Total 2.6 0.58 0.05 40 15.1 1.3 103 157LucknowMeasured 1.2 0.44 0.11 139 5.3 1.3 168 257Indicated 8.5 0.26 0.07 149 21.8 5.7 1,265 1,940Inferred 0.4 0.37 0.07 71 1.4 0.3 27 41Total 10.1 0.28 0.07 145 42.2 7.3 1,459 2,237Combined SCONI South Project ResourceMeasured 6.2 0.79 0.10 73 48.8 6.2 451 691Indicated 23.2 0.56 0.08 92 129.5 19.5 2,140 3,282Inferred 6.6 0.49 0.06 67 32.9 3.9 445 682Total 36.1 0.59 0.08 84 211.2 29.5 3,036 4,656
The resources for the Northern Deposits comprising of Bell Creek South, Bell Creek North, Bell CreekNorthwest, The Neck and Minnamoolka (Table 3) are reported at a COG of NiEq 0.7% (Ni + 1.5Co). ThisNiEq 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
Table 3: Total SCONI Northern deposits Mineral Resources using a COG of 0.7% NiEq (Ni + 1.5Co)
Deposit Tonnes(Mt) Ni (%) Co (%) Sc (g/t)* Ni Metal
(kt)Co Metal
(kt)Sc Metal
(t)Sc Oxide
(t)Bell Creek SouthMeasured 7.8 0.96 0.07 - 75.5 5.1 - -Indicated 0.1 0.81 0.05 - 1.2 0.1 - -Bell Creek NorthIndicated 2.0 0.86 0.03 - 16.8 0.5 - -Bell Creek NorthwestIndicated 2.5 0.81 0.05 - 20.1 1.2 - -The Neck (part Bell Creek)Indicated 0.4 0.84 0.03 - 3.5 0.1 - -MinnamoolkaIndicated 4.7 0.82 0.05 - 38.3 2.1 - -Inferred 0.9 0.78 0.04 - 6.7 0.3 - -Total 5.5 0.82 0.04 - 45.0 2.4 - -Combined SCONI Northern deposits ResourceMeasured 7.8 0.96 0.07 - 75.5 5.1 - -Indicated 9.7 0.83 0.04 - 79.9 4.0 - -Inferred 0.9 0.78 0.04 - 6.7 0.3 - -Total 18.4 0.88 0.05 - 162.1 9.4 - -*Note: Northern deposit Sc grade is typically low 5-30 g/t, therefore no Sc resource estimated.
Table 4: Combined SCONI (South and North) Project Mineral Resources using a COG of 0.7% NiEq
Deposit Tonnes(Mt) Ni (%) Co (%) Sc (g/t)* Ni Metal
(kt)Co Metal
(kt)Sc Metal
(t)Sc Oxide
(t)Measured 17.1 0.80 0.07 33 137.3 12.7 561 860Indicated 48.0 0.58 0.07 54 278.6 32.0 2,580 3,957Inferred 24.0 0.41 0.04 49 98.1 9.9 1,172 1,797Total 89.1 0.58 0.06 48 514.0 54.5 4,313 6,615*Note: Northern deposit Sc grade is typically low 5-30 g/t, therefore no Sc resource estimated. Resultant Sc gradefor combined SCONI (South and North) Project is therefore low.
Table 5: Total SCONI (Lucknow & Kokomo) Scandium Resources using a COG of 100g/t Sc
Deposit Tonnes(Mt)
Ni(%)
Co(%)
Sc(g/t)
Fe(%)
Mg(%)
Ni Metal(kt)
Co Metal(kt)
Sc Metal(t)
Sc Oxide(t)
LucknowMeasured 0.7 0.31 0.08 208 31.1 1.8 2.1 0.5 144 220Indicated 6.5 0.22 0.06 174 34.3 1.2 14.6 3.7 1,133 1,736Inferred 0.1 0.11 0.01 116 30.4 0.6 0.1 0.0 14 21Total 7.3 0.23 0.06 176 33.9 1.2 16.9 4.2 1,292 1,980KokomoMeasured 0.6 0.44 0.10 176 33.1 1.4 2.6 0.6 104 159Indicated 3.0 0.44 0.07 139 29.0 2.3 12.9 2.2 410 628Inferred 1.2 0.28 0.04 124 16.6 4.4 3.2 0.4 143 219Total 4.7 0.40 0.07 140 26.5 2.7 18.7 3.2 658 1,008Combined SCONI Scandium ResourceMeasured 1.3 0.37 0.09 193 32.0 1.6 4.7 1.1 249 381Indicated 9.5 0.29 0.06 163 32.6 1.5 27.5 5.9 1,544 2,366Inferred 1.3 0.26 0.03 124 18.0 4.0 3.3 0.4 158 242Total 20.0 0.30 0.06 162 31.0 1.8 35.5 7.4 1,950 2,989
Competent Persons StatementsThe SCONI scandium-cobalt-nickel project Mineral Resource estimate(s) is based upon and accuratelyreflects data compiled, validated or supervised by Mr John Horton, Principal Geologist FAusIMM (CP)who is a full time employee of Golder Associates Pty Ltd. Mr Horton has sufficient experience that isrelevant to the style of mineralisation and the type of deposit under consideration and to the activitywhich he has undertaken to qualify as a Competent Person as defined in the 2012 edition of the‘Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves’. MrHorton has reviewed this document and consents to the inclusion of this information in the form andcontext in which it appears in this release.
Exploration and evaluation data used as the basis for the resource estimate were compiled orcompleted under the supervision of Mr Andrew Gillies who is a Member of the Australasian Institute ofMining and Metallurgy and a full time employee of Metallica Minerals Limited. Mr Gillies has sufficientexperience that is relevant to the style of mineralisation and the type of deposit under consideration andto the activity which he has undertaken to qualify as a Competent Person as defined in the 2012 editionof the ‘Australasian Code for the Reporting of Exploration Results, Mineral Resources and OreReserves’. Mr Gillies has reviewed this document and consents to the inclusion of this information in theform and context in which it appears in this document.
For more information please contact:-
Andrew Gillies, Managing DirectorJohn Haley, Director/CFO
Phone: +61 07 3249 3000 / Email: [email protected]
Golder Associates Pty Ltd
147 Coronation Drive, Milton, Queensland 4064, Australia (PO Box 1734, Milton BC, QLD 4064)
Tel: +61 7 3721 5400 Fax: +61 7 3721 5401 www.golder.com
Golder Associates: Operations in Africa, Asia, Australasia, Europe, North America and South America
A.B.N. 64 006 107 857 Golder, Golder Associates and the GA globe design are trademarks of Golder Associates Corporation.
This document provides an update to the Greenvale Mineral Resource estimate completed by Golder
Associates Pty Ltd (Golder) and includes additional information from the exploration drilling programs
completed by Metallica Minerals Pty Ltd (Metallica) in 2012.
An update to the SCONI Mineral Resource statement is also provided with additional technical information
required to bring the SCONI Mineral Resources into compliance with the Australasian Code for the Reporting
of Exploration Results, Mineral Resources and Ore Reserves (JORC 2012).
The Mineral Resources for the southern deposits of Lucknow, Greenvale and Kokomo are reported at a
nickel equivalent (NiEq) cut-off grade (COG) of 0.7% NiEq and 1.0% NiEq. Nickel equivalence is calculated
using the formula: NiEq = Ni + 1.5Co + 0.01Sc. This NiEq formula has been calculated using commodity
prices of US$10/lb nickel, US$15/lb cobalt and US$1500/kg scandium oxide, with recoveries of 90% for all
three metals. Metallica indicates that the metallurgical test work to date provides reasonable potential for the
nickel, cobalt and scandium to be recovered at similar recoveries to those achieved in the test work.
The Mineral Resources for the northern deposits of Bell Creek South, Bell Creek North, Bell Creek
Northwest, The Neck and Minnamoolka are reported at a COG of 0.7% NiEq (0.7% = Ni + 1.5Co). This NiEq
COG formula has been calculated using commodity prices of US$10/lb nickel, US$15/lb cobalt and
recoveries of 90% for both nickel and cobalt.
1.0 GREENVALE RESOURCE UPDATE
The Mineral Resource estimate for the Greenvale nickel laterite deposit, a former nickel mine, was updated
following:
99 RC/Aircore waste dump drill holes were completed by Metallica in 2012 to provide an initial estimate
for the existing mine waste dumps and one crusher oversize stockpile.
60 RC drill holes completed by Metallica in 2012 to infill and extend existing in-situ resources areas.
The updated resource estimate is now based on the assay results for 945 drill holes available in December
2012, including 141 drilled by the previous owner Straits Resource Exploration Ltd during 2007. Earlier
drilling is not used as it has not been verified and is generally not relevant to the areas estimated.
The estimated Ni-Co-Sc Mineral Resource is reported using a nickel equivalent (NiEq =Ni+1.5*Co+0.01*Sc)
cut-off grade of 0.7%. The basis for this equivalence is described in Section 4.3.7. The estimated (in-ground
or unmined) Mineral Resources include:
5.4 Mt at 0.77% Ni, 0.06% Co and 39 g/t Sc Measured Mineral Resource
9.9 Mt at 0.71% Ni, 0.05% Co and 37 g/t Sc Indicated Mineral Resource
1.0 Mt at 0.72% Ni, 0.05% Co and 36 g/t Sc Inferred Mineral Resource
16.3 Mt at 0.73% Ni, 0.05% Co and 38 g/t Sc Total Mineral Resource
21 Oct 2013 Document No. 117631033-005-Rev0
Metallica Minerals
GREENVALE MINERAL RESOURCE UPDATE &
SCONI JORC CODE 2012 STATEMENT
117631033-005-Rev0
Metallica Minerals 21 Oct 2013
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Details for the in-situ Mineral Resources are provided in Table 1 at 0.7% NiEq and Table 2 at 1.0% NiEq cut-
off. The two tables are inclusive.
Additional Mineral Resources for each waste dump were estimated and are presented in Table 3. Dumps are
currently reported on a whole dump basis with no selectivity assumed until further work can confirm a basis
for selective reporting of material. The reporting cut-off is applied to each dump. At 0.7% NiEq cut-off all the
dumps are included due to higher than expected scandium grade. The waste dump and stockpile material at
Greenvale includes:
External waste1 dumps. These are now mostly drilled out at 100 m spacing and are estimated and
defined as an Inferred Mineral Resource. Only relatively small thin areas are not currently defined by
drilling. A conservative in-situ bulk density is assumed at this stage.
Internal mine back fill material covers most of the Greenvale mine site. Definition of this material is
complicated by the variable pit floor and difficulty in distinguishing mined and remnant in-situ laterite
material. Though intersected by some drilling, internal backfill is not currently estimated.
Oversize stockpiles adjacent to the previous run of mine crusher and staging pad has been sampled by
18 surface pits and 28 RC drill holes at 50 m spacing. The drilling has defined an Indicated Mineral
Resource of higher grade material rejected by size from past mine ore feed with the test pits confirming
density and grade. There are indications that only half the reject stockpile area has been defined
providing scope for further exploration.
The waste dump and stockpile Mineral Resources at a 0.7% NiEq cut-off include:
0.6 Mt at 0.75% Ni, 0.05% Co and 18 g/t Sc Indicated Mineral Resource
10.5 Mt at 0.40% Ni, 0.03% Co and 45 g/t Sc Inferred Mineral Resource
11.1 Mt at 0.42% Ni, 0.03% Co and 44 g/t Sc Total Mineral Resource
Details of the waste dump and stockpile Mineral Resource are provided in Table 3. No cut-off grade is
applied for reporting the waste dump as individual block selectivity is not considered appropriate at this
stage. There is some potential for mine planning to define broad zones of higher grade material based on the
dump construction. Until selectivity can be demonstrated only the entire dump is selected for reporting.
Table 1: Greenvale in-situ Mineral Resource for a 0.7% NiEq cut-off
Classification Mt Density
t/m3
NiEq %
Ni %
Co %
Sc g/t
Fe %
Mg %
Measured 5.4 1.60 1.25 0.77 0.062 39 25.0 3.1
Indicated 9.9 1.61 1.15 0.71 0.051 37 22.2 3.6
Inferred 1.0 1.57 1.16 0.72 0.052 36 22.2 4.2
Total 16.3 1.60 1.19 0.73 0.055 38 23.1 3.5
Table 2: Greenvale in-situ Mineral Resource for a 1.0% NiEq cut-off
Classification Mt Density
t/m3
NiEq %
Ni %
Co %
Sc g/t
Fe %
Mg %
Measured 3.5 1.58 1.48 0.98 0.078 39 25.1 3.4
Indicated 5.4 1.56 1.43 0.94 0.069 38 23.4 3.8
Inferred 0.6 1.54 1.40 0.93 0.069 37 23.4 4.3
Total 9.5 1.57 1.45 0.95 0.072 39 24.0 3.7
1 Waste as defined during previous mining was determined for a different higher cost processing method and did not consider the recovery of scandium. This material is now
recognised as low grade mineralisation.
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Metallica Minerals 21 Oct 2013
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Table 3: Greenvale waste dump mineral resources
Classification Dump Area
Code* Mt
DBD t/m
3
NiEq %
Ni %
Co %
Sc g/t
Fe %
Mg %
Inferred
01 1.2 1.0 0.92 0.35 0.030 52 38.7 0.3
03 1.1 1.0 1.04 0.44 0.040 54 35.0 0.5
04 0.3 1.0 1.09 0.68 0.075 30 20.0 1.4
05 0.8 1.0 0.86 0.38 0.030 44 38.7 0.5
06 0.7 1.0 0.97 0.47 0.024 46 39.9 0.8
07 4.2 1.0 0.80 0.32 0.028 43 29.5 0.4
08 0.7 1.0 0.89 0.36 0.028 48 30.6 0.4
09 0.9 1.0 0.98 0.50 0.049 41 24.1 1.8
10 0.6 1.0 1.11 0.64 0.046 40 27.5 3.0
Sub-total 10.5 1.0 0.90 0.40 0.033 45 31.8 0.7
Indicated 11 0.6 1.75 1.01 0.75 0.054 18 12.1 4.6
Total 11.1 1.02 0.90 0.42 0.035 44 30.7 0.9
*refer to Figure 1
All waste dump and oversize dump resource estimates represent new Mineral Resources for 2013. The in-
situ Mineral Resources were estimated and reported in 2011. The additional drilling included in the current
estimate is largely infill drilling at the Powerline deposit and to a lesser degree at Moonscape and Edge
South deposits (Figure 1). Some extensions at Powerline into lower grade regions have increased the total
Mineral Resource marginally, see Table 4. Improvements in drill spacing have resulted in an increase in
Measured and Indicated and a decrease in Inferred Mineral Resource.
Table 4: Greenvale in-situ Mineral Resource comparison at 0.7% NiEq cut-off
Class 2013 Resource Model 2010 Resource Model*
Mt Ni % Co % Sc g/t Mt Ni % Co % Sc g/t
Measured 5.39 0.77 0.06 38.6 4.83 0.78 0.06 38.5
Indicated 9.94 0.70 0.05 37.2 9.48 0.71 0.05 38.0
Inferred 1.01 0.72 0.05 35.9 1.89 0.71 0.05 34.3
Total 16.34 0.73 0.05 37.6 16.20 0.73 0.05 37.7
*as per ASX announcement dated 19 Jan 2011 which used a different cut-off grade formulae that did not include Sc
The Greenvale Mineral Resource (in-situ) estimate is appropriate for a selective open pit mining scenario.
The estimate does not account for mining dilution or mining losses. Key features of the project are:
Detailed topography was derived from recent WorldView-2 satellite imagery.
Collars of holes drilled by Metallica were surveyed by independent contractors in 2010 and 2012.
Data collated by Straits Resource Exploration Ltd (Straits) in local grid were converted to MGA using
local and AMG coordinates surveyed by Straits. The Straits topography and drilling were lowered by
approximately 4 m RL as part of the grid conversion to best match the Metallica survey locations.
Drill holes used for resource estimation were drilled by Straits (141 holes in Aug 2007) and Metallica
(804 holes from 2010 to Dec 2012).
All drill holes used for resource estimation were drilled vertically. Visual inspection of some drill holes
indicated no significant down-hole deviations. Due to the relatively shallow nature of the drilling (98.5%
of holes ≤60 m) it is unlikely that significant drill hole deviations would have occurred.
Sample recovery in the mineralised zone by Metallica is believed to be good to excellent, including the
RC drilling of the waste dump areas.
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Metallica Minerals 21 Oct 2013
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Metallica’s in situ resource drilling was by face-sampling RC and the waste dump drilling predominantly
by face sampling air core. Straits’ drill holes were predominantly RC and some air core drilling.
Drill holes were sampled predominantly over 1 m intervals. Some 3 m intervals are present in
overburden and non-mineralised material.
Metallica used both riffle splitter and spear sub sampling methods at the drill rig for RC sample. Straits
used a grab sample approach due to the wet puggy nature of their samples.
ALS Chemex and SGS Laboratories (SGS) in Townsville were used for assaying Metallica and Straits
drill holes respectively. Both ALS Chemex and SGS used a four acid digest method with an Inductively
Coupled Plasma (ICP) finish.
The QAQC programs for Straits and Metallica drilling involved intra-laboratory pulp duplicates and blind
field duplicates and some certified reference material. The QAQC results reviewed in 2010 indicated
that the assays for both the Straits and Metallica drilling programs were adequate for resource
estimation purposes.
The mineralisation has a surface expression that was observed in places during a field visit by Mr
Horton. There has also been substantial mining at Greenvale. The In-situ areas estimated by Golder
appear to be remnant laterite blocks that have not been mined. The waste dump areas are all above
pre-mining topography and exclude in-pit waste.
Golder undertook basic validation checks of the drill hole database.
Drill hole data was composited to 1 m as this was the dominant sample interval in the mineralised
material.
Key features of the in-situ resource estimates include:
Appropriate high-grade top-cuts to nickel, cobalt and scandium outlier values were applied on a zone by
zone basis.
A wireframe of the paleo-laterite (enrichment) horizon between drill holes was constructed based on
sectional interpretations. A nominal 0.8% Ni was the underlying basis of a nickel mineralised wireframe.
A nominal 0.05% or 0.1% Co was the underlying basis of a cobalt mineralised wireframe depending of
the tenor of mineralisation within an area. Laterite profile wireframes were also constructed to constrain
major material types based on either geochemistry or logging.
The in-situ mineralised envelope wireframes include a nominal 20 m horizontal extrapolation from the
drill holes at the margins of the mineralised zone.
Nickel, cobalt, iron, magnesium, manganese, aluminium, calcium, chrome, copper and scandium were
estimated by ordinary kriging using a three pass search strategy with a maximum of 12 composites. A
maximum of 3 composites were selected from any one drill hole. A minimum of 10, 8, and 1 samples
were used for Passes 1, 2, and 3 respectively.
Hard boundaries were used between the mineralised envelopes and the laterite domains for nickel and
cobalt. All other elements used hard boundaries between different laterite horizons.
Unfolding methods were employed during variogram analysis and block grade estimation to adequately
represent the paleo-laterite (enrichment) horizon.
Internal dilution has been included and no dilution at the margins of the mineralised wireframe.
In majority of the resource areas, drilling was mostly on an approximately regular pattern of 20 m by
20 m or 20 m by 40 m (Measured) and 40 m by 40 m (Indicated). Inferred Mineral Resources were
mostly drilled on an approximately regular pattern of 80 m (NS) by 40 m (EW), with some small areas at
irregular spacing due to access issues.
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Dry bulk densities (DBD) were assigned to blocks according to nearest neighbour estimates of lithology.
Bulk density values applied were derived from 137 samples from Greenvale and other results from the
SCONI project.
Metallica advises that the 0.7% NiEq (Ni+1.5*Co+0.01*Sc) cut-off grade is considered appropriate for
large-scale mining based on ongoing feasibility studies for the combined SCONI nickel laterite project.
The suitability of this cut-off grade is to be confirmed by an economic evaluation and metallurgical test
work as part of feasibility study at Greenvale. Metallica have indicated that it is likely that initial small-
scale mining will be at a higher NiEq cut-off grade, in the order of 1.0% NiEq.
Resource classification is based on target drill spacing of 20 m by 20 m (or around 20 m by 40 m in the
Power Line area of the deposit, adjacent to the central historic mining area and where strong geological
and grade continuity exists) for Measured, 40 m by 40 m for Indicated and larger or irregular for Inferred
Mineral Resources. This classification is based on the continuity of the principal nickel and cobalt
mineralisation.
Mineral Resources were estimated for out-of-pit waste dumps as follows:
Waste dump boundaries were derived from recent air photography and one taken towards the end of
mining where dumps were move evident. The boundaries were registered to the current topography to
form the boundary of the out-of-pit waste dumps.
Drill assays defined the base of the out-of-pit dumps as the underlying material is generally not
mineralised. Pre-mining topography was available to define the base of the dump. Where available
drilling interpretation was taken in preference to pre-mining topography. Both drilling and the pre-mining
topography displayed good correlation.
The waste and oversize dump material estimation used inverse distance weight to a one half power and
a one to five flattening anisotropy unfolded to the base of the dump. This approach provides some
definition within a moving window without presuming excessive selectivity.
Each dump was estimated separately and for resource reporting block by block selectivity is not
considered appropriate. Hence only entire waste dumps should be reported or excluded for resource
reports. This does not preclude mine planning from defining broad zones of sub-grade and grade
material confirmed by mine designs and which conform to the apparent method of dump construction.
Most dumps were drilled by Metallica are on a 100 m square grid pattern, altered to fit drill rig access.
This is considered suitable for Inferred classification on the basis of reporting the entire dump. The
oversize dump drilled to 40 m spacing is confirmed with higher grade surface test pits and some density
measurements. This dump is considered suitable for Indicated classification on the basis of reporting
the entire dump.
Additional out-of-pit dumps can be derived from scattered early drilling the pre-mining topography and
indicate an additional 11% more dump volume which is not yet adequately drilled for resource reporting.
Half of this is neighbouring the existing oversize dump and is likely to comprise more oversize material.
No in-pit-dump material is estimated at this stage although there are considerable areas of pit backfill at
Greenvale.
Both dump and in-situ estimates were compiled into a single resource block model with common features
including:
The block model was constructed by filling the mineralised wireframes with 10 m by 10 m by 1 m
blocks. Surrounding blocks were included at topography and base of drilling as well as peripheral to
mineralisation to permit open pit optimisation. Sub-blocking was not employed, with whole blocks
assigned to mineralised and geological domains on a maximum proportion basis.
Ordinary kriged in-situ and inverse distance weight dump estimates are combined into a single set of
grade fields.
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New 2012 drill collars in black and previous drill collars in grey
Figure 1: Greenvale Mineral Resources: in-situ (solid) and dumps (stippled)
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2.0 SCONI PROJECT
2.1 Resource statement
Table 5 shows the SCONI Mineral Resource has been updated with the additions and changes to the
Greenvale estimates listed.
The Mineral Resource estimates are presented in two groups. The northern deposits have insufficient
scandium assays for estimation and are all generally low in scandium content (5 to 30 g/t Sc). The limited
scandium assay data available for these deposits indicates that scandium will not be a significant economic
element. The southern deposits are higher in scandium and have been assayed routinely for scandium,
allowing scandium to be included in the resource statement and the equivalence calculation.
The Ni-Co-Sc Mineral Resource at a nickel equivalent cut-off grade of 0.7% NiEq (Ni+1.5*Co+0.01*Sc) is
listed in Table 5 and at 1.0% NiEq in Table 6. The basis for this equivalence is described in Section 4.3.7.
The Lucknow and Kokomo deposits have the potential to be developed as a high-grade scandium
processing option. Table 7 and Table 8 provide equivalent cut-offs for scandium at 70 g/t Sc and 100 g/t Sc
cut-off respectively. These tables are inclusive of the material presented in Table 5 and Table 6, providing
the higher grade scandium subset. Note Greenvale is lower in scandium and while a potentially important Ni-
Co co-product, it does not contribute to the high grade scandium material reported in Table 7 and Table 8.
The Mineral Resource estimate is based on information and responsibilities as follows:
Exploration and resource drilling were completed by Metallica.
Description of the geology and mineralisation, data analysis and Mineral Resource estimation were
completed by Golder.
A description of the SCONI project and setting is provided in Section 3.0. Additional technical details are
presented in Section 4.0 in the form and order of JORC 2012 Table 1.
2.2 Competent Person statement
The SCONI scandium-cobalt-nickel project Mineral Resource estimate(s) is based upon and accurately
reflects data compiled, validated or supervised by Mr John Horton, Principal Geologist FAusIMM (CP) who is
a full time employee of Golder Associates Pty Ltd. Mr Horton has sufficient experience that is relevant to the
style of mineralisation and the type of deposit under consideration and to the activity which he has
undertaken to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for the
Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Horton has reviewed this
document and consents to the inclusion of this information in the form and context in which it appears in this
release.
Exploration data used as the basis for the resource estimate were compiled or completed under the
supervision of Mr Andrew Gillies who is a Member of the Australasian Institute of Mining and Metallurgy and
a full time employee of Metallica. Mr Gillies has sufficient experience that is relevant to the style of
mineralisation and the type of deposit under consideration and to the activity which he has undertaken to
qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for the Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Mr Gillies has reviewed this document and
consents to the inclusion of this information in the form and context in which it appears in this release.
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Table 5: SCONI Mineral Resource at a 0.7% NiEq cut-off
Deposit Class-
ification Mt
Ni (%)
Co (%)
Sc* (g/t) Fe (%)
Mg (%)
Ni Metal (Kt)
Co Metal (Kt)
Sc Metal (t)
Bell Creek
South
Measured 7.8 0.96 0.07 - 12.4 7.4 75.5 5.1 -
Indicated 0.1 0.81 0.05 - 9.5 9.0 1.2 0.1 -
Inferred - - - - - - - - -
Total 8.0 0.96 0.06 - 12.4 7.4 76.7 5.2 -
Bell Creek
North
Measured - - - - - - - - -
Indicated 2.0 0.86 0.03 - 8.6 7.6 16.8 0.5 -
Inferred - - - - - - - - -
Total 2.0 0.86 0.03 - 8.6 7.6 16.8 0.5 -
Bell Creek
Northwest
Measured - - - - - - - - -
Indicated 2.5 0.81 0.05 - 15.5 5.4 20.1 1.2 -
Inferred - - - - - - - - -
Total 2.5 0.81 0.05 - 15.5 5.4 20.1 1.2 -
Bell Creek
The Neck
Measured - - - - - - - - -
Indicated 0.4 0.84 0.03 - 9.8 5.8 3.5 0.1 -
Inferred - - - - - - - - -
Total 0.4 0.84 0.03 - 9.8 5.8 3.5 0.1 -
Minnamoolka
Measured - - - - - - - - -
Indicated 4.7 0.82 0.05 - 12.0 10.3 38.3 2.1 -
Inferred 0.9 0.78 0.04 - 10.3 10.2 6.7 0.3 -
Total 5.5 0.82 0.04 - 11.8 10.3 45.0 2.4 -
Combined
SCONI
North Resource
Measured 7.8 0.96 0.07 - 12.4 7.4 75.5 5.1 -
Indicated 9.7 0.83 0.04 - 12.1 8.3 79.9 4.0 -
Inferred 0.9 0.78 0.04 - 10.3 10.2 6.7 0.3 -
Total 18.4 0.88 0.05 - 12.1 8.0 162.1 9.4 -
Kokomo
Measured 2.2 0.57 0.11 80 26.4 3.1 12.2 2.5 173
Indicated 17.2 0.56 0.09 49 25.9 2.8 95.8 15.5 843
Inferred 10.2 0.36 0.04 59 16.2 4.8 36.7 4.5 603
Total 29.5 0.49 0.08 55 22.6 3.5 144.8 22.4 1 619
Greenvale
In-situ
Measured 5.4 0.77 0.06 39 25.0 3.1 41.7 3.3 208
Indicated 9.9 0.71 0.05 37 22.2 3.6 69.9 5.1 369
Inferred 1.0 0.72 0.05 36 22.2 4.2 7.3 0.5 36
Total 16.3 0.73 0.05 38 23.1 3.5 118.8 8.9 614
Greenvale
dumps and stockpiles
Measured - - - - - - - - -
Indicated 0.6 0.75 0.05 18 12.1 4.6 4.5 0.3 11
Inferred 10.5 0.40 0.03 45 31.8 0.7 41.6 3.5 473
Total 11.1 0.42 0.03 44 30.7 0.9 46.0 3.8 483
Lucknow
Measured 1.7 0.45 0.10 103 27.1 2.0 7.9 1.8 180
Indicated 10.6 0.27 0.07 128 33.1 1.2 28.5 7.2 1 357
Inferred 1.5 0.40 0.07 41 37.1 1.0 5.8 1.0 60
Total 13.8 0.31 0.07 116 32.8 1.3 42.2 10.0 1 597
Combined
SCONI
South Resource
Measured 9.3 0.66 0.08 60 25.7 2.9 61.7 7.6 561
Indicated 38.3 0.52 0.07 67 26.7 2.6 198.7 28.0 2 580
Inferred 23.2 0.39 0.04 51 24.8 2.7 91.4 9.6 1 172
Total 70.7 0.50 0.06 61 26.0 2.7 351.8 45.2 4 313
Combined
SCONI Resource
Measured 17.1 0.80 0.07 33 19.6 5.0 137.3 12.7 561
Indicated 48.0 0.58 0.07 54 23.8 3.7 278.6 32.0 2 580
Inferred 24.0 0.41 0.04 49 24.3 3.0 98.1 9.9 1 172
Total 89.1 0.58 0.06 48 23.1 3.8 514.0 54.5 4 313
* Scandium for Bell Creek, Minnamoolka (Northern deposits) and not estimated as Sc content generally low (5 to 30 g/t). For the
purpose of combined or total resource, the Sc value is considered as nil.
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Table 6: SCONI Mineral Resource at a 1.0% NiEq cut-off
Deposit Class-
ification Mt
Ni (%)
Co (%)
Sc* (g/t) Fe (%)
Mg (%)
Ni Metal (Kt)
Co Metal (Kt)
Sc Metal (t)
Bell Creek
South
Measured 3.6 1.21 0.08 - 13.7 7.5 43.0 3.0 -
Indicated 0.03 1.04 0.09 - 10.3 8.3 0.3 0.0 -
Inferred - - - - - - - - -
Total 3.6 1.20 0.08 - 13.6 7.5 43.3 3.0 -
Bell Creek
North
Measured - - - - - - - - -
Indicated 0.4 1.16 0.04 - 9.0 7.3 4.8 0.1 -
Inferred - - - - - - - - -
Total 0.4 1.16 0.04 - 9.0 7.3 4.8 0.1 -
Bell Creek
Northwest
Measured - - - - - - - - -
Indicated 0.4 1.05 0.06 - 16.2 6.0 4.5 0.3 -
Inferred - - - - - - - - -
Total 0.4 1.05 0.06 - 16.2 6.0 4.5 0.3 -
Bell Creek
The Neck
Measured - - - - - - - - -
Indicated 0.1 1.17 0.03 - 10.1 5.5 0.9 0.0 -
Inferred - - - - - - - - -
Total 0.1 1.17 0.03 - 10.1 5.5 0.9 0.0 -
Minnamoolka
Measured - - - - - - - - -
Indicated 0.9 1.07 0.08 - 14.3 9.2 9.9 0.7 -
Inferred 0.1 1.04 0.07 - 14.1 8.9 1.0 0.1 -
Total 1.0 1.07 0.08 - 14.3 9.2 11.0 0.8 -
Combined
SCONI
North Resource
Measured 3.6 1.21 0.08 - 13.7 7.5 43.0 3.0 -
Indicated 1.9 1.09 0.06 - 13.4 7.9 20.4 1.2 -
Inferred 0.1 1.04 0.07 - 14.1 8.9 1.0 0.1 -
Total 5.5 1.16 0.08 - 13.6 7.7 64.5 4.3 -
Kokomo
Measured 1.5 0.64 0.14 97 26.8 3.2 9.8 2.2 149
Indicated 8.7 0.60 0.11 75 26.4 2.9 52.3 9.8 655
Inferred 3.7 0.42 0.06 83 18.3 3.9 15.3 2.2 304
Total 13.9 0.56 0.10 80 24.3 3.2 77.4 14.2 1 108
Greenvale
In-situ
Measured 3.5 0.98 0.08 39 25.1 3.4 33.8 2.7 135
Indicated 5.4 0.94 0.07 38 23.4 3.8 51.0 3.8 209
Inferred 0.6 0.93 0.07 37 23.4 4.3 5.5 0.4 22
Total 9.5 0.95 0.07 39 24.0 3.7 90.3 6.9 365
Greenvale
dumps and stockpiles
Measured - - - - - - - - -
Indicated 0.6 0.75 0.05 18 12.1 4.6 4.5 0.3 11
Inferred 2.0 0.53 0.05 46 30.7 1.3 10.7 0.9 93
Total 2.6 0.58 0.05 40 26.4 2.1 15.1 1.3 103
Lucknow
Measured 1.2 0.44 0.11 139 29.3 1.9 5.3 1.3 168
Indicated 8.5 0.26 0.07 149 33.7 1.3 21.8 5.7 1 265
Inferred 0.4 0.37 0.07 71 35.2 1.0 1.4 0.3 27
Total 10.1 0.28 0.07 145 33.3 1.3 28.4 7.3 1 459
Combined
SCONI
South Resource
Measured 6.2 0.79 0.10 73 26.3 3.1 48.8 6.2 451
Indicated 23.2 0.56 0.08 92 28.0 2.6 129.5 19.5 2 140
Inferred 6.6 0.49 0.06 67 23.4 3.0 32.9 3.9 445
Total 36.1 0.59 0.08 84 26.9 2.7 211.2 29.5 3 036
Combined
SCONI Resource
Measured 9.8 0.94 0.09 46 21.7 4.7 91.9 9.2 451
Indicated 25.1 0.60 0.08 85 26.9 3.0 149.9 20.7 2 140
Inferred 6.7 0.50 0.06 66 23.3 3.1 33.9 3.9 445
Total 41.6 0.66 0.08 73 25.1 3.4 275.7 33.8 3 036
* Scandium for Bell Creek, Minnamoolka (Northern deposits) and not estimated as Sc content generally low (5 to 30 g/t). For the
purpose of combined or total resource, the Sc value is considered as nil.
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Table 7: SCONI Mineral Resource at a 70 g/t Sc cut-off
Deposit Class-
ification Mt
Ni
(%)
Co
(%)
Sc
(g/t)
Fe
(%)
Mg
(%)
Ni Metal
(Kt)
Co Metal
(Kt)
Sc Metal
(t)
Lucknow
Measured 0.9 0.32 0.08 183 30.3 2.0 2.8 0.7 160
Indicated 8.2 0.22 0.05 157 34.5 1.2 17.7 4.2 1 278
Inferred 0.3 0.14 0.02 99 32.5 0.8 0.4 0.0 27
Total 9.3 0.22 0.05 157 34.0 1.2 20.9 5.0 1 464
Kokomo
Measured 1.0 0.45 0.10 140 31.5 1.8 4.4 1.0 137
Indicated 5.0 0.42 0.07 117 27.6 2.5 21.1 3.4 582
Inferred 4.7 0.22 0.03 91 13.9 5.9 10.1 1.3 430
Total 10.7 0.33 0.05 108 21.9 3.9 35.6 5.6 1 149
Combined SCONI South Resource
Measured 1.9 0.39 0.09 160 30.9 1.9 7.2 1.7 297
Indicated 13.2 0.29 0.06 141 31.9 1.7 38.8 7.6 1 860
Inferred 5.0 0.21 0.03 92 14.9 5.6 10.5 1.3 456
Total 20.0 0.28 0.05 131 27.5 2.7 56.5 10.6 2 613
Table 8: SCONI Mineral Resource at a 100 g/t Sc cut-off
Deposit Class-
ification Mt
Ni
(%)
Co
(%)
Sc
(g/t)
Fe
(%)
Mg
(%)
Ni Metal
(Kt)
Co Metal
(Kt)
Sc Metal
(t)
Lucknow
Measured 0.7 0.31 0.08 208 31.1 1.8 2.1 0.5 144
Indicated 6.5 0.22 0.06 174 34.3 1.2 14.6 3.7 1 133
Inferred 0.1 0.11 0.01 116 30.4 0.6 0.1 0.0 14
Total 7.3 0.23 0.06 176 33.9 1.2 16.9 4.2 1 292
Kokomo
Measured 0.6 0.44 0.10 176 33.1 1.4 2.6 0.6 104
Indicated 3.0 0.44 0.07 139 29.0 2.3 12.9 2.2 410
Inferred 1.2 0.28 0.04 124 16.6 4.4 3.2 0.4 143
Total 4.7 0.40 0.07 140 26.5 2.7 18.7 3.2 658
Combined SCONI South Resource
Measured 1.3 0.37 0.09 193 32.0 1.6 4.7 1.1 249
Indicated 9.5 0.29 0.06 163 32.6 1.5 27.5 5.9 1 544
Inferred 1.3 0.26 0.03 124 18.0 4.0 3.3 0.4 158
Total 12.0 0.30 0.06 162 31.0 1.8 35.5 7.4 1 950
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3.0 SCONI PROJECT SETTING
3.1 Location
The SCONI project in north Queensland consists of a number of nickel laterite deposits between the towns
of Mount Garnet and Greenvale approximately 250 km by road from Townsville, Figure 2. Mining was
undertaken at Greenvale from 1974 to 1992. Approximately 40 Mt of high grade nickel and cobalt ore was
transported by a now defunct railway line to the Yabulu nickel processing facility at Townsville. There is good
road access between Greenvale and Townsville.
Metallica has undertaken exploration activities at the SCONI project nickel laterite deposits with Mineral
Resources since 2006. Metallica has completed a pre-feasibility study for establishing a central processing
facility for the SCONI project at the existing Greenvale mine site. The following deposits have been assessed
to provide processing feed material to the SCONI Project:
Greenvale remnant in-situ resources, a previous mine oversize stockpile and previous mine external
waste2 dumps and is located 6 km west of the Greenvale township
Lucknow 6.5 km southeast of Greenvale
Kokomo 53 km northeast of Greenvale
Minnamoolka 91 km north-northeast of Greenvale
Bell Creek 115 km north-northeast of Greenvale.
The northern deposit could pre-process resource for further processing of as concentrate at Greenvale.
2 Waste as defined during previous mining was determined for a different higher cost processing method and did not consider the recovery of scandium.
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Figure 2: SCONI project location (by Metallica 2013)
3.2 Tenure
SCONI tenement holdings relevant to the resources estimated are summarised in Table 9. In most cases
exploration leases are in the process of being converted to mining leases. For Kokomo this process is
complete and the exploration lease will be left to expire. For Bell Creek, Greenvale and Lucknow this
process is ongoing and waiting the granting of the mining lease applications.
Table 9: SCONI tenement holdings
Tene-ment
Name Holder Status Date
Comm-enced
Date Expires
Sub-Blocks or Area
(ha)
Comment
EPM
11285 Bell Creek NORNICO Granted 28-Aug-96 27-Aug-13 6 Renewal lodged
MLA 20549
Bell Creek Consolidated
NORNICO Application 04-May-07
1224.4
ha Partial abandonment
MDL 387 Minnamoolka NORNICO Granted 20-Jun-08 30-Jun-13 654.3 ha Renewal sent
EPM 10699
Kokomo NORNICO Granted 22-Aug-95 21-Aug-13 11 Renewal withdrawn, tenement will expire
EPM
13873 Six Mile NORNICO Granted 11-Dec-02 10-Dec-13 1
After 6 sub-block reduction
ML 10342
Kokomo NORNICO Granted
30-Apr-34 1818.9
ha To be reduced to 1286
ha
EPM 10680
Lucknow North
GOP Granted* 18-Aug-95 31-Dec-15 3
EPM 10866
Lucknow South
GOP Granted* 12-Feb-96 31-Dec-15 4
MLA 10366
Lucknow NORNICO Application 15-Nov-11
268.9 ha Certificate of public
notice issued
EPM 11223
Dinner Creek GOP Granted* 12-Jul-96 31-Dec-15 7
MLA 10368
Greenvale GOP Application 20-Apr-12
3357.9 ha
COA issued
EPM 14066
Greenvale South
NORNICO Granted 13-May-03 23-Aug-04 26 Renewal and
reduction lodged
GOP = Greenvale Operations Pty Ltd NORNICO = NORNICO Pty Ltd * 1/4/2010 transferred from Straits
All tenements are held by either Greenvale Operations Pty Ltd or NORNICO Pty Ltd. Both companies are
wholly owned subsidiaries of Metallica Minerals Pty Ltd.
All Mineral Resources are located within the boundaries of valid exploration or mining leases. Expired
exploration leases in the process of being replaced with mining leases.
Figure 3 to Figure 7 display the location of the relevant tenements with respect to the estimated Mineral
Resources.
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Figure 3: Bell Creek tenements and Mineral Resource outlines
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Figure 4: Minnamoolka tenements and Mineral Resource outlines
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Figure 5: Kokomo tenements and Mineral Resource outlines
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Figure 6: Greenvale tenements and Mineral Resource outlines
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Figure 7: Lucknow tenements and Mineral Resource outlines
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3.3 Geology
The SCONI nickel-cobalt laterite deposits have formed on ultramafic rocks that include serpentinites, meta-
gabbros and pyroxenites. These occur as fragments of lower crust material rich in iron, magnesium and
nickel and are thought to be emplaced by shears and faults. This tectonic activity brings the ultramafic
fragments into the Proterozoic Shield and the Tasman Orogenic Belt, comprising Proterozoic meta-
sedimentary schists and meta-gabbros, Ordovician volcanogenic sediments and granitoids, and Devonian
limestone overlain by Neogene basalt.
The laterites, commonly occurring as plateaus of high ground, were formed by a period of prolonged
weathering that postdates the Cretaceous era. The nature of the laterites depends on the underlying
lithology and always overly strongly weathered rocks. The ultramafic rocks have a high background level of
nickel and cobalt (i.e. between 500 to 2 000 ppm Ni and 60 to100 ppm Co) and the process of lateritisation
has concentrated the nickel and cobalt to grades which can be exploited economically.
At Bell Creek (Figure 8) granite intrusives persist through into the laterite profile in places. A general
northeast structural trend is defined by faulting and foliation in the pre-granitoid sequence. A lateritised pre-
basalt peneplain is preserved on higher ground.
Minnamoolka (Figure 9) consists of a series of low lying hills underlain by serpentinite and ultramafics over
an area of approximately 3 km by 1.5 km. In the elevated areas laterisation is common and is characterised
by a Tertiary crust comprising siliceous ferruginous boxwork zones enriched in nickel-cobalt mineralisation
and separated by resistant cores of Proterozoic Halls Reward metamorphics. Although bounded by
granitoids, pegmatite veins are rare.
At Kokomo the ultramafic complex and overlying nickel laterite form an elongated north-northeast trending
body approximately 16 km long and up to 700 m wide that was tectonically emplaced within steeply dipping
metasediments and basic volcanics. The ultramafics vary from peridotites to dunites to pyroxenites in
composition and resemble a series of sill-like bodies forming ridge lines, bounded by predominantly
siltstones on the eastern and western margins. Regolith mapping by Metallica (Figure 10) confirms the
boundaries of the laterite and indicates potential burial of laterite by alluvial material in a few locations where
creeks cut across the ultramafic body.
At Greenvale (Figure 11) the serpentinites are interpreted as being formed in shear zones at the top and
edges of the meta-gabbro. Through the central sections of the Greenvale and Lucknow deposits the
serpentinite and the resultant laterite are generally flat lying at shallow depth, with the serpentinites and
resultant mineralisation becoming steeper with several structures dipping up to 70° on the edges of the
deposits. The lateritisation or weathering has been preferentially super-imposed on the softer serpentinite.
Weathering has resulted in the formation of limonite hosted nickel mineralisation and the formation of cobalt
mineralisation from the scavenging of cobalt by the accumulation of manganese oxide near the base of
weathering profile.
Several serpentinite units have been mapped in the Greenvale area. In addition to the flat lying Greenvale
serpentinite, 50 to 150 metres wide, steeply dipping serpentinite masses occur on both the eastern and
western margin of the Greenvale meta-gabbro. The serpentinite extends south from the Greenvale
serpentinite, under the Tertiary ferruginous sediments.
The Lucknow deposit has not been mined previously, apart from a 50 kt bulk sample targeting only nickel
and cobalt, which was excavated in the 1980’s by Queensland Nickel Ltd. The Lucknow laterite deposit has
formed on ultramafic units of either dunite or pyroxenite composition.
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Figure 8: Bell Creek regional geology (by Metallica, 2013)
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Figure 9: Minnamoolka geology (by Metallica 2011)
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Figure 10: Kokomo local regional geology (by Metallica, 2012)
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Figure 11: Greenvale-Lucknow regional geology (by Metallica 2012)
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3.4 Mineralisation
3.4.1 Greenvale mineralisation
The Greenvale deposit is well developed over a 4 km by 2 km area. Mining from 1974 to 1992 amounted to
40 Mt at 1.57% Ni and 0.12% Co.
Of the remnant unmined resource areas developed by Metallica, the two main areas that provide the bulk of
the higher grade nickel-cobalt laterite resources are the Powerline and the Edge deposits. A cross section
through the Powerline deposit is provided in Figure 12.
The laterite profile is well preserved at the Greenvale Mine site with drill holes intersecting a complete laterite
profile from natural surface soil cover down to poorly mineralised bedrock.
Post laterite sediments (soil, eluvium, and alluvium) cover the laterite in all drill holes collared at or close to
the original natural surface in the Powerline area. The thickness of ore is generally consistent and between 3
and 10 m and thins out only at the extreme western and eastern edges.
A pisolite horizon comprising spherical iron pebbles occurs in some holes. This horizon is generally less than
1 m thick and overlies the nickel laterite. The upper laterite zone is iron rich and depleted in nickel with
grades from 0.10% to 0.4% nickel. Below this zone is a thin layer of silica rich laterite and below is a limonitic
rich zone, high in iron with elevated nickel values between 0.40% and 2% nickel. High cobalt grades, usually
associated with manganese, also occur within the limonite zone. Below the limonite zone is a saprolite zone
which has much lower iron content and commonly contains high grade nickel but generally low cobalt. This
zone is a weathered ultramafic, predominantly grey to greenish grey in colour, has low clay content, is much
harder and is low in iron and nickel, but high in magnesium.
Figure 12: Greenvale (Power Line deposit) cross section (by Metallica 2010)
3.4.2 Lucknow mineralisation
The Lucknow deposit is well defined by a 4.7 km long by 450 m wide (300 to 700 m) lateritic profile that has
extensive relief changes due to erosion. The laterite profile at Lucknow is not as well developed as that at
Greenvale. The laterite is not as thick, only reaching depths of between 30 to 35 m and averaging 20 to25 m
in thickness. The overall nickel tenor at Lucknow is much lower than that at Greenvale, but the cobalt grades
are generally significantly higher. It is considered that majority of the underlying bedrock is a pyroxenite
whereas at Greenvale, it is more predominately dunite.
The laterite profile at Lucknow is capped by a pisolitic layer which in part is poorly cemented and
characterised by cobble-sized rocks or pebble-size pisolite. This layer can be between a few centimetres to 3
to 4 m thick. Below this is a hematite rich laterite clay layer which varies in colour from a dark brownish red
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colour to a more yellowish colour. This zone can contain either high nickel and cobalt grades or high
scandium. At the base of the haematite / limonite zone is a narrow, 2 to 5 m wide saprolite zone which lies
immediately above a grey-brown-pinkish pyroxenite.
At the edges of the Lucknow Plateau the laterite appears to be more massive and strongly siliceous and is
characterised by silica-boxwork, with chalcedonic quartz veins and magnesite veins being more prevalent on
the Plateau margins. On the slopes of the Plateau fresh and weakly weathered ultramafic rocks outcrop.
High grade nickel-cobalt zones at Lucknow are patchy and only occur as discrete pods within a blanket of
low grade nickel laterite. The iron content is generally higher than seen at Greenvale and averages between
25 to 40% iron.
Scandium concentrations are much higher at Lucknow than at Greenvale. Scandium values up to 1,580 g/t
have been recorded at Lucknow with the scandium rich zones generally averaging between 200 to 300 g/t
Sc (the average scandium grade for Greenvale is between 20 to 50 g/t Sc). To date the scandium
mineralisation has been particularly prominent in two areas, these areas are referred to as Grants Gully and
Red Fort, which are approximately 500 m apart. These two zones do merge but there is a drop in scandium
grade between the two zones.
The scandium mineralisation can be associated with high nickel-cobalt grades, but predominantly occurs
above or adjacent to the higher grade nickel cobalt mineralisation in the laterite profile, as seen at Grants
Gully (Figure 13). The scandium mineralisation can also occur in areas where the nickel and cobalt values
are very low, i.e. less than 1,000 ppm Ni and 100 ppm Co. In areas of high scandium there is usually a one
to four metre wide zone of high cobalt mineralisation at the base of the laterite profile, just above the
weathered ultramafic units, i.e. at Red Fort (Figure 14).
The high grade scandium results are probably a reflection of the underlying pre-cursor ultramafic unit which
is likely to be a pyroxenite as opposed to a gabbro or serpentinite. It is possible that the Lucknow ridge
comprises a layered sequence of ultramafic rocks of different composition that when lateritised, concentrate
either nickel, cobalt or scandium in the resultant laterite profile.
Figure 13: Lucknow Section at Grants Gully (by Metallica 2010)
TD 21m
TD 18mTD 18m
285,
000m
E
LKRC106
LKRC107
LKRC108
E
Low Grade Ni - Co Laterite
Medium to High Grade Ni - Co Laterite
Scandium Rich Laterite
Weathered Ultra Mafic
LEGEND
TD 18m
TD 24
TD 30m
8m @
1.01% Ni
0.09% Co
11g/t Sc
LKRC105
LKRC103
LKRC104
Looking North
8m @
0.56% Ni
0.21% Co
38g/t Sc
15m @
193g/t Sc
284,
900m
E
LKRC101
LKRC102
4m @
244g/t Sc
2m @
0.12% Co
TD 33m
TD 18m
TD31
13m @
0.71% Ni
0.29% Co
81g/t Sc
5m @
1.43% Ni
0.54% Co
291g/t Sc
LKRC099
LKRC100
27m @
882g/t Sc
2m @
0.11% Co
490m
485m
TD 27m
TD 12m
Base of Lateritisation
LKRC098
RL
500m
495m
W
12m @
272g/t Sc
460m
480m
475m
470m
465m
455m
450m
0 10 20
1:1,000
30 40 50 m
Horizontal Scale
(Vertical Exaggeration=2)
GRANTS GULLY NICKEL - COBALT - SCANDIUM ZONE
CROSS SECTION
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Figure 14: Lucknow Section at Red Fort (by Metallica, 2010)
3.4.3 Kokomo mineralisation
The ultra-mafic complex forms an elongate north-northeast trending ridge or set of ridge lines and plateau
areas which fall away sharply at the margins. The margins display a marked increase in nickel and cobalt
content, with examples of sections in Figure 15 and Figure 16. The enrichment of nickel and cobalt is the
result of water flow, assisted by the topography during laterite formation. This process of enrichment was
probably also potentially enhanced by tectonic structures orientated along the ultra-mafic boundaries that
may have assisted deeper weathering and greater water flow.
Enrichment of scandium at Kokomo along the margins is similar to that noted for nickel and cobalt. Drilling
results also support this enrichment although the highest grades are more patchy and localised. The higher
grade enrichment of scandium (>100 g/t Sc) is more localised than that at Lucknow .
Figure 15: Kokomo long section (by Metallica 2012)
E
LKRC141
25m @ 168g/t Sc
Laterite
<100g/t Sc
TD 24m
5m @ 0.46% Co
2m @ 0.72% Co
16m @ 202g/t Sc
5m @ 0.30% Co
Scandium Rich
Zone
(Laterite >100g/t Sc)
284,
750m
E
LKRC017
LKRC140
Looking North
26m @ 246g/t Sc
TD 27m TD 27m
TD 30m
PyroxenitePyroxenite
Laterite <100g/t Sc
284,
700m
E
LKRC139
27m @ 228g/t Sc
Cobalt RichCobalt RichCobalt RichCobalt RichCobalt RichCobalt RichCobalt RichCobalt RichCobalt Rich
ZoneZoneZoneZoneZoneZoneZoneZoneZone2m @ 0.16% Co
13m @ 202g/t Sc
495m
490m
W
RL500m LKRC146
Laterite <100g/t Sc
485m
480m
475m
470m
TD 24m
1m @ 0.14% Co
E
LKRC141
25m @ 168g/t Sc
Laterite
<100g/t Sc
TD 24m
5m @ 0.46% Co
2m @ 0.72% Co
16m @ 202g/t Sc
5m @ 0.30% Co
Scandium Rich
Zone
(Laterite >100g/t Sc)
284,
750m
E
LKRC017
LKRC140
Looking North
26m @ 246g/t Sc
TD 27m TD 27m
TD 30m
PyroxenitePyroxenite
Laterite <100g/t Sc
284,
700m
E
LKRC139
27m @ 228g/t Sc
Cobalt RichCobalt RichCobalt RichCobalt RichCobalt RichCobalt RichCobalt RichCobalt RichCobalt Rich
ZoneZoneZoneZoneZoneZoneZoneZoneZone2m @ 0.16% Co
13m @ 202g/t Sc
495m
490m
W
RL500m LKRC146
Laterite <100g/t Sc
485m
480m
475m
470m
TD 24m
1m @ 0.14% Co
0 5
1:500
10 15 20 m
Horizontal Scale
(Vertical exaggeration=2)
RED FORT SCANDIUM (Sc) ZONE
CROSS SECTION THROUGH HIGH GRADE SCANDIUM ZONE
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Figure 16: Kokomo (Mona deposit) cross section 7 946 820 mN (by Metallica 2010)
3.4.4 Bell Creek mineralisation
The Bell Creek laterites (Figure 17) are developed over serpentinite which is closely associated with mid-
Carboniferous granite intrusives. The ultra-mafic bodies occur as inliers in the granite, where the granite
occurs on the margins of the ultra-mafic units. Pegmatite dykes related to the granite intrusions cross cut the
ultra-mafic bodies. These pegmatite dykes are 1 to 3 m wide and are usually white, coarse-grained and
characterised by large (>5 mm) platy muscovite crystals. Isolated quartz blows have also intruded into the
serpentinites.
In more recent times, parts of the Bell Creek area have been covered by Quaternary sands, gravel, clays
and silts or Tertiary basalts of the McBride formation. The thickness of the sediments and basalts can vary
from a few meters to over 40 m and are usually underlain by either granites or rocks of the Halls Reward
Metamorphics.
The Bell Creek nickel laterite deposits comprise three separate bodies that are referred to as Bell Creek
South (BCS), Bell Creek North (BCN), Bell Creek Northwest (BCNW) and The Neck. BCNW is made up of
three separate zones of laterite enrichment known as Zones A to C.
The nickel mineralisation at the Bell Creek deposits occur throughout the laterite profile, which varies from a
siliceous honeycombed laterite, to a clay rich ferruginous laterite, to a basal, strongly weathered serpentinite
/ saprolitic zone. The laterite material forms a blanket over the ultra-mafic rocks that can vary in thickness
from 2 to 20 m. The contact with the fresher ultramafic rocks at the base of the laterite profile is uneven,
where peaks and troughs can be identified in cross section. Boulders of serpentinite also occur within the
laterite profile. These boulders can be between a few centimetres and in excess of 3 m in diameter.
At the southern end of BCS and in the western part of BCNW a layer of depleted nickel laterite overlies the
mineralised laterite. This depleted laterite layer varies in thickness from 1 to 40 m and is characterised by
being clay rich, nickel poor (<0.30% Ni) and iron rich (>20% Fe).
Figure 17: Bell Creek South cross section (by Metallica 2008)
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3.4.5 Minnamoolka mineralisation
Geochemically and physically the Minnamoolka laterite is very similar to the BCN laterite. Figure 18 displays
an example section.
The nickel laterite mineralisation varies in thickness from 1 m to in excess of 35 m, and generally starts from
surface forming a surface blanket over the topography. The zones of deeper lateritisation which occur at
Minnamoolka appear to be related to possible faults or fractures, as these zones have an apparent
northeast–southwest orientation. Elevated cobalt and iron values are associated with these deeper zones of
lateritisation.
Figure 18: Minnamoolka cross section (by Metallica 2008)
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4.0 JORC 2012 RESOURCE ESTIMATE DETAILS
The following sections present the details of the SCONI Mineral Resource estimates, collated from a series
of technical reports. The information is presented in the order and form of the JORC (2012) Table1.
4.1 Sampling techniques and data
4.1.1 Sampling techniques
The sampling method used by Metallica since 1997 involves the following methodology:
Samples from Reverse Circulation (RC) drilling were collected on 1 m intervals. The sample coming from the
drill face through the cyclone is collected in 600 mm by 400 mm plastic bags with the bag held under the
cyclone so the entire sample falls into the bag. The cyclone effectively homogenizes the sample coming up
through the drill string prior to it being deposited into the plastic bags. The cyclone/splitter reject material was
collected and held onsite until assaying was completed and there was no further immediate use for the reject
material.
A sample for the laboratory is then collected from the plastic bags. A “spear” method is used for this, with a
spear inserted into the bag and a “core” of the material in the plastic bag collected. A sample of between 1.5
to 3 kg is collected and put in calico bags which are labelled with the hole number and hole depth. These
numbers represent the “sample number”. No separate individual sample numbers are allocated to each
interval other than for check sampling.
The “spear” sub-sampling approach was tested during the early exploration at Bell Creek and Kokomo with
specific exhaustive duplicate sampling sets completed. This demonstrated the effectiveness of the
subsampling process which is considered acceptable. Drilling also used riffle splitting to compare to the
spear sampling method.
During the Metallica 2010 and 2012 drilling programme a field portable XRF unit was on site and most
samples were tested. Zones of low grade nickel mineralisation (<0.20% Ni) identified by the unit were
generally composited.
Surface samples and drill hole hand held field XRF analyses were undertaken by Metallica geologists to
confirm and direct the exploration program. These results are not considered for the resource evaluation.
Drilling used for resource estimation that predate Metallica’s drilling campaigns include:
Straits RC drilling at Greenvale completed in 2007 using standard cyclone and riffle splitting methods.
Anderson drilling.
4.1.2 Drilling techniques
All resource drilling by Metallica and Straits was mostly by RC methods and to a lesser extent air core, using
modern methods and high air pressures. All drilling used in the resource estimation was managed by
Metallica. However, in the case of Lucknow and Greenvale, certain recent Straits drilling was used as well.
Older drilling using uncertain methods and quality control were excluded for the purpose of this resource
estimation. Table 10 provides a summary of the data used in the estimation and the data that was excluded
(in grey).
Early drilling at Bell Creek was done using percussion methods and early RC drilling methods. Some
diamond drilling at Bell Creek was used in the resource estimate, using a mix of HQ and PQ size core.
PQ size diamond drilling by Metallica at other deposits was undertaken for metallurgical purposes and does
not contribute to the resource estimate other than providing bulk density samples.
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Table 10: SCONI drilling summary
Deposit Company Year Holes Meters Drilled
Method Comment
Lucknow
QNI 1980s (~140) 2 788 RC Not used
Annoconda 1998 (12) 242 RC Not used
Straits 2005 19 834 RC
Metallica 2010 298 7 030 RC
Metallica 2010 3 128 DDH Metallurgy - No Assays
Resource subtotal
317 7 864 RC
Greenvale
Metal Ex 1970 (266) 6 878 RC Not used
Anaconda 1998 (23) 733 RC Not used
Straits 2007-08 141 5 935 RC
Metallica 2010-12 805 20 652 RC
Metallica 2010 3 73.7 DDH Metallurgy - No Assays
Resource subtotal
946 26 587 RC
Kokomo Metallica 2000-09 1 056 28 787 RC
Metallica 2007-09 10 5,212 DDH Metallurgy - No Assays
Minna-moolka
Metallica 2003-07 345 6 604 RC
Austin Anderson 1971 (78) Percussion Locations lost
Bell Creek
Austin Anderson 1971-72 26 (215) 800 Percussion Full data for only 26 of 215 holes
Ashton Mining 1989-90 122 (255) 1 800 RC Full data for only 122 of 255 holes
Metallica 1998-07 919 16 525 RC
Metallica 2005-07 43 981 DDH
Resource subtotal
1 110 19 587 RC and
some DDH
4.1.3 Drill sample recovery
Metallica RC drilling generally used high air pressure to keep the laterite samples dry and maintain
reasonable recovery and sample splitting.
Metallica geologists indicated that the recovery for RC drilling by Metallica in the mineralised zone was good
to excellent. This was confirmed through observations by Golder at Greenvale and Kokomo during site visits.
The RC samples were not weighed to support this observation and the comments are based on expected
volume from 1 m sample intervals and the bit size used on the day.
The degree of recovery is not recorded for the Straits drill holes at Greenvale and Lucknow. However, their
reports indicated redrilling of several holes that did have unacceptable recovery.
Recovery information is unknown for early Bell Creek drilling by other parties.
4.1.4 Logging
Metallica had a competent geologist supervising the drilling and sampling at all times. The sample bags were
removed from the cyclone by the drillers’ off-sider and a Metallica field assistant then collected the samples,
and prepared them for submission to the analytical laboratory. A sampling and logging protocol was followed
by all geologists to maintain consistency.
The drill logs were standardised with set geological codes to limit the number of rock types and therefore
assist in geological interpretation. All the data from the geological logs were entered into Excel spread
sheets and the geology code entered into a database. The geological logs in digital format were made
available at Metallica’s Brisbane Office for review. Photographs of the RC chip trays were also taken. There
is on-site storage of chip trays and pulps.
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A logging process was developed by Metallica during initial exploration at Bell Creek and then applied
consistently to logging on all subsequent areas. The process was adapted slightly as new material types
were recognised. Logging consists of basic material characteristics and lithology. The logging of lithology
types were essential to understanding the laterite profile and are used in the application of density and
interpretation of the laterite domains. The main logged materials include:
Hm Haematite rich soil
Lfe Ferruginous laterite
Lsi Ferruginous laterite with silica boxwork
Lsap Saprolite
Wum Weathered ultramafic
Ser Serpentinite - fresh ultramafic
Other lithologies such as granite intersected at Bell Creek were also included
A few diamond drill core holes at each deposit were completed for metallurgical sampling. The core was
used to confirm the rock types and collect large whole core density measurements.
4.1.5 Sub-sampling techniques and sample preparation
RC drill hole samples were split at the drill rig and subsampled as described in Section 4.1.1. This produced
a field sample of 2 to 3 kg which was sent to an accredited laboratory for analysis. The principal laboratory
was changed during the exploration program from ALS to SGS with similar procedures and standard
methods. Both laboratories conform to Australian Standards ISO 9001 and ISO 17025.
For RC sample preparation and assaying the process at each laboratory is as follows:
SGS assaying techniques involve drying the samples and then milling the material in a LM5 Mill to a
nominal 85% passing 75 µm. An analytical pulp of approximately 220 g is sub-sampled and the milled
residue is retained for future reference. The “pulp” is then digested with 4 acids: nitric, hydrochloric,
hydrofluoric and perchloric acid to effect as near to total solubility of the metals in the sample as
possible. The resultant solution is then presented to an ICP for element quantification.
ALS uses a similar method to SGS. The RC samples are dried then the entire sample is pulverised to a
nominal 85% passing 75 µm. A “pulp” sample is split off and the residue is retained for future reference.
The “pulp” is then split down to 0.5 g which is digested in a mixture of nitric, perchloric and hydrofluoric
acids. The residue is then leached in hydrochloric acid and the resultant solution is made to 100 ml in a
volumetric flask. Elemental concentrations are determined simultaneously by Inductively Coupled
Plasma Atomic Emission Spectrometry (ICPAES). Accuracy and precision is improved through the use
of an internal standard.
4.1.6 Quality of assay data and laboratory tests
Both SGS and ALS laboratories used were experienced in processing and assaying nickel laterite samples
and used appropriate analytical methods. Both laboratories demonstrated the use of internal quality control
processes.
In addition Metallica regularly took RC duplicate field samples and submitted these for assay within the same
batch at a rate of approximately 1 in 45. Field XRF analyses were used to exclude drilling from duplicate
sampling if the entire hole returned insignificant results. The results were reviewed for each deposit and
these indicated that the combined sampling and assaying variance is less than 10% for all significant
elements. Magnesium displayed a higher variance but this is not unusual for nickel laterite deposits.
In 2008 Metallica obtained five independent certified reference standards from Geostats Pty Ltd in Perth.
These were first used at Kokomo in 2008 and in all subsequent drilling programmes at Kokomo, Greenvale
and Lucknow. The standards are only certified for nickel, copper and zinc, with Co, Fe, cobalt, iron, chrome
and scandium values available from single neutron activation analysis. The results were reviewed by Golder
for Kokomo in 2009 and Greenvale and Lucknow in 2010. The results were considered acceptable and
confirmed the relative accuracy of the assay laboratories.
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Check samples where the original or second split pulps were re-assayed at a second laboratory were
undertaken intermittently by Golder after all major drilling programmes. Review of the paired assays by
Golder indicated acceptable variations. Some issues with chrome analysis remain unresolved but do not
affect the Mineral Resource estimate. Check sample batches included:
48 check samples in 1998 from Bell Creek that were used to confirm the laboratory results.
298 check samples from Bell Creek and Minnamoolka in 2006.
169 check samples in 2008 for Kokomo.
196 check samples in 2010, with 109 from Greenvale and 87 from Lucknow.
Additional exhaustive check duplicate samples using the spear sampling method were undertaken at the Bell
Creek and Kokomo deposits. These tests indicated that the spear sampling provides acceptable
repeatability.
In 2007 Metallica also checked the spear sampling method against second duplicates derived from more
traditional riffle splitting. This displayed sufficient correlation to indicate the spear method was acceptable for
the primary sampling method.
4.1.7 Verification of sampling and assaying
No direct verification data exists as either independent re-assaying or twin drill holes were completed, with
the exception of three twin holes between Metallica and previous Bell Creek drilling. These provided
comparable results.
Golder observed field hand held XRF results at Greenvale and Kokomo drill rigs that were consistent with
the mineralisation.
Mineralisation defined by Metallica drilling at Greenvale is consistent with unmined areas adjacent to
previously mine areas.
Mineralisation and drilling results were confirmed by Straits’ drilling at the Greenvale and Lucknow deposits.
A trial mine area at Lucknow confirmed nickel mineralisation in one location.
All Mineral Resource areas were visited by Golder where laterite profiles consistent with nickel laterite
mineralisation were observed.
No other adjustments of the resource assay data were performed other than applying high grade top-cuts
and lower limits applied to reflect the assaying detection limit. Top-cuts were applied for all deposits for
nickel, cobalt and scandium to limit the impact of extreme grades. The top-cut values vary by laterite domain
but do not affect the metal content significantly.
The drill hole and GIS databases have been compiled by an independent contractor for the life of project.
Prior to the completion of the initial Mineral Resource estimate for each deposit, Golder undertook a data
audit that included a review of a portion of the databases supplied by Metallica against original assay
certificates. In each case the databases were found to be well constructed with a few minor issues identified
which were resolved before proceeding with grade estimation. Subsequent resource updates for some
deposits relied on comparison of the updated results to ensure consistency with previous work and
geological interpretations.
4.1.8 Location of data points
All drill holes were located by independent surveying companies, generally using Digital Global Positioning
System (DGPS) equipment to provide sub-metre accuracy for regional Map Grid of Australia (MGA)
coordinates.
Topography data was supplied separately and is both detailed and accurate. The data sets include:
Bell Creek and Minnamoolka used photogrammetry by Quasco Surveys Pty Ltd, which was flown in
2006.
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Kokomo used an airborne survey flown in Sep 2008 and processed by Schlenckner Mapping Pty Ltd.
Greenvale and Lucknow used WorldView-2 satellite imagery dated Dec 2010.
4.1.9 Data spacing and distribution
Resource classification (Section 4.3.12) is based on data spacing and should adequately reflect the
continuity and the risk of all areas. Extrapolation at the laterite margins is generally limited to half the drill
spacing or less where not closed out by subgrade drilling results.
Compositing to 1 m lengths was undertaken to ensure consistent sample support and search selection. In
most cases this has little effect as the majority of samples were 1 m in length.
4.1.10 Orientation of data in relation to geological structure
All drill holes were drilled vertically. This is generally the best angle to intersect the laterite profile that is
relatively thin and laterally extensive with horizontal continuity and a vertical grade profile.
4.1.11 Sample security
No specific security measures were undertaken for sampling and delivery. However in most cases the
samples were under the duty of care of the Metallica or contract geologist until delivery to the laboratory.
The sampling and dispatch process in most cases involved:
Sampling and logging completed at the drill rig and overseen by the Metallica or contract geologist,
Metallica sampler and independent drilling company crew.
Samples were contained within calico bags and bundled together into polyweave bags and stored at
either an exploration camp (until 2011) or at the Metallica office in the Greenvale township (from 2011)
until dispatched.
Transport of the samples was by a Metallica or a contract geology staff member.
Samples were received and checked against the dispatch sheet delivered separately or in person.
This process is considered acceptable as the type of mineralisation is not susceptible to tamper or
contamination.
4.1.12 Audits or reviews
Golder audited the assay database for each deposit during the initial Mineral Resource estimate and
resolved all issues prior to proceeding.
Golder inspected exploration practises and activities in the field on three different occasions. This included
independently surveying selected drill collars with a hand held GPS. All data processes that were reviewed
were considered acceptable.
Metallica undertook several exploration programs recommended by Golder to supplement QAQC or density
measurements.
4.2 Reporting of Exploration Results
4.2.1 Mineral tenement and land tenure status
The tenements covering the Greenvale Mineral Resource are 100% held by Metallica via wholly owned
subsidiary companies and is further described in Section 3.2
4.2.2 Exploration done by other parties
Metallica commenced exploration in 1997 in areas known to have nickel laterites. For most deposits the
previous exploration was limited and has not been used for resource evaluation purposes. The existence
and use of previous exploration drilling is summarised in Table 10.
At Bell Creek previous Austin Anderson and Ashton drilling has been used. This drilling has little available
QAQC or verification. Some holes were resurveyed but most rely on previous locations. Subsequent
Metallica drilling has verified the resource and now dominates most resource areas.
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At Lucknow and Greenvale early exploration drilling is available and Greenvale has subsequently been
mined. This early exploration data was used by Straits to undertake an exploration programme for scandium.
On acquiring the tenements from Straits Metallica targeted their exploration for nickel, cobalt and scandium
based on previous drilling. From the previous companies that explored the Lucknow and Greenvale deposits,
only the Straits drilling is supported with QAQC data and is considered adequate to be included in the
Mineral Resource estimate.
4.2.3 Geology
All the deposits are nickel laterites developed by weathering processes over fragments of ultramafic
basement rocks. Nickel, cobalt and scandium have been enriched from the basement rocks by both residual
and supergene processes. The geology is described in more detail in Section 3.3 and Section 3.4.
4.2.4 Drill hole information
Not relevant as exploration results are not included.
4.2.5 Data aggregation methods
Not relevant as exploration results are not included.
4.2.6 Relationship between mineralisation widths and intercept lengths
Nickel laterite deposits are relatively thin and laterally extensive. They have a vertical grade profile as a
result of the weathering processes that reduce with depth. Vertical RC drilling completed to date provides the
best drilling orientation as demonstrated in the example sections in Figure 12 to Figure 18
4.2.7 Diagrams
Plans of the resource areas are provided in Section 3.3 and Figure 8 to Figure 11.
Example cross sections are provided in Section 3.4 and Figure 12 to Figure 17.
4.2.8 Balanced reporting
Not relevant as exploration results are not included.
4.2.9 Other substantive exploration data
Golder is not aware of or has not been provided with exploration data outside of that drilling used for the
Mineral Resource estimate and which could significantly affect the resource estimate.
Metallica indicate metallurgical work his indicated favourable nickel, cobalt and scandium recoveries in
excess of 90% for some extraction methods.
4.2.10 Further work
The Mineral Resources currently have sufficient drilling to define the extent of most of the expected
mineralisation zones. There is further scope to extend the resource estimate at Lucknow and Greenvale.
However the SCONI project is currently at a stage of project evaluation where extensive exploration is not
anticipated until the project commences development.
4.3 Estimation and Reporting of Mineral Resources
4.3.1 Database integrity
Golder audited the assay database for each deposit during the initial Mineral Resource estimate and
resolved all issues prior to proceeding. This included both manual verification of selected drilling holes
against hard copy assay certificates and full 100% comparison of digital data (i.e. original laboratory assay
files). For subsequent resource updates only the additional drilling were added to the audited database.
4.3.2 Site visits
John Horton of Golder visited all the sites during the main stages of exploration at the various deposits. This
allowed exploration processes to be reviewed and evidence of site work inspected. These independent site
visits included:
July 2007 for Bell Creek and Minnamoolka
August 2008 for Kokomo
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March 2010 for Lucknow and Greenvale
4.3.3 Geological interpretation
Nickel laterite geology is well understood and the data at each deposit for SCONI conforms to the expected
laterite sequence. The laterite profile is developed from weathering processes with significant lateral
continuity in the profile. This can have local variation in thickness and grade as a result of weathering
processes. This is expected for laterite deposits where mining is expected to adapt to the local changes. The
Mineral Resource classification is based on drill spacing that will reduce volume uncertainty when drilling is
closer spaced.
4.3.4 Dimensions
Nickel laterite deposits are relatively thin and laterally extensive. Thicknesses can vary from 2 to 30 m with
example sections in Figure 12 to Figure 17. Extents of mineralisation are indicated in Figure 8 to Figure 11.
The classified resource areas estimated include:
Greenvale 1.6 km2
Lucknow 0.6 km2
Kokomo 2.7 km2
Minnamoolka 1.0 km2
Bell Creek 1.5 km2
4.3.5 Estimation and modelling techniques
All significant elements assayed were incorporated into the resource estimate that included the potentially
economically significant elements nickel, cobalt and scandium, as well as other elements significant for
processing or whole rock chemistry including magnesium, iron, manganese, aluminium, calcium, chrome
and copper.
All elements were estimated using ordinary kriging with variogram model parameters derived from the drill
hole samples by laterite domain.
All estimations were undertaken separately for the principal laterite geology types that include laterite,
saprolite and weathered rock. Other domains varied by deposit but generally included:
Nickel and cobalt were estimated within a mineralisation domain interpreted using a nominal 0.3% Ni
cut-off, varied to account for continuity and laterite profile. Nickel and cobalt are correlated and this
relationship is maintained by using the same estimation processes and parameters.
Higher grade scandium was estimated within a 70 g/t Sc interpretation. Scandium displays a separate
control to that for nickel and cobalt and can cross-cut the geology at times.
Some iron boundaries were applied within the laterite to subdivide material for processing option
analysis.
All estimates used unfolding methods to ensure variations in the laterite surface are reflected in the
estimates and sample selection.
Geology and grade domains were interpreted as polygons or surface lines on drill sections and wireframed
for block modelling.
High grade cuts were applied to nickel, cobalt and scandium to reduce the influence of extreme grades or
outliers. The top-cuts applied varied by deposit but do not significantly affect the global metal content
estimated.
4.3.6 Moisture
All resource tonnages were calculated on a dry basis and are consistent with the assays that are prepared
on a dry basis.
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Moisture content (MC) was calculated for a range of samples at all deposits during bulk density
determinations. Values are relatively low and are generally from 0.5% to 17% MC with an average of ~10%.
4.3.7 Cut-off parameters
The SCONI Resources are multi-element and combine nickel, cobalt and scandium grades using a nickel
equivalent cut-off grade where:
NiEq = Ni +1.5 * Co + 0.01 * Sc
This formula has been derived using the following commodity prices and recoveries:
Nickel – US$10/lb and 90% recovery
Cobalt – US$15/lb and 90% recovery
Scandium – US$1500/kg scandium oxide and 90% recovery (scandium oxide is the product
typically traded and contains 65.2% scandium metal)
Note scandium units are in g/t which is equivalent to ppm. Nickel and cobalt units are in %.
The marginal cost of operating an acid leach process is understood to be around 0.7% NiEq for a large scale
facility. This understanding is the basis for the current resource statement at a 0.7% NiEq cut-off for reporting
the Mineral Resource base case that could form part of the combined SCONI project development. To
provide a return on capital investment a higher grade target would be required initially (a higher cut-off is also
provided).
4.3.8 Mining factors or assumptions
No mining factors are applied to the Mineral Resource estimate which is estimated for 10 m by 10 m by 1 m
size blocks. Some aggregation of the resource blocks is required for any mining selectivity scenario in
addition to the application of mining losses and dilution factors.
4.3.9 Metallurgical factors or assumptions
Metallica have completed test work that indicates metallurgical recovery is in the order of 90% for each of
nickel, cobalt and scandium.
4.3.10 Environmental factors or assumptions
Processing options and analysis are currently underway by Metallica. In general:
Mining of the laterite is in shallow pits that will not expose significant fresh rock.
Mine waste materials are highly oxidised and are relatively easy to landform and rehabilitation, as
demonstrated by the successful rehabilitation of the Greenvale mine site which won some
environmental awards.
Disposal of mine tailings can either be in external residue facilities or into in-pit voids.
4.3.11 Bulk density
Dry bulk density (DBD) was measured for each deposit using a range of methods and samples to provide a
basis for deriving the resource estimate assumptions. Determination methods for in-situ material include:
Caliper – Direct measurement of volume of whole PQ drill core from the metallurgical drill holes
Sand Core – Indirect measurement of volume by measuring displaced sand in a bucket
Surface Pits – Pit volume measured measuring sand filling a small 30 by 30 b y 30 cm pit.
Average DBD for the major geological material types were applied to the resource model after small
downward adjustment to correct for expected small selection bias, Table 11.
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Table 11: Dry bulk density summary
Project & Method
Geological Material Type Samples
Lfe
Iron
Laterite
Lhm
Red
Laterite
Lsap
Saprolite
Lsi
Silica
Boxwork
Wum
Weathered
Ultramafic
Lmot
Mottled
Ser
Serpentine
Greenvale - Caliper 1.44 1.90 1.46 - 1.63 2.09 1.79 137
Lucknow - Caliper 1.52 1.96 1.45 2.03 1.93 - - 70
Kokomo – Surface Pits 1.64 - - - - - - 36
Kokomo - Caliper 1.72 - 1.62 2.14 1.92 - - 43
Kokomo - Sand Core (filt) 1.73 2.13 1.83 1.98 2.00 - - 192
Minnamoolka – Caliper 1.32 - - 1.79 2.11 - - 54
Minnamoolka - Sand Core 1.24 - - 1.74 2.05 - - 45
Bell Creek(all)- Surface pits 1.85 - - - - - - 42
Bell Creek NW - Sand Core 1.49 - 1.46 - - - - 86
Bell Creek Sth - Sand Core 1.38 - 1.51 1.48 1.55 - - 174
Bell Creek Nth - Sand Core - - - 1.74 - - - 33
Oversize stockpile material density was averaged from ten test pits.
4.3.12 Classification
Generally classification has been applied on a drill density spacing as follows:
Measured Mineral Resource for a reasonably regular pattern of 20 m (SCONI South) or 30 m (SCONI
North) m.
Indicated Mineral Resource for a reasonably regular pattern of 40 m (SCONI South) or 60 m (SCONI
North).
Inferred Mineral Resource for a reasonably regular pattern of >60 m (SCONI North) or 80 m (SCONI
south except 40 m by 100 m for Kokomo) or 100 m for Greenvale dumps.
4.3.13 Audits or reviews
Golder audited the databases used for Mineral Resource estimation of each deposit.
Bell Creek was previously reviewed and estimated by independent consultants, Computer Aided Geoscience
(2006).
Greenvale and Lucknow were previously explored, drilled and resources estimated by Straits (2007).
Lucknow data was reviewed by Phil Jones and Partners (2009).
4.3.14 Discussion of relative accuracy and confidence
No detailed studies have been completed using simulation or probabilistic methods that could quantify
relative accuracy of the resource estimates.
Laterites can have significant short range variation in material types and grade due to local variations in
weathering process. However on a broader scale they demonstrate consistency in lateral extent. As a result
drilling demonstrates a regional grade and volume rather than local certainty. Hence drill spacing, as used
for the resource classification, is the prime indicator of estimation risk.
4.4 Estimation and Reporting of Ore Reserves
No Ore Reserves are reported or have been reported previously by Metallica for any of the SCONI deposits.