Metallica Minerals- Resources & Energy Symposium 2012
Queensland Explorer of the Year - 2011 An Australian Nickel-Cobalt & Scandium Zircon & Rutile HMSResource Development Company Symposium, Broken Hill Stewart Hagan 22nd May 2012
DisclaimerStatements & material contained in this presentation, particularly those regarding possible or assumed future performance, production levels or rates, metal prices, metalmarkets, resources or potential growth of Metallica Minerals Ltd, industry growth or other trend projections are, or may be, Forward Looking Statements. Suchstatements relate to future events & expectations &, as such, involve known & unknown risks & uncertainties.The NORNICO Nickel-Cobalt & Scandium Project, Lucky Break Nickel Projects, the Weipa & Gippsland Heavy Mineral Sands projects are at the evaluation & feasibility stage& although reasonable care has been taken to ensure that the facts stated in this presentation are accurate & or that the opinions expressed are fair & reasonable, no reliancecan be placed for any purpose whatsoever on the information contained in this document or on its completeness.Actual results & developments may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors.At the date of this presentation Metallica Minerals holds approximately 30.8% of MetroCoal Limited which listed on the ASX on 4 December 2009, further information can besourced from metrocoal.com.auAt the date of this presentation Metallica Minerals holds approximately 19.1% of Cape Alumina Ltd which listed on the ASX on 29 January 2009 & latest & more detailedinformation can be sourced from Cape Alumina & capealumina.com.auAt the date of this presentation Metallica Minerals holds approximately 15.7% of Orion Metals Limited, further information can be sourced from orionmetals.com.auAt the date of this presentation Metallica Minerals holds approximately 37% of Planet Metals Limited, further information can be sourced from planetmetals.com.auNothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction.This material is used for a company summary presentation only, for more detailed information the reviewer should seek company information as provided in Metallica’s ASXreleases, Annual & Quarterly Reports. Technical information contained in this report has been compiled by Metallica Minerals Managing Director Mr Andrew Gillies B.Sc. M. AUSIMM & Metallica Minerals Ltd, who is a competent person & a member of the Australasian Institute of Mining & Metallurgy & have relevant experience to the mineralisation being reported on to qualify as Competent Persons as defined by the Australasian Code for Reporting of Minerals Resources & Reserves. Mr Gillies consents to the inclusion in this presentation of the matters based on the information in the form & context in which it appears.
MLM Financial Overview Financial Information (27 April 2012) Major ShareholdersShare price 0.25c Jien Mining Pty Ltd** 19.0%Shares on Issue 132.4M Golden Breed Pty Ltd 7.3%Market Cap $33.7M Victorian Ferries Pty Ltd 4.5%Cash Position $10.5M RCF (Funds III LI & IV LP) 3.9%ASX Investments* ~$32.2M Bondline Ltd 3.8%Cash & Listed Inv. per share 0.32c Top 20 shareholders 55.4%*see investment slide at the back of this presentation ** Subsidiary of Jilin Nickel Co. Limited MLM: 12 Month Trading History 0.60 6.0 0.50 5.0 0.40 4.0 Volume (M) Price (A$) 0.30 3.0 0.20 2.0 0.10 1.0 0.00 0.0 May-11 Jul-11 Oct-11 Jan-12 Apr-12Cash & listed ASX investments provide financial confidence to advance core projects 3
Board of Directors (5) & CEOName Position Background ExperienceDavid Barwick Non-Executive Chairman Financial / Corporate 40+ yearsAndrew Gillies Managing Director Geology / Mining 25+ yearsJohn Haley CFO / Director / Company Secretary Financial 25+ yearsBarry Casson Non-Executive Director Financial / Corporate 40+ yearsWu Shu (Tao Li Non-Executive Director Engineering 30+ years– Alternate)Gavin Becker CEO Metallurgy / Engineering 30+ years (L-R): Gavin Becker, Barry Casson, John Haley, David Barwick, Andrew Gillies, Tao Li Experienced, talented & dedicated Board & Management team Focussed on delivering value to shareholders 4
Metallica Minerals 3 Asset Groups1. NORNICO “Tri Metal” Nickel–Cobalt & Scandium Project2. Zircon Rutile Heavy Mineral Sands Projects Weipa HMS – 100% owned Gippsland Zircon Ti Minerals HMS – Option to Acquire 100% from Rio Tinto3. Cash & Listed Investments ~$42M (27 April 2012) 5
Core Project Assets: Nickel-Cobalt-Scandium & Zircon-RutileVisionBecome a highlysuccessful Australianmineral resourcedeveloper, a profitableproducer of Nickel -Cobalt - Scandium &Zircon - Rutile anddeliver high returns forshareholders 6
NORNICO: Project Overview 100% owned Tri-metal project – nickel, cobalt & scandium Excellent location, infrastructure & processing site Ni-Co + Sc oretypes are highly amenable to HPAL extraction Completed extensive exploration & resource definition program based on >4,000 drill holes Ni-Co resource 50.3Mt @ 0.81%Ni, 0.09% Co (406,000t Ni & 44,000t Co) (~90% in Indicated & Measured category) PLUS Scandium resource 16.8Mt @ 130g/t Sc (3,250t Sc2O3) Scoping Study (+35%) advanced – Completion June 12(see page 24 and Appendix 1 for detailed resource tables) The discovery of scandium within Ni-Co deposits provides Metallica with an exciting opportunity to become the world’s pre-eminent supplier of scandium oxide 7
NORNICO: Delivering Scandium - Element 21 “The Enhancer” Scandium is one of the 17 Rare Earth Elements and priced over $1,500/kg Sc oxide Fuel Cells (up to 85% energy efficiency) Aluminium-Scandium Alloys Aerospace (light, high strength alloy frames)Scandia Stabilised Zirconia Lighting Scandium has unique properties that will enhance our future – A major & reliable supply could underpin a significant increase in scandium’s usage & application 8
NORNICO: Scandium UsesProduct Application of scandiumScandium – Aluminium Small quantity of scandium (0.2-0.5%) significantly increases the strength of aluminiumAlloys alloys – important for transport (lightness) & structural (strength) applications Scandium significantly improves weldability, corrosion resistance & reduces heat cracking Stronger & lighter frames can deliver significant benefits to industry (aerospace, marine craft, cars, sporting goods, bicycles, construction, etc) Scandium super alloys provide the highest strength-to-weight ratio of any ally commonly used todaySolid Oxide Fuel Cells SOFCs allow natural gas (or other fuel source) chemically converted to electricity, heat,(SOFC) water & CO2 with up to 85% efficiency Scandium Stabilized Zirconia (SSZ) most efficient SOFC & at lower temperature (performance gains) & extended life for SOFC’s SOFC on-site electricity generators sized for home, business or town (gas connected) & selling excess electricity to grid SOFC using SSZ technology coinciding with increasing gas availability networkLighting Scandium in metal halide vapour lamps contributes a large number of spectral emission lines to the light, giving it a natural white light or sunlight appearance The light is brighter (more lumens per watt) & is a more efficient form of lighting Commonly used on movie sets & sport stadiums to create artificial sunlight appearance 9
NORNICO: Planning The Way Forward 2012 2013 2014 2015Milestones 2010 2011 Mar Q Jun Q Sep Q Dec QMar Q Jun Q Sep Q Dec QMar Q Jun Q Sep Q Dec QMar Q Jun Q Sep Q Dec QExploration Program / Resource Delineation Concept Study HPAL pilot testwork / SX extraction (Sc focus)Metallurgical Testing (ongoing)Scoping Study (750ktpa)Environmental StudiesPrefeasibility StudyScandium Marketing & Offtake ArrangementBankable Feasibility StudyFunding / Financial CloseDesign PhaseDevelopment / ConstructionCommissioning / Operation 1H 2012 – Key Activities Planned / WIP HPAL continuous piloting – provide Sc2O3 product for marketing + patent process commenced Completed Scoping Study commenced Commenced Greenvale stockpile sampling & beneficiation studies Environmental Impact Statement (EIS) – commenced Greenvale MLA & progress permitting 10
Zircon-Ti Minerals: Gippsland HMS Project Overview A Major New Zr-Ti Minerals HMS Resource In August 2011, Metallica acquired an option to purchase the Gippsland Heavy Mineral Sands (HMS) project from Rio Tinto 12 month option to acquire 100% for $8M Advanced exploration project Nine tenements covering over 620km2 of Pliocene fossil HMS strandlines 12,700m of RC drilling (232 holes) completed to date by Rio Tinto Exploration & 43 Aircore holes completed by MLM Jan 2012 Maiden JORC Inferred Mineral Resource announced April 2012 1.7Bt @ 2.2%THM* for 38Mt contained HM Inc: Higher grade zone 360Mt @ 2.7% THM for 9.7Mt contained HM** (see page 13)*THM – Total Heavy Mineral**HM – Heavy Mineral Medium grade, large tonnage resource with significant zircon in mineral assemblage 11
Zircon-Ti Minerals: Gippsland HMS Project Mineral Resource Total JORC Inferred Mineral Resource (cut-off grade of 1% THM)Resource Category Tonnes THM Slimes <38 μm Contained HM (Mt) (%) (%) (Mt)Inferred 1,700 2.2% 24.4% 38 Including high grade zone with closer spaced drilling (cut-off grade of 1% THM) Tonnes Contained HMS Mineral Assemblage (Inferred) (Mt) (HM) Zircon (%) Rutile (%) Combined Titanium Monazite (%) Materials (%) 360 2.7% 15% 4% 50% 0.6% Tonnes Contained Contained HMS Mineral Assemblage (Inferred) (Mt) (HM) Zircon (kt) Rutile (kt) Combined Titanium Monazite (kt) Materials (kt) 360 2.7% 1,420 400 4,760 60Notes:1. The Mineral Resource was estimated by AMC Consultants and reported according to the JORC Code and guidelines (JORC,2004)2. Tables may contain arithmetic errors due to rounding.3. The Mineral Assemblage data is reported as the percentage of the Total Heavy Mineral (THM) component and is classified as4. Inferred due to limited data available5. Combined Titanium Materials consists of leucoxene, altered ilmenite and ilmenite.6. THM and Contained HM also include other non-valuable minerals. As such, the Contained Mineral Assemblage does not sum tothe Contained HM.For further information see ASX release dated 26 April 2012. 13
Zircon-Ti Minerals: Gippsland HMS Project Resource Outline Total Inferred Resource 1.7 Billion tonnes @ 2.2% THM (see page 13) Orange Zone Inferred Resource: 360Mt @ 2.7% THM inc 15% zircon, 4% rutile and 50% combined titanium minerals (see page 13)Inferred Mineral Resource: without an HMS assemblage estimateInferred HMS assemblage Mineral Resource 50km2 Area – HMS Resource 14
Zircon-Ti Minerals: Gippsland HMS Project Block Model Resource Cross Section Extensive thick zones of >1% THM 15
Zircon-Ti Minerals: Gippsland HMS Project Next StepsApril 2012 Maiden JORC Resource (AMC) Commissioned & commenced Scoping Study (R.J. Robbins) May 2012 Metallurgical testwork including slimes (R.J. Robbins) Marketing report – Zircon & Ti Mineral product specifications (TZMI) Initial mineable resource & mining studies (AMC)June 2012 Complete Scoping Study (R.J. Robbins)July 2012 Finalise due diligence (Acquisition of Gippsland project)August 2012 Board approval decision (on exercising option to purchase the Gippsland project) 16
Zircon: Supply / Demand Forecast 20% shortfall by 2020 Source: TZMI Robust fundamentals for the zircon sector Outlook for zircon appears excellent 17
Zircon-Rutile: Weipa HMS Project Overview Weipa Heavy Mineral Sands (HMS) – Zircon & Rutile Project (100% owned) in Cape York, Queensland Urquhart Point Mining Lease applied for over shallow (<3m) high grade (~7% THM) Zircon-Rutile deposit Zircon + Rutile >40% HMS Over 2,000sq km of EPM’s/EPMA’s Feasibility & EIS process advanced Zircon-Rutile production targeted late 2013 subject to feasibility, permitting and financing Opportunity for cashflow generation late 2013 18
Zircon-Rutile: Weipa HMS Project – Next StepsWEIPA HMS Mining Lease application submitted, permitting - ongoing TLO Compensation negotiations & EIS submitted - ongoing Feasibility Study – completion expected mid 2012 Subject to feasibility, permitting and financing – potential Zircon-Rutile production start - late 2013 (Capitalise on high forecast zircon-rutile demand & prices) 19
Strong Financial Position Platform to Deliver Value to Shareholders ASX Commodity Company MLM No. Shares Share Market Value ($) Code % MLM hold Price MTE Coal MetroCoal 30.8% 64,300,000 39.5c $25.3M 176,683,663 CBX Bauxite Cape Alumina 19.1% 26,867,621 16.0c $4.3M 140,800,900 PMQ Copper Gold Planet Metals 37.0% 22,069,619 6.8c $1.5M 59,717,114 ORM Gold & Orion Metals 15.7% 12,552,658 9.2c $1.1M REE’s 79,597,443 Total Listed Investments $32.2M Approximate Cash at Bank (27/04/2012)* $10.5M Cash & Total Listed Investments $42.7M Shares on Issue 132.4M MLM Cash & Listed Investments/share $0.32 MLM share price (27/04/2012) $0.25 MLM Market Cap $33.7M Cash + Listed assets alone ($43M) > Market cap ($34M) *Includes $1M loan drawdown, with $4M remaining on facility Strong financial position Future value drivers & growth: NORNICO + Zircon-Rutile HMS projects Metallica is dedicated to realising the underlying value of its mineral resources to generate significant returns for shareholders 20
Summary Metallica Minerals 3 Asset Groups1. NORNICO “Tri Metal” Nickel–Cobalt & Scandium Project2. Zircon Rutile Heavy Mineral Sands Projects Weipa HMS – 100% owned Gippsland Zircon Ti Minerals HMS – Option to Acquire 100% from Rio Tinto3. Cash & Listed Investments ~$42M (27 April 2012) 21
Metallica has a clear strategy for major growth “Discover the hidden value in MLM”
Competent Persons StatementTechnical information & exploration results contained in this report has been compiled by MetallicaMinerals Ltd full time employee Andrew Gillies (B.Sc Geology) in the position of Managing Director. MrGillies is a member of the Australasian Institute of Mining & Metallurgy & has relevant experience to themineralisation being reported on to qualify as Competent Persons as defined by the Australasian Code forReporting of Minerals Resources & Reserves. Mr Gillies consents to the inclusion in this report of thematters based on the information in the form & context in which it appearsThe NORNICO Nickel-Cobalt & scandium project Mineral Resource estimate(s) is based upon &accurately reflects data compiled, validated or supervised by Mr John Horton, Principal Geologist, who is aFellow of the Australasian Institute of Mining & Metallurgy & a full time employee of Golder Associates PtyLtd. Mr Horton has sufficient experience that is relevant to the style of mineralisation & the type of depositunder consideration & to the activity which he has undertaken to qualify as a Competent Person asdefined in the 2004 edition of the ‘Australasian Code for the Reporting of Exploration Results, MineralResources & Ore Reserves’. Mr. Horton consents to the inclusion of this information in the form & contextin which it appears in this document.The Gippsland Zircon-Rutile HMS Project Mineral Resource estimates have been prepared by MrRodney Webster of AMC Consultants. Mr Webster BappSc, who is a competent person and a member ofthe Australasian Institute of Mining and Metallurgy and has relevant experience in the style ofmineralisation being reported on to qualify as Competent Person as defined by the Australasian Code forReporting of Minerals Resources and Reserves. Mr Webster consents to the inclusion in this presentationof the matters based on the information in the form and context in which it appears.
NORNICO: Scandium & Ni-Co Resource Statement (Updated 21st February 2012) Scandium Resource Statement Nickel-Cobalt Resource Statement (see Appendix I)Description Tonnes Sc Sc Metal Description Tonnes Ni Co Ni Metal Co Metal (Mt) (g/t) (t) (Mt) (%) (%) (kt) (kt)Kokomo Greenvale 8.0 1.04 0.08 83 6.6Measured 0.7 154 108 Lucknow 3.6 0.57 0.19 21 6.8Indicated 3.8 121 460 Kokomo 16.3 0.67 0.12 108 19.4Sub-total M&I 4.5 126 568 Bell Creek S 9.1 0.97 0.07 88 6.3Inferred 4.4 91 400 Bell Creek N 2.3 0.83 0.03 19 0.7Total 9.0 109 968 Bell Creek NW 3.1 0.77 0.05 24 1.5Lucknow The Neck 0.8 0.84 0.03 7 0.3Measured 0.6 190 116 Minnamoolka 7.1 0.80 0.04 56 2.6 TOTAL 50.3 0.81 0.09 406 44.2Indicated 6.9 153 1,065 Notes:Sub-total M&I 7.5 156 1,181 1. Scandium resource & nickel-cobalt resource are considered separately (no double counting) 2. Scandium resource reported at a cut-off grade of 70g/t ScInferred 0.3 99 26 3. The resources for Greenvale and Lucknow are reported at a cut-off grade (COG) of NiEq 0.7% (NiTotal 7.8 154 1,207 + 2Co). This NiEq COG formula has been calculated using commodity prices of US$10/lb nickel and US$20/lb cobalt, and recoveries of 90% for both nickel and cobalt.Combined Total The resources for Kokomo, Bell Creek South, Bell Creek North, Bell Creek Northwest, Minnamoolka and The Neck are reported at a COG of NiEq 0.7% (Ni + 3Co). This NiEq COGMeasured 1.3 171 223 formula has been calculated using commodity prices of US$10/lb nickel and US$30/lb cobalt, andIndicated 10.7 142 1,525 recoveries of 90% for both nickel and cobalt. The rationale for using different formulas is because these resource estimates were calculated atSub-total M&I 12.0 145 1,748 different points in time. The commodity prices adopted in each instance were considered reasonable at the time of calculation. It should be noted that the spot price for nickel and cobaltInferred 4.7 91 427 varies constantly. The rationale in using a NiEq COG is to ensure that both significant nickel andTOTAL 16.8 130 2,175 cobalt mineralisation are encapsulated in the resource estimate. From Metallicas metallurgical testwork to date, there is reasonable expectation for the nickel and cobalt to be recovered at similar recoveries to those achieved in testwork. Table contains minor rounding errors. 4. For more detailed information on the Lucknow resource, please see MLM ASX release dated 21 Feb 2012 5. For more detailed information on the NORNICO Ni-Co resource, please see appendix 1 at the end of this presentation Nickel-cobalt material can be supported by high grade scandium material feed (and vice-versa) 24
NORNICO Ni-Co Resource Base – Appendix I (cont’d) (updated 21 Feb 2012 with new Lucknow Ni-Co Resource) Million Tonnes Ni Co Fe Mg In situ contained In situ containedNickel Deposit (Mt) (%) (%) (%) (%) Ni (t) Co (t)MinnamoolkaMeasured - -Indicated 5.9 0.80 0.04 11.3 10.6 47.4 2.4Inferred 1.2 0.78 0.02 8.9 10.2 9.0 0.2Totals 7.1 0.80 0.04 10.9 10.5 56.4 2.6The NeckMeasured - -Indicated 0.8 0.84 0.03 8.8 6.5 7.1 0.3Inferred - -Totals 0.8 0.84 0.03 8.8 6.5 7.1 0.3COMBINED NORNICO RESOURCEMeasured 13.6 0.96 0.09 15.3 6.2 130.3 12.3Indicated 30.9 0.76 0.09 17.8 5.4 235.1 27.3Inferred 5.7 0.72 0.08 17.7 4.8 40.6 4.6TOTAL 50.3 0.81 0.09 17.1 5.5 406.0 44.2Notes: Competent Persons Statement located at the end of this presentation1.The resources for Greenvale and Lucknow are reported at a cut-off grade (COG) of NiEq 0.7% (Ni + 2Co). This NiEq COG formula has been calculated using commodity prices of US$10/lb nickel and US$20/lb cobalt, and recoveries of 90% for both nickel and cobalt. The resources for Kokomo, Bell Creek South, Bell Creek North, Bell Creek Northwest, Minnamoolka and The Neck are reported at a COG of NiEq 0.7% (Ni + 3Co). This NiEq COG formula has been calculated using commodity prices of US$10/lb nickel and US$30/lb cobalt, and recoveries of 90% for both nickel and cobalt. The rationale for using different formulas is because these resource estimates were calculated at different points in time. The commodity prices adopted in each instance were considered reasonable at the time of calculation. It should be noted that the spot price for nickel and cobalt varies constantly. The rationale in using a NiEq COG is to ensure that both significant nickel and cobalt mineralisation are encapsulated in the resource estimate. From Metallicas metallurgical testwork to date, it is of the opinion that there is reasonable potential for the nickel and cobalt to be recovered and similar recoveries to those assumed have been achieved in testwork. Block models for the above resources estimates were constructed by filling wire frame surfaces representing nickel laterite mineralisation boundary with 10m by 10m by 1m blocks. Nickel (Ni) grades were estimated by ordinary riging using various search radius, depending on the drill spacing of the deposit. A minimum of 4 and a maximum of 15 composites were used to estimate each block, with a maximum of 3 composites from any 1 drill hole. Therefore, at least 3 drill holes were used to estimate block grade values. At Bell Creek South, Minnamoolka and Kokomo a nominal 0.3% Ni mineralised envelope was used as a hard boundary for Ni and Co block grade estimation. Hard boundaries were also used between the laterite and basement zones.3. Variations due to rounding factors.4. Iron (Fe) and magnesium (Mg) are included to indicate the overall ore quality, as both metals influence acid consumption as well as dissolved Fe, Mg and other metals, which are contaminants to nickel loaded pregnant solution which is treated to produce a marketable nickel and cobalt intermediate product. As a rule, the lower the Fe and Mg in the laterite ore the better metallurgy and the ore is more suited to heap leach processing.
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