SIGNIFCANT INCREASE IN VOLUME AND CATEGORY TO MINERAL RESOURCE FOR URQUHART BAUXITE PROJECT

Transcription

1 ASX RELEASE 14 NOVEMBER 2016 SIGNIFCANT INCREASE IN VOLUME AND CATEGORY TO MINERAL RESOURCE FOR URQUHART BAUXITE PROJECT HIGHLIGHTS Total Mineral Resource now comprises 9.5 Mt of in-demand Direct Shipping Bauxite 6.9 Mt JORC (2012) compliant Measured and Indicated Mineral Resource for Urquhart Bauxite project New 2016 Mineral Resource estimate 26% higher than the May 2015 maiden Inferred Mineral Resource An additional 8.5 Mt of lower grade material, over and above the 9.5 Mt has also been identified for potential beneficiation Area A slated for first mining in Q Pre-Feasibility Study nearing completion Mining and haulage contract tender process well advanced Bauxite developer, Metallica Minerals Limited (Metallica) (ASX:MLM), is pleased to announce a maiden JORC (2012) compliant Measured and Indicated mineral resource for its Urquhart Bauxite project (UBx), five kilometres southwest of Weipa on Queensland s Cape York and slated for first mining next year. The milestone includes an inventory increase in both volume and category despite the application of a higher cut-off grade in preparing the new estimate. The project now comprises a total JORC (2012) Measured, Indicated and Inferred resource estimate of 9.5 million tonnes, a significant 26% increase on the May 2015 maiden resource estimate. The upgrade, which followed the completion of a close spaced 198-hole drilling program in August 2016, was independently prepared by IMC Mining Pty Ltd (IMC) and is summarised in the table below:

2 Classification Tonnes Total Al 2O 3 Total SiO 2 AAl* RSi** Measured 3.0 Mt 54.4% 11.8% 43.2% 5.0% Indicated 3.9 Mt 53.3% 13.1% 40.8% 5.2% Inferred 2.6 Mt 50.3% 16.8% 37.6% 5.9% Total 9.5 Mt 52.8% 13.7% 40.7% 5.3% * AAl Available 150 C ** RSi Reactive 150 C Table 1 Summary of Urquhart Bauxite low temperature JORC (2012) Resource Metallica CEO, Mr Simon Slesarewich: We were confident that the overall tonnage at Urquhart Bauxite would increase from the 2015 JORC Mineral Resource. However, we are extremely encouraged by the grade of the deposit and in particular, the delineation of a new large low grade area which has the potential to be upgraded via conventional screening to deliver additional tonnages and extend the mine life of the project. Work is significantly progressed on the Pre-Feasibility Study and is nearing completion. The project remains on schedule to commence production in Q2 of 2017." URQUHART BAUXITE PROJECT SUMMARY The Urquhart Bauxite project is situated approximately 5 km southwest of Weipa on Queensland s Western Cape York Peninsula (See Figure 1). Western Cape York is world-renowned for its extensive deposits of high-quality, export grade pisolitic bauxite. The maiden Inferred Mineral Resource was announced on 11 May 2015 and was subsequently followed by a favourable mine planning internal assessment. Infill drilling of the main resource at Area A with 80m and 160m grid drilling in August 2016 (See Figure 2), has upgraded the Mineral Resource classification for the first time to Measured and Indicated, respectively. The drilling has also extended the Mineral Resource limits. Sonic drilling completed for density measurements has indicated a higher in-situ density than previously assumed for the maiden statement. The new results and geological modelling confirm that the UBx resource is suitable for Direct Shipping Bauxite (DSB). A pre-feasibility study (PFS) to assess mining of DSB and shipping via nearby Hey Point is now well advanced and is expected to be completed and released within a month. 2

3 The project s Weipa-type pisolitic bauxite is of high quality export grade with high alumina content (>50% Al 2 O 3 ) that is well known and accepted by Chinese and other alumina refineries. UBx consists of two (2) bauxite plateaus, known as Area A and Area B; both of which are wholly contained within EPM15268, held 50% by Oresome Australia Pty Ltd (a wholly-owned subsidiary of MLM) and 50% by Ozore Resources Pty Ltd. The relevant Mineral Resource areas are now also included in a Mining Lease Application (MLA ). In 2016, infill drilling on 80m and 160m grid spacing has concentrated on the planned initial mining development at Area A. The 2016 Mineral Resource estimate for UBx (for both Areas A and B) for a contiguous geological horizon interpreted at a 48% Al 2 O 3 cut-off for DSB is contained in Table 2. This is higher than the 45% Al 2 O 3 cut-off grade used to prepare the maiden May 2015 resource statement. Additional details by area and a visual summary of the resource model, are provided in Figure 3 to Figure 7. Classification Area Mt Al 2O 3 % SiO 2 % AAl%* RSi %** Measured A Indicated A Inferred A B Subtotal Total * AAl Available C ** RSi Reactive 150 C Table 2 - Urquhart bauxite project DSB Mineral Resource at an effective cut-off of 48% Al 2O 3 3

4 LOCATION Urquhart Point (EPM15268) is located some 5 km southwest of the township of Weipa on the western side of Cape York (See Figure 1). Figure 1 Urquhart bauxite project location looking north-east TENURE EPM15268 forms part of the Cape York HMS and Bauxite Joint Venture (JV) currently held 50% by Oresome Australia Pty Ltd (a 100%-owned subsidiary of Metallica Minerals Limited), and 50% by Ozore Resources Pty Ltd. The JV has lodged a Mining Lease Application (MLA ) an area of 1379Ha (Figure 1), covering the UBx Mineral Resource (Areas A and B). 4

5 GEOLOGY The deposit type is a bauxite laterite derived from the tropical to sub-tropical weathering of aluminous sediments. The deposit appears typical of the pisolitic bauxite style that occurs in the Weipa area on Cape York. The deposit is near the coast and is covered by unconformable sands. DRILLING Resource definition drilling (Figure 2) was completed by Wallis Drilling using a reverse circulation aircore drill rig in two programs: 85 NQ (83mm) aircore holes for 472.5m were completed at Area A and Area B late in 2014 largely on a 320m grid spacing, and 175 HQ (103mm) aircore holes for 1,442m were completed at Area A in August 2016 largely on a 80m and 160m grid spacing. Significant aircore resource definition intercepts for the 2016 program are reported in Appendix A. In addition, 23 sonic drill holes for 112.3m were completed at Area A and Area B in September 2016 for the purpose of collecting density samples. Drill collars were initially located during drilling by a hand-held Garmin GPS considered to have an accuracy of ±5 m. A licenced surveyor surveyed all completed drill hole collars in 2016 using the MGA GDA94 Zone 54L grid system. A Light Detection and Ranging (LiDar) topographic survey was flown over the project area in The LiDar topographic data was consistent with the 2016 collar surveys and confirmed bias issues with the 2014 collar survey elevations. The 2014 collars were corrected to the LiDar survey. There are no concerns with the 2014 collar survey easting and northing coordinates as the bias issues were confined to elevation datum. 5

6 Figure 2 Urquhart bauxite project - Plan of drilling and Mineral Resource classification 6

7 SAMPLING Drilling was sampled and logged on 0.25m intervals. Bauxitic material was selected for analysis and collected on 0.25m or 0.5m composited intervals. The entire sample was submitted to ALS Laboratory in Townsville for sample preparation by drying at 105 C and then riffle-split to provide a representative sub-sample which was pulverised to a nominal 85% passing below 75 microns. Free moisture content was derived from the weight difference, pre and post drying. ANALYSIS Sample analyses on the pulps were undertaken by ALS Laboratory in Brisbane. The analytical method included: Total oxide XRF multielement analysis that included Al 2 O 3 and SiO 2 Loss on ignition (LOI) by thermal gravimetric analysis (TGA) furnace Available alumina and reactive silica metallurgical digest by low temperature (150 o C) microwave digestion, chemical separation and ICP-AES analysis to provide: - Available Alumina (AAl) - Reactive Silica (RSi). ESTIMATION A block model was constructed with 40 m x 40 m x 0.25 m dimension blocks. Five domains were interpreted with a waste and transition zone both above and below the main bauxite horizon. The bauxite horizon was interpreted using a 48% Al 2 O 3 cut-off and the interpreted bauxite zone is the basis of the Mineral Resource statement. Occasional subgrade was included in the bauxite zone to maintain geometric continuity and this inter-burden is included in the Mineral Resource statement. The bauxite horizon and the low grade transition zones were estimated using Ordinary Kriging and dynamic anisotropy with 0.25 m composites. Estimation was undertaken in a single wide search range using octants to decluster the drilling and localise the sample selection. Hard boundaries were used during estimation and mine planning will require the addition of some dilution and ore loss. The results are summarised in Figures 3 through Figures 6 as plan composites of the >48% Al 2 O 3 Mineral Resource and main bauxite horizon. An example cross section from Area A is provided in Figure 7 for all bauxitic material. 7

8 Figure 3 Plan of Mineral Resource block model average Al 2O3 Figure 4 Plan of Mineral Resource block model average SiO2 8

9 Figure 5 Plan of Mineral Resource block model thickness Figure 6 Plan of Mineral Resource block model overburden thickness 9

10 Figure 7 Area A cross section with classified bauxite block estimates for Al 2O 3 and SiO 2 (refer to Figure 2 for the cross section location) CLASSIFICATION Blocks for the bauxite horizons classified as Measured, Indicated and Inferred Mineral Resource were drilled at 80, 160 and 320m grid spacing, respectively (See Figure 2). Extrapolation of each category is limited to half the nominal drill spacing i.e. up to 160m extrapolation beyond the drilling for Inferred Mineral Resource. A JORC (2012) Table 1 summary description is provided as Appendix B to this announcement. CUT-OFF GRADE The cut-off grade has been elevated from the 45% Al 2 O 3 used in the maiden resource statement (see ASX release 11 May 2015) to 48% Al 2 O 3 cut-off grade. The cut-off is used indirectly to define and interpret a contiguous bauxite horizon for estimation and reporting. Some sub-grade samples are included where required to maintain spatial continuity. Geological logging and other chemistry for SiO 2, AAl and RSi were also considered as part of the resource domaining and reporting criteria. 10

11 The effective 48% Al 2 O 3 cut-off grade reflects the geology of the deposit and likely mine planning requirements. Upper and lower transition bauxite domains were defined where bauxite was logged and sampled and were also estimated. These define additional low grade bauxite material <48% Al 2 O 3. The summary of the upper and lower bauxite transitional material in Table 3 is additional to the Mineral Resource statement for DSB in Table 2. Classification Tonnes Total Al 20 3 Total SiO 2 Measured 0.8 Mt 44.1% 27.3% Indicated 1.8 Mt 42.0% 30.0% Inferred 5.9 Mt 35.7% 37.9% Total 8.5 Mt 37.8% 35.2% Table 3 Urquhart bauxite project transitional low-grade bauxite material <48% Al 2O 3 cut-off Though not economic as a DSB product without processing, the transition domains include zones of marginal grade material that may be considered for blending during mining, particularly from the thicker upper transition domain which maintains similar RSi grades, even though the total silica (SiO 2 ) is elevated. Wet screen (+1.2 mm) results from the 2014 drilling indicate the yield for the transition domains is in the order of 50% to produce a +50% Al 2 O 3 product. Though wet screening is not being considered in the development plan, these results are encouraging. Drying screening will be investigated to possibly augment the development plan and mine life options by processing all or part of the low grade transitional bauxite material. RESOURCE COMPARISON The maiden Mineral Resource estimate was completed in 2015 based on 320m spaced drilling and classified as Inferred. The 2015 Mineral Resource statement (see ASX release 11 May 2015) was based on domain selection using a 45% Al 2 O 3 cut-off. The 2016 Mineral Resource estimate which includes Measured, Indicated and Inferred classification, revised the cut-off grade higher to 48% Al 2 O 3. The global estimates are compared in Table 4 using the same 45% Al 2 O 3 block grade cut-off and illustrate an increase of 36% on a like for like basis. 11

12 Significant changes include: Mineral Resource classification has been upgraded from only Inferred in 2015 to predominantly Measured and Indicated at Area A. Area A has increased in volume due to drilling that has extended the Mineral Resource limits. Global tonnage has increased 3% due to the change in density from 1.5 t/m 3 used in 2015 to an average of 1.55 t/m 3 as measured in 2016 from sonic drilling samples. Improved collar surveys and LiDar surface surveys have resolved some surveying issues in 2014 improving the confidence and geometry of the bauxite horizon that is now interpreted to be relatively flat. The higher cut-off grade of 48% Al 2 O 3 used for domaining is a more natural geological cut-off defining a consistent grade zone and introduces less dilution to the Mineral Resource. Area 11 May 2015 Estimate 2016 Estimate Mt Al 2O 3 SiO 2 Mt Al 2O 3 SiO 2 A % 15.0% % 13.4% B % 19.0% % 17.6% Total % 16.3% % 14.4% Table 4 Global DSB resource comparison at 45% Al 2O 3 block cut-off MINING The resource model assumes mining of a DSB operation will follow normal shallow open-pit strip mining operations, comprising top soil and overburden removal and stockpiling in advance of progressive panel mining, followed by overburden and top soil replacement and rehabilitation with native vegetation species. This approach has been successfully adopted for other Cape York bauxite deposits. The JV has previously entered into a Heads of Agreement with Green Coast Resources (GCR) for GCR to provide access and transhipping services of DSB from UBx (see ASX release 7 April 2016), through Hey Point, located 15km from UBx. Metallica provided working capital to GCR via a Short Term Loan (Loan) (see ASX release 4 October 2016) to assist that company s successful maiden 12

13 bauxite export from the Hey Point facility (see ASX release 24 October 2016). Under the terms of the Loan, GCR is now bound to provide transhipping services and access to Metallica. The JV is in the process of tendering a mining and haulage contract with appropriately prequalified contractors. The chosen contractor will provide labour, machinery, management and technical support to operate the UBx mine and deliver consistent bauxite product to Hey Point, including; mine planning, clearing and stockpiling of topsoil, removal of overburden, mining and trucking of bauxite and rehabilitation. The Mineral Resource extends to the dune breakaway. Mine planning will include an environmental set-back distance which is still being considered. The set-back is unlikely to be greater than 50 m and would exclude <5% of the Mineral Resource (principally Inferred and some Indicated classification). METALLURGY Low temperature available alumina (AAl) and reactive silica (RSi) analyses have been completed for Area A. For the lower grade transition zones, AAl and RSi are not complete and there are no analyses available for Area B. To allow complete estimation, regression functions were used to assign values based on the whole rock analyses. These assignments only affect the Area B Inferred Mineral Resource area and subgrade estimates. The JV plans to complete the low temperature metallurgical digest analyses for Area B and is currently completing alternative high temperature metallurgical digest analyses for Total Available Alumina (TAA) and RSi for Area A. For more information please contact:- Simon Slesarewich Chief Executive Officer Phone: John Haley CFO/Company Secretary Phone: admin@metallicaminerals.com.au 13

14 Competent Person s Statement The information in this report that relates to Exploration Results and Exploration Targets is based on information compiled by John Cameron (a geologist of over 25 years experience), and a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and is a contract consultant to Metallica Minerals Ltd. Mr Cameron has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Cameron consents to the inclusion of this information in the form and context in which it appears in this release/report. The Mineral Resource estimate was undertaken by Mr John Horton, Principal Geologist, who is a Fellow and Chartered Professional of the Australasian Institute of Mining and Metallurgy and an associate at IMC Mining Pty Ltd. Mr Horton has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Horton consents to the inclusion of this information in the form and context in which it appears in this release/report. Caution regarding Forward Looking Statements Certain statements made in this announcement contain or comprise certain forward-looking statements. Although Metallica believes that the estimates and expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory environment and other government actions, fluctuations in commodity prices and exchange rates and business and operational risk management. Metallica undertakes no obligation to update publically or release any revisions to these forward-looking statements to reflect events or circumstances after today s date or to reflect the occurrence of unanticipated events. 14

15 Appendix A 2016 Aircore drilling significant intercepts Significant Intercepts reported at a 48% Al 2 O 3 cut-off for DSB Drill Hole Easting Northing From (m) To (m) Length (m) Al 2 O 3 % SiO 2 % Fe 2 O 3 % UPB NSR UPB NSR UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB

16 Drill Hole Easting Northing From (m) To (m) Length (m) Al 2 O 3 % SiO 2 % Fe 2 O 3 % UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB NSR UPB NSR 16

17 Drill Hole Easting Northing From (m) To (m) Length (m) Al 2 O 3 % SiO 2 % Fe 2 O 3 % UPB NSR UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB NSR UPB UPB UPB UPB UPB UPB UPB UPB UPB

18 Drill Hole Easting Northing From (m) To (m) Length (m) Al 2 O 3 % SiO 2 % Fe 2 O 3 % UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB NSR UPB NSR UPB NSR UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB

19 Drill Hole Easting Northing From (m) To (m) Length (m) Al 2 O 3 % SiO 2 % Fe 2 O 3 % UPB UPB UPB UPB UPB UPB UPB UPB UPB UPB NSR UPB UPB UPB UPB UPB UPB NSR UPB NSR UPB UPB UPB UPB UPB UPB UPB UPB UPB NSR No Significant Result at the 48% Al 2 O 3 cut-off 19

20 Appendix B - JORC CODE, 2012 EDITION TABLE 1 DESCRIPTIONS Section 1 Sampling Techniques and Data Criteria JORC Code explanation Commentary Sampling techniques Drilling techniques Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. Aspects of the determination of mineralisation that are Material to the Public Report. In cases where industry standard work has been done this would be relatively simple (eg reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay ). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information. Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc). Reverse Circulation aircore drill hole samples representing 0.25 m intervals were collected in plastic bags through a cyclone mounted on the drill rig. The entire sample was collected to ensure full representivity of the drilled material. All samples were geologically logged at the time of drilling to determine 1) the type of bauxite material, 2) which samples to composite over 0.5 m intervals, 3) which samples to retain for analysis and 4). when to stop the hole. Samples were collected as individual 0.25m samples or composited over successive 0.5m intervals where the logged material was geologically similar. Samples that contained pisolites in significant volume were logged as bauxitic and submitted for analysis. These samples were sealed in plastic bags and placed in polywoven sacks for dispatch to the laboratory. A small representative sub-sample (approx. 50 g) was collected for each 0.25 m interval and stored in a plastic sample tray for future reference. Sonic drill hole samples were captured in the core barrel as the hole advanced and then transferred into plastic sleeves on completion of each run. The entire sample was collected and geologically logged. Drilling was carried out by Wallis Drilling Pty Ltd using a Wallis Mantis 80 reverse circulation Aircore drill rig mounted on a 6x6 Toyota. Shallow (up to 10 m) vertical aircore holes were drilled using HQ rods and an HQ aircore drill bit with a hole diameter of 103 mm. A program of Sonic drilling to collect samples for bulk density measurements was carried out in 20

21 Criteria JORC Code explanation Commentary September 2016 by Groundwave Drilling Services Pty Ltd using a using a track mounted Boart Longyear Sonic Delta Base DB320 rig. Shallow (up to 9.0 m) vertical sonic drill holes were drilled using a 123.5mm outside diameter drill bit. Drill sample recovery Logging Subsampling techniques and sample preparation Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the samples. Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. The total length and percentage of the relevant intersections logged. If core, whether cut or sawn and whether quarter, half or all core taken. If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. For all sample types, the nature, quality and appropriateness of the sample preparation technique. Quality control procedures adopted for all sub-sampling stages to maximize representivity of samples. Reverse Circulation aircore drilling was used due to its proven reliability in producing good representative sample recoveries across accurate sample intervals. To ensure representivity of the material being drilled the entire sample was collected for each 0.25 m interval of the drill hole. Sonic drilling was used to collect samples for bulk density measurements as it is a recognised method for full recovery of intact and continuous samples that can be used to determine volumes and densities. All drilled intervals were logged by a competent geologist at 0.25 m intervals. The logging was undertaken in a qualitative manner and focussed on documenting the amount and nature of the overburden, the pisolitic intervals and the floor of mineralisation. The bauxitic horizons were defined by the presence of pisolites and the absence of ironstone and/or clays. Logging included visual estimates of pisolitic bauxite concentration and pisolite size and nature. No sub-sampling of material was undertaken at the time of collection. The entire sample was collected over each 0.25 m interval directly from the cyclone on the drill rig. Sample weights were on average between 2 and 3 kg for each 0.25 m sample and 4 to 6 kg for the composited 0.5 m samples. The 2014 samples were dispatched to the sample preparation facility at the ALS laboratory located in Virginia, Brisbane and the 2016 samples were 21

22 Criteria JORC Code explanation Commentary Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. Whether sample sizes are appropriate to the grain size of the material being sampled. processed at the ALS laboratory in Townsville. In 2014 washed screened samples were undertaken initially followed by whole rock analyses. This was discontinued in 2016 with all sampling focused on whole rock analyses for Direct Shipping Bauxite (DSB). Selective sampling of the contiguous bauxite intervals was undertaken based on geological logging. Samples were prepared by : weighing before and after drying to obtain moisture loss the sample was dried at 105 o C and then rifflesplit to provide a representative sub-sample which was pulverised to a nominal 85% passing below 75 microns; Quality of assay data and laboratory tests The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established. 50g fractions were split off for total oxide analysis and the residue retained. This preparation is regarded as being appropriate for bauxite analyses. The sonic samples were weighed, dried at 105 o C and weighed again at ALS Townsville to calculate the insitu moisture content in order to calculate an in-situ density for the bauxite. Sample analyses were undertaken by ALS laboratory at its Stafford facility in Brisbane. The analytical methods applied to the pulverised sample were as follows: Total oxides by XRF (ALS code ME-XRF13n) for Al 2 O 3, BaO, CaO, Cr 2 O 3, Fe 2 O 3, K 2 O, MgO, MnO, Na 2 O, P 2 O 5, SO 3, SiO 2, SrO, TiO 2, V 2 O 5, Zn, ZrO 2 ; and H 2 O/LOI by TGA furnace (ALS code ME-GRA05) Available Alumina (ALS code Al-LICP01) Reactive Silica (ALS code Si-LICP01) No field duplicate samples were collected because 22

23 Criteria JORC Code explanation Commentary the total sample was collected for analysis. In 2016, 1 in 50 samples had coarse split duplicates taken at the laboratory which were subsequently assayed to provide duplicate information. Two standard bauxite reference samples were sourced from Geostats Pty Ltd in Perth. The bauxite reference samples were relabelled and renumbered prior to being provided to ALS to insert in each batch at a ratio of 1 standard in every 30 samples in 2014 and 1 of each standard included per assay batch in Results of the analysis of the standards were all within one standard deviation of the certified values. In addition the laboratory undertook Quality Control measures with one in every 12 samples analysed in duplicate. Several laboratory standards and one blank were run with each sample batch and the results reported. Verification of sampling and assaying The verification of significant intersections by either independent or alternative company personnel. The use of twinned holes. Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. Discuss any adjustment to assay data. There are no public domain reports describing drilling for bauxite on the property. All drilling was completed in one phase in November 2014 with follow-up drilling in August 2016 which resulted in a similar tenor of mineralisation. Four twin aircore drill holes were completed in 2014, though only one has paired assays. Two additional twin holes were completed at Area A in 2016 along with two short close spaced 20 m sections lines. All sonic holes twinned 2014 aircore resource drilling, 8 of these have assays results providing additional twin hole comparisons. ALS provided the analytical data in csv and pdf format. Field geology logs were manually merged with assay result in Excel for initial geological review. For the resource estimate the assay, geology and survey data were all imported into an Access database, merged and cross checked. The data has not been adjusted other than the 23

24 Criteria JORC Code explanation Commentary management of below detection limit assay values. Location of data points Data spacing and distribution Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. Specification of the grid system used. Quality and adequacy of topographic control. Data spacing for reporting of Exploration Results. Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. Whether sample compositing has been applied. Drill collars were initially located during drilling by a hand held Garmin GPS considered to have an accuracy of ±5 m. A licenced surveyor surveyed 75 of the 81 drill holes in 2014 and all holes in The grid system used was MGA GDA94 Zone 54L. Accurate LiDar topography was flown over the project area in This was consistent with the 2016 collar surveys and confirmed bias issues with the 2014 collar survey elevations. The 2014 collars were corrected to the LiDar survey. There are no concerns with the 2014 survey easting and northing coordinates as the bias issues were confined to elevation datum. Topography used available collar surveys and beyond that the LiDar data recalibrated to local controls. In 2014 initial drilling at Areas A and B included 85 holes drilled on a nominal 320 m regular grid. In 2016 infill drilling at Area A has been on 80 m and 160 regular grid patterns (Refer to Figure 2). There is some additional twin and 20 m spaced drilling to help demonstrate short range continuity. Infill drilling has confirmed the original results at Area A and extended the mineralization in places. The Mineral Resource Classification reflects the improvement in confidence in the continuity of the mineralisation. Continuity of the bauxite horizon is confirmed with the infill drilling and the addition of more accurate LiDar topographic control has indicated greater consistency in the horizontal elevation of the bauxite profile. Samples were collected as individual 0.25 m samples or composited into 0.5 m intervals where the geology was similar. No additional compositing of samples was undertaken. 24

25 Criteria JORC Code explanation Commentary Orientation of data in relation to geological structure Sample security Audits or reviews Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. If the relationship between the drilling orientation and the orientation of key mineralized structures is considered to have introduced a sampling bias, this should be assessed and reported if material. The measures taken to ensure sample security. The results of any audits or reviews of sampling techniques and data. The mineralisation is regarded as horizontal due to the tabular nature of the style of deposit as demonstrated elsewhere on the Weipa Plateau. All drill holes were less than or equal to 15 m in length, vertical and intersected the mineralisation at an approximate 90 0 angle with all intercepts regarded as having True Width. Considering the deposit type the sampling has shown the presence of broad zones of continuity of mineralisation in an unbiased manner. The samples were collected in large plastic sample bags on site which were secured using cable ties and bagged into white polywoven sacks and stored on shrink-wrapped pallets (2014) or bulka-bags (2016) for shipment. It is considered that due to the nature and the value of the bauxite mineralisation potential, security interference was extremely remote. No independent audits of the drilling and sampling have been undertaken other than the desktop review of the sonic drilling and density measurement procedure by Xstract Mining Consultants Pty Ltd. Section 2 Reporting of Exploration Results Criteria JORC Code explanation Commentary Mineral tenement and land tenure status Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area. 25 Urquhart Point EPM15268 is located some 5 km southwest of the township of Weipa on the western side of Cape York. EPM is currently held 50% by Oresome Australia Pty Ltd (a 100% owned subsidiary of Metallica Minerals Limited), and 50% by its Joint Venture Partner Ozore Resources Pty Ltd. A mining lease application (MLA ) is in progress. There is an exploration access agreement with the local Indigenous Groups represented by the Wik and Wik Way. The area is covered by the Cape York Regional Plan (CYRP). EPM15268 is unaffected by the current CYRP and the

26 Criteria JORC Code explanation Commentary tenement is in good standing. Exploration done by other parties Geology Drill hole Information Data aggregation Acknowledgment and appraisal of exploration by other parties. Deposit type, geological setting and style of mineralization. A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: easting and northing of the drill hole collar elevation or RL (Reduced Level elevation above sea level in metres) of the drill hole collar dip and azimuth of the hole down hole length and interception depth hole length. If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case. In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of 26 An appraisal has been undertaken on previous exploration for bauxite. Although some widespread sampling had taken place, there was no evidence of previous systematic, grid-based drilling. Oresome undertook a maiden auger drilling and sampling program within the tenement in 2014 (Refer ASX Release dated 11 July 2014) and announced a Maiden Mineral Resource following the initial drilling program (Refer ASX Release dated 11 May 2015) The deposit type is bauxite laterite derived from the tropical to sub-tropical weathering of aluminous sediments. A total of 85 vertical air-core drill holes were completed in November 2014 in two areas at roughly 320 m spacing. Follow-up drilling at only Area A in 2016 included 175 infill and extension drill holes at 80 and 160 m spacing, see Figure 2. Area A contains 198 drill holes for m, with a 8.1 m average depth Area B contains 63 drill holes for m, with a 4.9 m average depth Both areas are relatively flat and low lying with collars between 2.5 and 13 m RL and the drill holes between 3 and 15 m in total depth. A limited number of sonic drill holes (~15% of all samples) had DSB total oxide analyses available for the bulk density assessment. These assays were not available at the time of the Mineral Resource estimate. The sonic drilling twins existing resource drill holes. The twin hole assays were assessed and raised no concerns. Exclusion of the sonic holes should not be material to the Mineral Resource estimate. Samples that were composited to 0.5 for assaying were split to 0.25 m to ensure 0.25 m sample

27 Criteria JORC Code explanation Commentary methods Relationship between mineralizati on widths and intercept lengths Diagrams Balanced reporting Other substantive exploration data high grades) and cut-off grades are usually Material and should be stated. Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. The assumptions used for any reporting of metal equivalent values should be clearly stated. These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralization with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg down hole length, true width not known ). Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views. Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results. Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; resolution at the domain boundaries was not lost prior to estimation. For each drill hole, bauxite intervals were selected for DSB analysis using a threshold of 48% total Al 2 O 3 and 20% total SiO 2 and considering AAl and logging. Other bauxite samples were constrained in upper and lower transition zones. All samples had an equal length weight basis of 0.25 m. No upper cut-off grades were applied. The mineralisation is regarded as horizontal due to the tabular nature of the style of deposit and because the holes are shallow (up to 10 m in length), drill hole deviation would be minimal and therefore the holes are considered vertical with all intercepts representing True Width. Down hole depths are considered as True Widths. Refer to Figures 2 through 7 Exploration results were previously released in Metallica ASX announcements dated 21 Jan 2015 and 3 Feb 2015 for initial drilling results. Appendix A includes a summary of the drilling and principal bauxite domain DSB intervals completed by Aircore in The drilled area was identified due to its recognised proximity to known bauxite deposits within the adjoining Rio Tinto ML, desk-top mapping of potential bauxite plateau features in satellite image studies and encouraging results from limited hand auger drilling completed in Refer ASX Release dated 11 July

28 Criteria JORC Code explanation Commentary Further work potential deleterious or contaminating substances. The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling). Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive. Oresome have completed 13 water bores for the purpose of water monitoring. These have no assays and do not contribute directly to the Mineral Resource estimate. Further work will include mining and environmental assessments. In due course the less well defined mineralisation at Area B will require further definition and the development potential between Areas A and B will be investigated. Section 3 Estimation and Reporting of Mineral Resources Criteria JORC Code explanation Commentary Database integrity Site visits Geological interpretati on Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes. Data validation procedures used. Comment on any site visits undertaken by the Competent Person and the outcome of those visits. If no site visits have been undertaken indicate why this is the case. Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit. Nature of the data used and of any assumptions made. The effect, if any, of alternative interpretations on Mineral Resource estimation. The use of geology in guiding and controlling Mineral Resource estimation. The factors affecting continuity both of grade and geology. The assay data were compiled directly from original survey and laboratory assay data files. Assays were matched to the logging data using the sample number. Cross checking all samples were matched allowed correction of some minor typographic errors. John Cameron an independent geologist supervised all drilling during November 2014 and August - September The pisolitic bauxite horizon is easily identified in aircore drilling and can be used to identify all intervals requiring sampling. Assaying has confirmed the logging. The bauxite horizon shows evidence of being cut by an unconformity in places with the occurrence of sands and in some places transported bauxite. Nonetheless the bauxite horizon is relatively consistent and shows some evidence of following the small topography variations. The drilling has indicated a continuous bauxite horizon with thinner or low grade zones attributed to regional variations and possible erosion zones. 28