QUARTERLY REPORT
– TO 31 MARCH 2008
HIGHLIGHTS
Ø The combined
NORNICO Resource (Bell Creek and Minnamoolka deposits) now stands at 35.5
million tonnes (Mt) at 0.73% nickel (Ni) containing approximately 259,000
tonnes of nickel.
Ø Over
85% of the NORNICO Resource is in the Measured and Indicated category, which
includes a Measured Resource component of 7.5 Mt at 0.94% Ni at the key Bell
Creek South deposit.
Ø New
Minnamoolka Inferred and Indicated Resource is 14.7 Mt at 0.66% Ni comprising
an 11.8 Mt at 0.67% Ni Indicated and a 2.9 Mt at 0.64% Ni Inferred Resource.
Ø NORNICO
Feasibility Study progressing with study manager Lycopodium Engineering.
Revised mining studies commenced for a 1 Mt per annum heap leach nickel operation
to produce an average of approximately 7,500 tonnes of Ni per annum for the
first 10 years.
Ø Process
design change to improve efficiencies – now includes an Ion Exchange (IX)
Resin section for clean, selective and more efficient nickel and cobalt
recovery.
Ø During
the March Quarter, 335 drill holes were completed predominantly outside the
current resource boundary of the Bell Creek South deposit with significant
nickel mineralisation recorded.
Ø Pilot
testing plant established at Bell Creek for further large column acid leaching
tests. Three columns now loaded with representative blended Bell Creek ores.
Ø Nickel
Supply Agreement for the Lucky Break nickel project was signed between
Metallica, joint venture partner Metals Finance Corp. (ASX:MFC)
and the BHP Billiton Yabulu Nickel Refinery.
Ø Cape Alumina Pty
Ltd (MLM 40%) progressing with planned IPO, targeting third Quarter 2008.
Appointment of two highly experienced
professionals Mr George Lloyd and Mr Rennie Fritschy as consultants who will
become Non-executive Independent Chairman and Non-executive Independent
Director respectively, from the ASX listing date. Mr Mark Annandale also joined
the management team as Community Relations and Environment Manager.
Ø MetroCoal’s
Surat Coal Basin
project further progressed with coal exploration targets generated with a
strategy for exploration and evaluation for Underground Coal Gasification (UCG)
with Coal to Liquids (CTL) and conventional coal mining targets.
CORPORATE HIGHLIGHTS
- MLM has a strategic 40% interest in Cape Alumina, which holds 100%
of the Weipa bauxite project located on Queensland’s
western Cape York Peninsula. Preparation for
listing Cape
Alumina on the ASX
through an Initial Public Offering (IPO) is progressing. The targeted
completion is in the third Quarter 2008.
- Maintaining strong funding
position of approximately $5.87 million cash plus 25 million Cockatoo Coal
Ltd (ASX:COK) shares (value approximately $23
million as at date this release).
SUBSEQUENT
EVENTS – Lucky Break Acid Supply
On the 24th April, Metallica was advised by its joint venture
partner and manager of the Lucky Break nickel project, Metals Finance Corp
(ASX: Code MFC) that MFC is in dispute with Sun Metals Corporation (the
operator of an acid plant and zinc refinery in Townsville) in relation to the
supply of sulphuric acid to the Lucky Break nickel project. The
development of the project will likely be delayed pending the outcome of the
dispute with Sun Metals. For further information see MFC ASX release dated
24 April 2008.
FINANCIAL
(to be read in conjunction with the Appendix 5B
attached)
As of 31 March 2008, Metallica has 108.4 million shares on issue and
cash of $5.87 million. Metallica also holds 25 million Cockatoo Coal Ltd
(ASX: COK) shares (escrowed until July 2008) currently valued around $23
million (based on a share price of 92 cents).
Exploration and evaluation expenditure totalled $1,190,000 and
administration expenditure was $435,000 for the Quarter to 31 March 2008. The
total combined March Quarterly expenditure was approximately $1.625 million.
The estimated expenditure by Metallica for the June Quarter is $2.95
million. Significant additional expenditure is expected by joint venture
parties, MFC (Lucky Break Nickel project) and Matilda Minerals (Urquhart Point
- Weipa heavy mineral sands project) as well as through its shareholding in Cape Alumina
(Weipa bauxite project).
Metallica provided $400,000 in equity funds to Cape Alumina
during the March Quarter to maintain its 40% shareholding. Metallica has loaned
a cumulative total $1.5 million to Cape
Alumina, which is
repayable to Metallica in May 2008.
No Directors or Management Unlisted Performance Options were issued
during the quarter.
Metallica continues to look at opportunities to enhance its core nickel
projects and to divest or joint venture its non-core mineral properties, such
as its Metrocoal coal assets to enable it to maintain focus on and fund its key
NORNICO nickel projects.
For further
information or to view the full report please refer to our website, www.metallicaminerals.com.au