Quarterly Report to 30 Sept 2015

ASX Release

30 October 2015

Metallica Minerals Limited is an Australian bauxite, zircon-rutile, nickel-cobalt-scandium and graphite resource development and exploration company

ASX:MLM

ISSUED CAPITAL (30/09/15)

166,891,830 Ordinary Shares

6,000,000 Options

See latest Appendix 5B Lodged 12/10/15 for more detail

SHAREHOLDERS (30/09/15)

2,009 shareholders

Top 20 shareholders hold 59.01%

LARGEST SHAREHOLDERS

Jien Mining Pty Ltd - 24.0% Victorian Ferries Pty Ltd - 9.8% Golden Breed Pty Ltd - 5.3% Bondline Ltd - 2.9%

DIRECTORS

Barry Casson

Non Executive Chairman

Andrew Gillies

Non Executive Director

Shu Wu

Non Executive Director

Shu Zhang

Alternate Director to Dr Wu

SENIOR MANAGEMENT

Simon Slesarewich

Chief Executive Officer

John Haley

CFO & Company Secretary

CASH BALANCE

As at 30/09/15, MLM's cash balance was approximately $1.4 million. No debt.

PROJECT HIGHLIGHTS

CAPE YORK HMS & BAUXITE JOINT VENTURE

» On 6 October 2015, the final A$650,000 was received under the Joint Venture Agreement between Oresome Australia Pty Ltd and Ozore Resources Pty Ltd. Ozore Resources has now earned a 50% interest in the Cape York HMS and Bauxite JV.

URQUHART POINT HMS PROJECT

» The project is fully permitted.

» The HMS plant is expected to be shipped from South Africa to Australia in early November.

» Cost reductions were successfully implemented.

» The JV will assess all options to ensure that the project is robust before proceeding to production.

URQUHART BAUXITE PROJECT

» Environmental studies and permitting are ongoing.

» Adjacent Mining Lease Applications 100044 and 100049, with a combined area of 1,379 Ha, have been lodged covering the Urquhart Bauxite Project area and the potential standalone load-out facility at North Point Jetty.

» Inferred Mineral Resource of 7.5 million tonnes (Mt) averaging 51% total aluminium oxide (Al O ) and 16.3% total silicon oxide (SiO ) of Direct Shipping Bauxite (DSB).1

2 3 2

» Low temperature, Direct Shipping Bauxite (DSB) confirmed for Area A with high available alumina and moderate reactive silica.2,3

» Area B drilling confirmed additional bauxite in 40 of 62 holes.

» Current demand and growth forecast for bauxite remains strong.

ESMERALDA GRAPHITE PROJECT

» Drilling has commenced on the granite-hosted, hydrothermal-style Esmeralda graphite deposit.

» Initial assay results are expected in November 2015.

1 ASX Release 11 May 2015 'Maiden Bauxite Resource', available www.asx.com.au.

2 ASX Release 17 April 2015 'Direct Shipping Bauxite confirmed at Urquhart Point', available www.asx.com.au.

3 ASX Release 26 February 2015 'Direct Shipping Bauxite results', available www.asx.com.au.

ABN: 45 076 696 092 |  +61 7 3249 3000 | 7 +61 7 3249 3001 |  [email protected] | ASX:MLM www.metallicaminerals.com.au | 71 Lytton Road, East Brisbane QLD 4169 |  GPO Box 122, Brisbane QLD 4001

COMPANY HIGHLIGHTS

CORPORATE

» The sale of the Ootann and Star River limestone projects was completed on 15 September 2015. A further $845,000 was received from the Sale Agreements.4,5

» The company is in discussions on the potential sale of other non-core limestone assets near Gladstone.

» A private company has completed nickel ore mining operations at the Lucky Break Project. Payment of $200,000 in royalties was received on 21 September. The final royalty payment is expected to be received in early November. The private company is now undertaking mine site remediation and rehabilitation work.

SAFETY

» There were no lost-time injuries recorded during the September quarter.

FINANCIAL AND INVESTMENT POSITION

» Metallica had approximately $1.4 million in cash as at 30 September 2015 and no debts other than trade creditors.

NOTICES

COMPETENT PERSON'S STATEMENT

The technical information contained in this report was compiled or supervised by Mr Andrew Gillies, BSc(Geol), a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM) and Director of Metallica Minerals Ltd. Mr Gillies has relevant experience in the mineralisation, exploration results and resources being reported to qualify as a Competent Person as defined in the 2012 Edition of the

Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012). Mr Gillies consents to the inclusion of this information in the form and context in which it appears in this release.

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 publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today's date or to reflect the occurrence of unanticipated events.

4 ASX Release 9 July 2015 '$500k sale of Ootann Limestone Project', available www.asx.com.au.

5 ASX Release 28 July 2015 '$370,000 sale of Star Limestone Project', available www.asx.com.au.

OUTLOOK

FOR THE DECEMBER QUARTER

Drilling and assays from two diamond drill core holes will be completed at the company's wholly owned Esmeralda Graphite Project. Initial assay results

are expected in late November 2015. Depending on the results, the company may undertake further metallurgical analysis to determine the quality and purity of the Esmeralda graphite.

The Urquhart HMS plant is expected to be in transit from South Africa to Australia in November. On-site construction may commence after the next wet season. The company continues to monitor the mineral sands market and potential impacts on the Urquhart Point HMS Project. Given the continuing decline in zircon-rutile prices, the Cape York HMS and Bauxite Joint Venture will assess all options to ensure that the project is robust before proceeding to production. The current focus is on completing the work required to enable granting of mining leases for the adjoining bauxite deposits (Areas A and B),

which includes environmental base line and hydrology studies that are currently underway.

The attractiveness of Metallica's considerable bauxite assets was boosted by the Indonesian Government's export ban on bauxite. If the ban is not reversed, a major shortfall in seaborne bauxite supply is forecast.

Metallica remains in discussion with an established nickel company for a possible joint venture partnership on the SCONI (Ni-Co-Sc) Project. The company is also in an early stage of negotiation with another party on a potential joint venture partnership on the Cape Flattery Silica Sands Project.

Following the sale of its Ootann and Star River limestone projects, the company is evaluating further opportunities to realise the value of its remaining Queensland limestone assets. The company also continues to assess potential acquisitions that will add value to shareholders.

METALLICA MINERALS

SEPTEMBER 2015 QUARTERLY REPORTT

CAPE YORK

HMS AND BAUXITE JOINT VENTURE

Pursuant to the joint venture agreement, the Cape York HMS and Bauxite Project Joint Venture is now held 50% by Oresome Australia Pty Ltd, a wholly owned subsidiary of Metallica Minerals, and 50% by a private Chinese investor, Ozore Resources Pty Ltd (Ozore). In accordance with the JV agreement, Ozore has provided A$7.5 million to the JV to fund the development of the Urquhart HMS Project. The final $650,000 payment of which was received on 6 October 2015.

Since the formation of the JV on 8 September 2014, the JV has expended in excess of $7.5 million on progressing the Urquhart HMS Project and regional exploration programs within the vast JV tenements on western Cape York. The majority of funds were applied to the fabrication of the Urquhart HMS processing plant in South Africa, which was recently completed and is expected to be shipped in early November. Metallica has a free-carry interest in the project until Ozore's total funding commitment is satisfied.

The Cape York HMS and Bauxite Project Joint Venture comprises three separate projects: Urquhart Bauxite Project, Urquhart Point HMS Project, and Cape York Regional HMS and Bauxite Exploration Project.

PRIORITIES FOR THE DECEMBER QUARTER

» Undertake dry season environmental survey and monitoring at Urquhart Bauxite Project.

» Continue bauxite project evaluation and initial market studies.

» Complete shipping of the HMS plant from South Africa.

» Continue to monitor the mineral sands market and assess all options to ensure that the Urquhart Point HMS Project is robust before proceeding to production.

FIGURE 1: Civil works completed in preparation for the HMS processing plant with haul road from the initial mining area