NORNICO

NORNICO Nickel-Cobalt and Scandium “Tri-Metal” Project

This is Metallica Minerals flagship project located in North Queensland.
 
NORNICO is located between the townships of Mt Garnet and Greenvale in North Queensland. Metallica’s development focus is in NORNICO’s southern area comprising the remaining Ni-Co resources at the Greenvale nickel mine site and the scandium-cobalt rich nickel resources at the Lucknow deposit near Greenvale.
 
The project also comprises the Bell Creek nickel-cobalt resource located 32km south of Mt Garnet, the Minnamoolka nickel resources located 30km south of Bell Creek and the cobalt-scandium-rich Kokomo nickel resource located 55km north of Greenvale.
 
NORNICO is in an excellent geographic location, near the Greenvale township, less than 3 hours from the Port of Townsville, and with adjacent fresh water and infrastructure. It has an ideal climate and environment.
 
The NORNICO deposits generally have broad laterite/oxide mineralisation close to surface (<50m). NORNICO’s combined JORC nickel-cobalt (Ni-Co) Resource is 50.3Mt @ 0.81% Ni and 0.09% Co (0.99% Ni Eq) comprising approximately 406kt contained Ni and 44kt contained Co. Metallica’s combined scandium (Sc) resource is 16.8Mt @ 130g/t Sc using a 130g/t Sc COG containing approximately 3 million kilograms of scandium oxide (see tables below).
 
The NORNICO project has progressed significantly in 2011 and is now entering a period of

• more detailed feasibility and environmental studies
• permitting
• mineable resource studies
• ongoing detailed metallurgical testwork; and
• scandium market development.

 
The project is focused on a High Pressure Acid Leaching (HPAL) operation which will treat 750,000tpa. HPAL allows all iron rich laterite ores to be co-treated, particularly the high scandium, high iron Lucknow and Kokomo ores, ensuring that scandium production (in addition to cobalt) becomes a major competitive advantage for the NORNICO project.
 
There is considerable benefit in having three metals (Ni-Co & Sc) in various plant feed ores available to blend, so that when there are higher prices for any one or more metals, the processing options of Ni, Ni-Co, Ni-Co-Sc, Sc-Co and Sc ore blends, can be relatively easily scheduled to maximise revenues.
 
It is envisaged that once a long term reliable supply of significant quantities of scandium becomes available for the first time (say >40,000kg pa Sc2O3), the market for scandium will grow substantially. As the demand for scandium increases, a higher percentage of NORNICO scandium ore would then be incorporated in to NORNICO’s plant feed to increase NORNICO’s scandium oxide production in later years.

The NORNICO Ni-Co resource base currently stands at

 The Scandium resource base currently stands at