First Look

Bauxite developer, Metallica, listed on the ASX in 2004 with 61.9m shares on issue and retains a tight share register of <230m shares. 2017 is a watershed year for Metallica as it will commission its planned 1.5mtpa Urquhart Bauxite project (50%) in Queensland, delivering enviable shareholder value through first bauxite production, revenue and cash flow. The Company has a stated goal of achieving 5-7mtpa of sales over the next 3-5 years. Delivering on this goal will mean other growth opportunities can be assessed and converted into producing projects.

A late in 2016 independent Pre-Feasibility Study (PFS) by IMC Mining supported immediate development of Urquhart Bauxite, which is hosted in two shallow bauxite plateaus 5kms south of Weipa, and offers low capital and operating costs for a pre-tax NPV of A$78.4m on sales of 6.5Mt of Proved and Probable Reserves.

Reserves Classification Area Direct Shipping Bauxite (Low Temp) Total Al2O3 Total

SiO2

AAl* RSi**
    Dry kt % % % %
Proved A 2,964 53.7 12.3 42.3 5.4
Probable A 3,568 51.9 14.2 39.1 5.9
Ore Reserve A 6,532 52.7 13.3 40.6 5.7

* AAl – Available Alumina @ 150◦C
** RSi – Reactive Silica @ 150◦C

The JV can choose from three mining scenarios – prioritising the highest grade Reserves first (base case) and 2 further scenarios – mining Inferred Resources (adding 1.5 years mine life) and finally at the end of mine life, screening stockpiled transitional material. The PFS estimated start-up capital of ~$1.1m with that funding now being sourced. The mine will generate highly profitable margins of ~A$12/t, has a potential revenue stream ~A$300 million across 5.5 years, with payback in just five months. Customer product verification and off-take partner negotiations are underway.

Resource Classification Tonnes Total Al2O3 Total SiO2 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%

Urquhart Bauxite’s high market appeal direct ship bauxite does not require processing or treatment prior to export, and has direct established sea route access to bauxite markets in China and the greater Asia Pacific Basin. A contractor will undertake all strip mining obligations and site rehabilitation, trucking the ore just 15kms to Metallica’s 3rd party bulk export facilities at Hey Point for trans-shipping by barge to ore carriers in nearby deep waters. The JV also has numerous bauxite and heavy mineral sands prospective tenements covering 300km of sandy coastal belt directly north of Weipa.

While bauxite is Metallica’s priority, other Queensland assets include the Esmeralda hydrothermal graphite, SCONI (Scandium, Nickel and Cobalt) and early stage Cape Flattery silica sands projects.

We invite you to our website for more detailed information.