First Look

2017 has been a watershed year for Metallica as it moved ever closer to commissioning its planned 1.5Mtpa Urquhart Bauxite Project (Project) (MLM 50% and Operator) in Queensland, with the aim of delivering 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 and delivering on this goal will mean other growth opportunities can be assessed and converted into producing projects.

Late in 2016 an independent Pre-Feasibility Study (PFS) by IMC Mining supported the immediate development of the Project, which is hosted in two shallow bauxite plateaus 5km 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.


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

The PFS estimated start-up capital of under $2m with Metallica is now fully funded through to the start of production. The mine will generate margins of ~A$12/t, has a potential revenue stream ~A$300m across 5.5 years, with payback in just five months. With first production nearing offtake negotiations and sales contracts are of the highest priority so as to underpin the development on the Project, as such Metallica recently announced it had appointed Bigbites Ltd, a specialist bauxite marketing company based in Hong Kong, as its Marketing Agent for sales of bauxite from the Project.

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 has high market appeal due to the direct shipping bauxite not requiring processing or treatment prior to export and its direct, established sea route access to bauxite markets in China and the greater Asia Pacific Basin. LCR Group has been appointed as the the contractor to undertake all mining operations, site rehabilitation and trucking of the ore to Metallica’s third party bulk export facilities 15km away 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 held by the Company include the Esmeralda Hydrothermal Graphite Project and early stage Cape Flattery Silica Sands Projects. As a result of the Company transitioning to a bauxite developer it is consolidated its portfolio and has recently executed a Sale and Purchase Agreement with Australian Mines Limited in relation to the SCONI (Scandium, Nickel and Cobalt) Project agreeing to the sale of 100% of the asset for $11 million.