Scandium

Metallica and its joint venture partner Straits Resources Ltd have a high grade scandium, which is located within the Kokomo EPM - 40km north of Greenvale in North Queensland deposit. Straits Resources Ltd can earn a 70% interest in the project by expending $1.4 million. To date, Straits has earned a 20% interest in the project, with Metallica still owning 80% of the project, Straits Resources manages the project.

Scandium is a valuable rare earth metal and has always demanded premium prices due to its superior alloying abilities, especially with aluminium and magnesium, enhancing lightness, strength, durability and increasing the melting point.It is used to enhance Aluminium Alloys and in fuel cell research.

Any significant use of scandium will require a long-term reliable supply at a substantially lower price before a major manufacturing commitment is likely to be made by possible end-users.

Metallica's high-grade scandium zone is located adjacent to the Kokomo nickel-cobalt mineralisation. Approximately 12 drillholes have defined a very high-grade zone which averages close to 170 g/t Sc and is estimated to contain in excess of 50t of scandium metal, with drill intercepts of 48m at 202 g/t (kk-36) from surface being encountered. Geological projections indicate that further drilling should increase this figure substantially as the deposit is open along strike and at depth. Mineralisation commences at the surface and is mineable by shallow open cut methods. These advantages of wide, shallow intercepts and high grades should result in low production and operating costs.

Metallica's initial goal is to investigate the potential for developing a long-term reliable supply of scandium for the market. Straits Resources completed a Scoping Study on the potential development of this resource. Further studies are required on the potential marketing of Scandium and the processing of the Scandium Ore prior to future resource drilling and Feasibility Studies.

Metallica's high-grade deposit presents a major opportunity for the project to become a long-term cornerstone supplier of competitively priced scandium to light metal alloy producers and other end-users.

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