for personal use only - asx.com.au · greenvale nickel long section - 7900550n looking north ......

Quarterly Report to 30 June 2012

`

ASX Release31 July 2012

Metallica Minerals Ltd

An Australian scandium-cobalt-nickel and zircon-titanium minerals resource development company

ASX:MLM

ISSUED CAPITAL (30/06/2012) 132,357,710 Ordinary Share 11,900,000 Options* *See Appendix 5B for more detail

SHAREHOLDERS 2,056 shareholders

LARGEST SHAREHOLDERS Jien Mining Pty Ltd 19.0% Victorian Ferries Pty Ltd 9.5% Golden Breed Pty Ltd 7.5% Bondline Limited 3.8%

Top 20 shareholders hold 56.53%

DIRECTORS David K. Barwick - Non Exec Chairman Andrew Gillies - Managing Director John Haley - Exec Director, CFO & Company Secretary Barry Casson - Non Exec Director Shu Wu - Non Exec Director Tao Li - Alternate Non Exec Director

SENIOR MANAGEMENT Gavin Becker - CEO Stewart Hagan - GM Industrial Minerals John Khoo - Corp Development Manager

CASH BALANCE As at 30 June 2012, MLM’s cash balance was approximately $7.2M.

SCONI ` Scoping Study completed – highlights

` Confirmed the technical and financial viability for the proposed development of the SCONI project (formerly NORNICO) and its associated Greenvale, Lucknow and Kokomo deposits

` Demonstrates that existing scandium and nickel-cobalt resources (refer to Table 4) can support a 750,000 tonnes per annum operation over a 20 year life

` Estimates annual average EBITDA of A$179M

` Metallurgical testwork completed – highlights

` Produced in excess of 1kg of scandium oxide at purity levels of ~99.99%

` Overall scandium recoveries of 85% achieved

` Confirmed Metallica’s proprietary scandium extraction and refining technology

` Indigenous Land Use Agreement (ILUA) signed with Gugu Badhun People

` Provides clear native title and cultural heritage processes for the grant of all mining tenure and provision of infrastructure

` Re-tabulation of Mineral Resources for SCONI

` 76% increase in contained scandium and 15% increase in contained nickel (see Table 4)

` Project name changed to SCONI to highlight the scandium focus

ORESOME AUSTRALIA ` Maiden JORC resource for Gippsland announced – 1.7Bt @ 2.2%THM (see Table 7)

` Due diligence progressing well, including Scoping Study

CORPORATE ` Accepted takeover offer for interest in Orion Metals (ASX:ORM) which will yield Metallica

$2.3M

` Capital return for interest in Planet Metals (ASX:PMQ), approved by PMQ shareholders, which will yield Metallica $1.4M

Highlights

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

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2 Metallica Minerals Limited June Quarterly Report 2012

SCONI Project - 100% Owned

OVERVIEW

Significant progress was made during the quarter with a number of key milestones being accomplished:

` Completion of Scoping Study which yielded positive results

` Completion of Metallurgical Testwork and first production of high purity scandium oxide

` Signing of ILUA with Gugu Badhun People

` Re-tabulation of Mineral Resource Statement

` Project name change to SCONI to reflect focus on scandium

The completion of these milestones is a positive step forward for Metallica in reaching its goal of becoming the world’s first major, reliable and long-term supplier of scandium.

SCOPING STUDY

Metallica completed a Scoping Study based on a 750,000tpa operation, mining and processing Measured, Indicated and Inferred resources (refer to Table 4) from the Greenvale, Lucknow and Kokomo deposits over a 20 year mine life.

MINING

IMC Mining Group (IMC) was commissioned to conduct a mining evaluation of the scandium and nickel-cobalt resources and to develop an optimised mine and stockpiling plan that would support a 20 year plant operational life. IMC’s mining study concluded that mining could be undertaken using a truck and shovel approach with a relatively small mining fleet. The mining study also demonstrated that resources from Greenvale, Lucknow and Kokomo could be mined by open pit methods, with the resultant pits being very shallow as shown in the cross sections below in Figure 1.

PROCESSING

Jacobs was commissioned to conduct an evaluation of processing mined resources and was supported by relevant experts on different parts of the SCONI processing flow sheet.

The SCONI process plant has been designed to process scandium, nickel and cobalt bearing laterite oretypes to produce saleable scandium, nickel and cobalt products. Following crushing and grinding, the contained Sc-Co-Ni bearing laterite will be subject to high pressure acid leach (HPAL) processing using sulphuric acid, leaching the metals to produce a scandium, nickel and cobalt rich solution.

Note to Figure 1:

Greenvale & Lucknow shown at a vertical exaggeration of ratio 2:1Figure 1: Greenvale, Lucknow and Kokomo cross sections

Pit Floor

Topography

GREENVALE NICKEL LONG SECTION - 7900550N Looking North

Nickel only

LUCKNOW LONG SECTION - 284800E Looking East

Topography

Scandium only

KOKOMO CROSS SECTION - 78948200N Looking North Topography

Scandium onlyMedium Grade Nickel Pits

High Grade Scandium Pit

Pit Floor

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Metallica Minerals Limited June Quarterly Report 2012 3


From this solution, scandium will first be extracted and refined into scandium oxide using Metallica’s proprietory technology. For more information on this metallurgical process, please refer to the Metallurgical Testwork section on page 4.

Post scandium extraction, the process plant will further process the solution to produce nickel and cobalt products. The Scoping Study explored three alternative processing routes which would produce different products:

1. Cobalt Manganese Nickel (CMN) Process combined with electrowinning to produce nickel metal and cobalt sulphide (manganese recovery has not been included in the Scoping Study)

2. Mixed hydroxide precipitation to produce a mixed nickel and cobalt hydroxide

3. Mixed sulphide precipitation to produce a mixed nickel and cobalt sulphide

Metallica’s preferred processing path is the CMN process as it would result in physical nickel metal being produced, which is more valuable than a mixed hydroxide or mixed sulphide product.

CAPITAL AND OPERATING COSTS

The Scoping Study estimated the following capital and operating costs as detailed below in Tables 1 & 2.

Table 1: Estimated Capital Expenditure

Category A$M

Mining 22

Leach Plant 118

Refinery 97

Major Process Packages 103

Services & Utilities 42

Process Plant Infrastructure 73

General Infrastructure 21

Total Direct Costs 476

Indirect Costs (@20%) 95

Direct + Indirect Costs 571

Owners Costs 26

Total Capex (ex Contingency) 597

Table 2: Estimated Operating Expenditure

CategoryA$M

per annumA$/t feed

processed

Mining & Haulage 12 16

Reagents / Consumables 36 48

Sulphur (delivered) 26 35

Labour 31 41

Maintenance 18 24

General & Administration 15 20

Total 138 184

Notes to Table 1 & 2:

Capital and operating expenditures assume the CMN Process is adopted to produce nickel and cobalt products.

Figure 2: SCONI Project locations

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FINANCIAL ANALYSIS

As part of the Scoping Study, a financial analysis was undertaken to assess the financial viability of the project. The results (see Table 3) of this analysis conclude that when using reasonable forecast commodity price and exchange rate assumptions, SCONI could be a financially robust project with strong annual operating margins.

Table 3: Summary of Financial Analysis

Description Assumption / Output

Processing Plant Throughput

750,000tpa (with a 2 year ramp up period to full capacity)

Average Feed Grade (over 20 years)

0.81% Nickel, 0.11% Cobalt, 73g/t Scandium (109g/t Scandium Oxide)

Average Metal Recoveries

90% Nickel, 90% Cobalt, 85% Scandium

Average Annual Production

5,250t Nickel, 700t Cobalt, 68,000kg Scandium Oxide

Long Term Prices US$10.00/lb Nickel, US$15.00/lb

Cobalt, US$2,000/kg Scandium Oxide

Exchange Rate AUD:USD

0.90

Capital Contingency 20%

Net Present ValueA$402 million (pre-tax, 100% equity, 10% discount rate, real terms, 20%

capital contingency)

Internal Rate of Return16.7% (pre-tax, real terms,

100% equity)

Average Annual Operating Margin

A$179 million

For more information, see Metallica’s ASX Announcement 4 July 2012.

METALLURGICAL TESTWORK

Metallica completed its metallurgical testwork which commenced in February 2012. The testwork was highly successful, resulting in Metallica producing in excess of 1 kilogram of scandium oxide at a purity of approximately 99.99% with recovery of 85.1%.

The results confirmed the efficacy of Metallica’s proprietary technology for extraction and refining of scandium.

The metallurgical testwork was undertaken in two stages:

` Stage 1: High Pressure Acid Leach (HPAL) testwork for scandium-nickel-cobalt extraction from the SCONI laterite oretypes at SGS Lakefield Oretest (SGS) in Perth

` Stage 2: Scandium recovery and refining into scandium oxide at HRL in Brisbane

In Stage 1, a 4,400kg representative sample was treated at SGS’ HPAL pilot plant in Perth to produce 15,000L of pregnant liquor solution (PLS) which contained nickel, cobalt and scandium (and other impurities).

In Stage 2, the PLS was transported to HRL in Brisbane to be treated at a purpose build scandium extraction pilot plant. This plant produced a scandium rich solution, which was then refined into scandium oxide.

Metallica is in the process of registering patents for its scandium extraction and refining technology.

For more information, please refer to Metallica’s ASX announcements:

` Stage 1 – 8 March 2012

` Stage 2 – 25 July 2012

NATIVE TITLE

During the quarter, Metallica entered into an ILUA with the Gugu Badhun People, the registered native title claimants for Greenvale and the surrounding region. The agreement is a milestone event and an essential step in the development of the SCONI project.

The ILUA provides Metallica with a clear native title process for the grant of all exploration and mining tenure within the ILUA area. This will facilitate the development and mining of the SCONI project.

MINERAL RESOURCE RE-TABULATION

The completion of the Scoping Study significantly improved Metallica’s understanding of the SCONI project. The current Mineral Resource estimate has contributed to the economic feasibility of the project.

Metallica commissioned Golder Associates to re-tabulate the SCONI Mineral Resources for each deposit. Previously, Metallica reported nickel-cobalt and scandium resources separately using the following cut-off grades:

` Ni-Co resources – 0.7% Nickel Equivalent; and

` Sc resources – 70g/t

Note that the relative value of Co has changed with time of the

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original resource statements for each deposit, such that NiEq = Ni + 3Co for Kokomo, Minnamoolka and Bell Creek and Ni +2Co for Greenvale and Lucknow.

The Scoping Study and the metallurgical testwork provided Metallica with technical and economic confidence to recover nickel, cobalt and scandium from the SCONI laterite ores.

Improvements of Metallica’s ability to extract scandium as well as nickel and cobalt has prompted Metallica to include scandium in the NiEq calculation to maximise the value of the deposit for the scoping study by considering marginal grade nickel-cobalt and marginal scandium material which combine to provide high value. For example previously blocks with 0.65% NiEq and 65g/t Sc were not reported. The collective resources within this block can be considered to have increased value, therefore improving the revenue potential of the block and the project.

In addition over time the value of cobalt relative to nickel has changed and has been re-evaluated for current price scenarios.

The SCONI Resources have been re-tabulated by combining the nickel, cobalt and scandium grades using a new nickel equivalent cut-off grade of 0.7% where:

NiEq = Ni + 1.5Co + 0.01Sc

This formula has been derived using the following commodity prices and recoveries:

Nickel – US$10.00/lb and 90% recovery

Cobalt – US$15.00/lb and 90% recovery

Scandium – US$1,500/kg Scandium Oxide and 90% recovery

Scandium was not evaluated in the northern deposits which were explored at an earlier stage. Consequently the deposits estimated by Metallica are presented in two parts. The Southern Deposits where scandium estimates are available are presented in Table 4. These are currently the focus for start-up development. The Northern Deposits where scandium is not estimated are presented in Table 5.

These combine for the updated Mineral Resource for the SCONI deposits which are now reported at a consistent cobalt value and the inclusion of scandium in the nickel equivalence avoids dual resource tables for the same deposits. The total resource tonnage has increased as a result of the inclusion of marginal nickel-cobalt and marginal scandium resource. As a consequence the average grades are generally lower. This affect will be counterbalanced by the ability to increase the cut-off grade for selective mining scenarios.

As a result of the re-tabulation of Mineral Resources, Metallica’s contained nickel resource has increased from 406kt to 467kt (15% increase). In addition, Metallica’s contained scandium resource has increased from 2,175t to 3,827t (76% increase).

For the Southern Deposits, Metallica also presents the Mineral Resource estimates at a COG of NiEq 1.0, see Table 5. The calculation of the Mineral Resource at a higher COG will assist future mining studies in optimising the mine plan to target the highest grade resources over an initial 20 year life.

PROJECT NAME CHANGE

The Scoping Study made it clear that scandium is the key focus of the SCONI project (previously known as NORNICO). This new name represents an acronym for Scandium-Cobalt-Nickel, the three metals that can be produced at the project.

SCANDIUM MARKET DEVELOPMENT

Metallica is holding discussions with potential end users of scandium in both the Solid Oxide Fuel Cell sector and the Aluminium Alloy sector in relation to potential offtake.

Metallica remains confident that the demand for scandium from these sectors could far exceed the current market supply (estimated at ~10,000kg per annum) and therefore support the commercial development of SCONI.

Securing offtake for scandium oxide is the largest risk for the SCONI project, however it also represents a unique opportunity for Metallica in becoming the world’s first major, reliable and long-term produce of scandium.

The production of scandium oxide from metallurgical testwork was a crucial step in the market development process.

Metallica will be providing samples of scandium oxide to various potential end users, to confirm its suitability for use in their operations.

SCONIS c a n d i u m � C o b a l t � N i c k e l

Figure 3: Scandium

Oxide produced

by Metallica

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Table 4: Updated Mineral Resource Statements for the SCONI Project Southern Deposits (focus of Scoping Study) >0.7% Ni Eq COG

Deposit Mt Ni Co ScNi Metal

(kt)Co Metal

(kt)Sc Metal

(t)Sc Oxide

(t)

Kokomo

Measured 2.2 0.57 0.11 80 12.2 2.5 173 260

Indicated 17.2 0.56 0.09 49 95.8 15.5 843 1,264

Inferred 10.2 0.36 0.04 59 36.7 4.5 603 905

Totals 29.5 0.49 0.08 55 144.7 22.5 1,619 2,429

Greenvale Mine Site

Measured 4.8 0.78 0.06 38 37.8 3.0 186 279

Indicated 9.5 0.71 0.05 38 67.0 4.9 360 541

Inferred 1.9 0.71 0.05 34 13.3 0.9 65 97

Totals 16.2 0.73 0.05 38 118.1 8.8 611 917

Lucknow*

Measured 1.7 0.45 0.10 103 7.9 1.8 180 271

Indicated 10.6 0.27 0.07 128 28.5 7.2 1,357 2,035

Inferred 1.5 0.40 0.07 41 5.8 1.0 60 90

Totals 13.8 0.31 0.07 116 42.2 10.0 1,597 2,396

Combined SCONI Southern Deposits Resource

Measured 8.7 0.66 0.08 62 57.9 7.2 539 809

Indicated 37.3 0.51 0.07 69 191.3 27.6 2,560 3,840

Inferred 13.5 0.41 0.05 54 55.9 6.4 728 1,092

Totals 59.5 0.51 0.07 64 305.1 41.1 3,827 5,741

Figure 4: Metallica metallurgist Kevin Pery at SGS Pilot Plant

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Table 4: Northern Deposits >0.7% Ni Eq COG

Deposit Mt Ni CoNi Metal

(kt)Co Metal

(kt)

Bell Creek South

Measured 7.8 0.96 0.07 75.5 5.1

Indicated 0.1 0.81 0.05 1.2 0.1

Inferred

Totals 8.0 0.96 0.07 76.7 5.2

Bell Creek North

Measured

Indicated 2.0 0.86 0.03 16.8 0.5

Inferred

Totals 2.0 0.86 0.03 16.8 0.5

Bell Creek Northwest

Measured

Indicated 2.5 0.81 0.05 20.1 1.2

Inferred

Totals 2.5 0.81 0.05 20.1 1.2

The Neck

Measured

Indicated 0.4 0.84 0.03 3.5 0.1

Inferred

Totals 0.4 0.84 0.03 3.5 0.1

Minnamoolka

Measured

Indicated 4.7 0.82 0.05 38.3 2.1

Inferred 0.9 0.78 0.04 6.7 0.3

Totals 5.5 0.82 0.04 45.0 2.4

Combined SCONI Northern Deposits Resource

Measured 7.8 0.96 0.07 75.5 5.1

Indicated 9.7 0.83 0.04 79.9 4.0

Inferred 0.9 0.78 0.04 6.7 0.3

Totals 18.4 0.88 0.05 162.1 9.4

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Table 5: Updated Mineral Resource Statement Southern Deposits (focus of Scoping Study) - cut-off grade NiEq > 1.0%

Deposit Mt Ni Co ScNi Metal

(kt)Co Metal

(kt)Sc Metal

(t)Sc Oxide

(t)

Kokomo

Measured 1.5 0.64 0.14 97 9.8 2.2 149 223

Indicated 8.7 0.60 0.11 75 52.3 9.8 655 983

Inferred 3.7 0.42 0.06 83 15.3 2.2 304 456

Totals 13.9 0.56 0.10 80 77.4 14.2 1,108 1,662

Greenvale Mine Site

Measured 3.2 0.98 0.08 39 30.8 2.4 123 185

Indicated 5.2 0.94 0.07 39 49.3 3.7 206 309

Inferred 1.0 0.94 0.06 35 9.3 0.6 35 52

Totals 9.4 0.95 0.07 39 89.4 6.7 364 545

Lucknow*

Measured 1.2 0.44 0.11 139 5.3 1.3 168 252

Indicated 8.5 0.26 0.07 149 21.8 5.7 1,265 1,897

Inferred 0.4 0.37 0.07 71 1.4 0.3 27 40

Totals 10.1 0.28 0.07 145 28.5 7.3 1,459 2,189

Combined SCONI Southern Deposits Resource

Measured 5.9 0.78 0.10 75 45.8 5.9 440 659

Indicated 22.4 0.55 0.09 95 123.4 19.1 2,126 3,189

Inferred 5.1 0.51 0.06 72 26.0 3.1 365 548

Totals 33.4 0.59 0.08 88 195.2 28.2 2,931 4,396

Notes to Table 4 and 5: Competent Persons Statement located at the end of this section

1. Scandium is typically sold as an oxide product. Hence the equivalent scandium oxide has been calculated at 1.5 times contained scandium.

2. The resources for the Southern Deposits of Lucknow, Greenvale and Kokomo are reported at a cut-off grade (COG) calculated as NiEq = (Ni + 1.5Co + 0.01Sc). This NiEq COG formula has been calculated using commodity prices of US$10/lb nickel, US$15/lb cobalt and US$1,500/kg scandium oxide, and recoveries of 90% for all three metals. The resources for the Northern Deposits of Bell Creek South, Bell Creek North, Bell Creek Northwest, Minnamoolka and The Neck are reported at a COG calculated as NiEq = (Ni + 1.5Co). This NiEq COG formula has been calculated using commodity prices of US$10/lb nickel and US$15/lb cobalt, and recoveries of 90% for both nickel and cobalt The change to the current NiEq COG is to account for current metal prices and ensure that all significant nickel, cobalt and scandium mineralisation is included in the resource estimate. Metallica indicates that the metallurgical testwork to date provides reasonable potential for the nickel, cobalt and scandium to be recovered at similar recoveries to those achieved in the testwork.

3. Variations in total may be present due to rounding factors.

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Competent Person’s Statement (SCONI)

Technical information & exploration results contained in this report has been compiled by Metallica Minerals Ltd full time employee Andrew Gillies (B.Sc Geology) in the position of Managing Director. Mr Gillies is a member of the Australasian Institute of Mining & Metallurgy & has sufficient experience that is relevant to the style of mineralisation being reported on to qualify as Competent Persons as defined in the 2004 edition of the Australasian Code for Reporting of Minerals Resources & Ore Reserves. Mr Gillies consents to the inclusion in this report of the matters based on the information in the form & context in which it appears.

The SCONI Scandium-Cobalt-Nickel project Mineral Resource estimate(s) is based upon & accurately reflects data compiled, validated or supervised by Mr John Horton, Principal Geologist, who is a Fellow of the Australasian Institute of Mining & Metallurgy & a full time employee of Golder Associates Pty Ltd. Mr Horton has sufficient experience that is relevant to the style of mineralisation & the type of deposit under consideration & to the activity which he has undertaken to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for the Reporting of Exploration Results, Mineral Resources & Ore Reserves’. Mr. Horton consents to the inclusion of this information in the form & context in which it appears in this document.

Figure 5: SGS Pilot Plant

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Oresome AustraliaMETALLICA 100%

Figure 6: Gippsland Mineral Resource Outline

OVERVIEW

Metallica’s wholly owned subsidiary Oresome Australia continued to progress its two mineral sand projects, Gippsland and Weipa.

GIPPSLAND (OPTION TO ACQUIRE 100%)

Oresome continued to advance its work on the Gippsland Zircon – Ti Material project. The key achievement for the quarter was the delineation of a maiden JORC Resource for the project in April. The delineation of the resource followed a successful drilling campaign in January 2012, which was combined with data from historical workings.

The Gippsland resource totals 1.7Bt @ 2.2% THM (refer to Table 7).

Other work undertaken on Gippsland throughout the quarter included:

` Completion of AECOM project risk assessment, including environmental assessment

` Additional drilling at Mossiface target

` Metallurgical testing

` Scoping Study (remains ongoing)

Metallica retains an exclusive option to purchase a 100% interest in Gippsland from Rio Tinto Exploration Pty Ltd for A$8M. This option expires 24 August 2012.

URQUHART POINT

Oresome continued to progress a Definitive Feasibility Study (DFS) and Environmental Impact Study (EIS) for a modest sized mining operation at Urquhart Point.

The DFS will be based on a 700,000tpa mining operation to produce a zircon-rutile rich concentrate.

The EIS has been completed and has been submitted and advertised for public review.

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GIPPSLAND MINERAL RESOURCE STATEMENT

Table 7 Glenaladale-Stockdale Deposit Mineral Resource at 1.0% HMS cut-off

Resource CategoryTonnes

(Mt)THM (%)

Slimes <38 µm size (%)

Contained HM (Mt)

Inferred 1,700 2.2% 24.4% 38

Reported in accordance with the JORC Code

Glenaladale-Stockdale Deposit Inferred HMS Assemblage Mineral Resource (contained within the THM) at a cut-off of 1% THM

Tonnes (Mt)

THM (%)

HMS Mineral Assemblage (Inferred)

Zircon (%)

Rutile (%)

Combined Titanium Materials

(%)

Monazite (%)

360 2.7% 15% 4% 50% 0.6%

Tonnes (Mt)

Contained HM (Mt)

Contained HMS Mineral Assemblage (Inferred)

Zircon (kt)

Rutile (kt)

Combined Titanium Materials

(kt)

Monazite (kt)

360 9.7 1,420 400 4,760 60

Reported as Inferred in accordance with the JORC Code

Competent Persons Statements

Technical, mineral and exploration information contained in this report has been compiled by Oresome Australia Pty Ltd and its parent company Metallica Minerals Ltd Managing Director Mr Andrew Gillies B.Sc. M. AUSIMM, who is a competent person and a member of the Australasian Institute of Mining and Metallurgy and has relevant experience to the mineralisation being reported on to qualify as Competent Person as defined by the Australasian Code for Reporting of Minerals Resources and Reserves. Mr Gillies consents to the inclusion in this presentation of the matters based on the information in the form and context in which it appears.

The Mineral Resource estimates have been prepared by Mr Rodney Webster of AMC Consultants. Mr Webster BappSc, who is a competent person and a member of the Australasian Institute of Mining and Metallurgy and has relevant experience in the style of mineralisation being reported on to qualify as Competent Person as defined by the Australasian Code for Reporting of Minerals Resources and Reserves. Mr Webster consents to the inclusion in this presentation of the matters based on the information in the form and context in which it appears.

Oresome AustraliaMETALLICA 100%

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SAFETY & ENVIRONMENT

During the June 2012 quarter, there were no reportable lost time injuries or safety incidents. Metallica remained compliant with all its environmental obligations during the period.

The Company takes environmental responsibility and land care seriously and progressively rehabilitates areas disturbed by exploration activities.

FINANCIAL

As at 30 June 2012, Metallica’s cash balance was approximately $7.2M.

This includes A$1M of cash drawn down from an available A$5M debt facility, leaving A$4M undrawn. Metallica expects to receive A$3.7M in August 2012 for its Orion Metals Ltd and Planet Metals Ltd shareholdings

COMMUNITY RELATIONS

Metallica sponsored the annual Greenvale Camp Draft, which drew attendance from many people in the surrounding region.

Corporate & FinancialTO BE READ IN CONJUNCTION WITH APPENDIX 5B ATTACHED

Metallica also sponsored the Mt Garnet races, which held its annual cup race day. Both these events were held over the May day long weekend.

Metallica remains focused on ensuring it retains a strong presence in the regional communities that surround the SCONI project.

LISTED INVESTMENTS

Metallica retains interestes in listed investments per the table below.

On 31 May 2012, Orion Metals recommended a $0.16 per share takeover bid from Australia Conglin International Investment Group Pty Ltd.

Metallica accepted the takeover offer on 4 July 2012. Once complete, Metallica will receive A$2.3M for its shares in Orion Metals.

On 22 June 2012, Planet Metals announced its intention to undertake a return of capital to shareholders, resulting in a distribution of $0.065 per share. The return of capital was approved on 25 July 2012. Metallica will receive A$1.4M from the return of capital.

Metallica’s ASX Listed Investments and Cash as at COB 26 July 2012

ASX Code

Commodity Company MLM hold% MLM

holdNo.

SharesShare Price

Market Value ($)

MTE Coal Metro Coal 176,683,663 30.8% 64,300,000 27.0c $17.4M

CBX Bauxite Cape Alumina 152,284,819 19.7% 29,954,405 11.0c $3.3M

PMQ Copper Gold Planet Metals 59,717,114 37.0% 22,069,619 8.8c $1.9M

ORM Gold & REE’s Orion Metals 79,597,443 15.7% 12,552,658 15.0c $1.9M

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Appendix 5BMINING EXPLORATION ENTITY QUARTERLY REPORT

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

Metallica Minerals Limited

ABN Quarter ended (“current quarter”)

45 076 696 092 June 30, 2012

CONSOLIDATED STATEMENT OF CASH FLOW

Cash flows related to operating activities Current quarter $A’000

Year to date (9 months) $A’000

1.1 Receipts from product sales and related debtors 33 1031.2 Payments for

(a) exploration and evaluation(b) development (c) production(d) administration

(249)

(3,338) (27)

(597)

(1,196) (6,622)

(252) (2,593)

1.3 Dividends received 83 3111.4 Interest and other items of a similar nature received1.5 Interest and other costs of finance paid (110) (110)

1.6 Income taxes paid - Rand D tax refund - 2291.7 Other (provide details if material)

Net Operating Cash Flows (4,205) (10,130)Cash flows related to investing activities

1.8 Payment for purchases of:(a) prospects(b) equity investments(c) other fixed assets

(100)

(200)

1.9 Proceeds from sale of:(a) prospects (b) equity investments (c) other fixed assets

- -

50

7,520

1.10 Loans to other entities 1.11 Loans repaid by other entities - MetroCoal Ltd - 1,0001.12 Other (provide details if material)

Net investing cash flows (100) 8,3701.13 Total operating and investing cash flows (4,305) (1,760)

Cash flows related to financing activities1.14 Proceeds from issues of shares, options, etc.1.15 Proceeds from sale of forfeited shares1.16 Proceeds from borrowings (1,000) (1,000)1.17 Repayment of borrowings1.18 Dividends paid1.19 Other (provide details if material)

Net financing cash flows (carried forward) - 3,600For

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Appendix 5B

Net financing cash flows (brought forward) - 3,600Net increase (decrease) in cash held (3,305) 3,840

1.20 Cash at beginning of quarter/year to date 10,485 3,3401.21 Exchange rate adjustments to item 1.201.22 Cash at end of quarter 7,180 7,180

PAYMENTS TO DIRECTORS OF THE ENTITY AND ASSOCIATES OF THE DIRECTORS PAYMENTS TO RELATED ENTITIES OF THE ENTITY AND ASSOCIATES OF THE RELATED ENTITIES

Current quarter $A’000

1.23 Aggregate amount of payments to the parties included in item 1.2 1521.24 Aggregate amount of loans to the parties included in item 1.10 Nil1.25 Explanation necessary for an understanding of the transactions

NON-CASH FINANCING AND INVESTING ACTIVITIES


2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

Nil

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Nil

FINANCING FACILITIES AVAILABLE

Add notes as necessary for an understanding of the position

Amount available $A’000

Amount used $A’000

3.1 Loan facilities 5,000 1,0003.2 Credit standby arrangements Nil Nil

ESTIMATED CASH OUTFLOWS FOR NEXT QUARTER

$A’0004.1 Exploration and evaluation 1004.2 Development (including Feasibility Studies) 2,5004.3 Production -4.4 Administration 600

Total 3,200

RECONCILIATION OF CASH

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows


Previous quarter $A’000

5.1 Cash on hand and at bank 21 7,4065.2 Deposits at call 7,159 3,0095.3 Bank overdraft - -5.4 Other (provide details) - -

Total: cash at end of Quarter (item 1.22) 7,180 10,485

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CHANGES IN INTERESTS IN MINING TENEMENTS

Tenement reference

Nature of interest (note 2)

Interest at beginning of

quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed EPM 14518 EPM EPM Nil

6.2 Interests in mining tenements acquired or increased MLA 10368 MLA Nil MLA

ISSUED AND QUOTED SECURITIES AT END OF CURRENT QUARTER

Total number Number quoted Issue price per security (see note

3) (cents)

Amount paid up per security (see

note 3) (cents)7.1 Preference +securities

(description)

Nil7.2 Changes during quarter

(a) Increases through issues(b) Decreases through returns

of capital, buy-backs, redemptions

Nil

Nil

7.3 +Ordinary securities 132,357,710 128,957,7107.4 Changes during quarter

(a) Increases through issues Escrow Release

(b) Decreases through returns of capital, buy-backs

Nil

Nil

7.5 +Convertible debt securities (description)

Nil

7.6 Changes during quarter(a) Increases through issues(b) Decreases through securities

matured, converted

Nil

Nil

7.7 Options (description and conversion factor) Exercise price Expiry date

1,100,000 Nil 65 cents 28 September 2012

500,000 Nil 35 cents 29 July 2014

1,000,000 Nil 50 cents 3 August 2013

1,000,000 Nil 70 cents 3 years from date of announcement

of decision to mine Kokomo or

Lucknow Scandium Deposits

400,000 Nil 46 cents 31 August 2012

600,000 Nil 52 cents 28 February 2013

5,000,000 Nil 38 cents 17 November 2013

2,300,000 Nil 35 cents Granted but not yet vested

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Total number Number quoted Issue price per security (see note

3) (cents)

Amount paid up per security (see

note 3) (cents)7.8 Issued during quarter Nil7.9 Exercised during quarter Nil7.10 Expired during quarter Nil7.11 Debentures (totals only) Nil7.12 Unsecured notes (totals only) Nil

COMPLIANCE STATEMENT

1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

2 This statement does give a true and fair view of the matters disclosed.

Sign here:.........................................................................Date: 31 July, 2012.

(Director/Company secretary)

Print name: JOHN KEVIN HALEY

NOTES

1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.

4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.

5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

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ASX:MLM

Subsidiary companies:NORNICO Pty Ltd ACN 065 384 045Oresome Australia Pty Ltd ACN 071 762 484Lucky Break Operations Pty Ltd ACN 126 272 580Phoenix Lime Pty Ltd ACN 096 355 761Greenvale Operations Pty Ltd ACN 139 136 708Scandium Pty Ltd ACN 138 608 894

An Australian scandium-cobalt-nickel and zircon-titanium minerals resource development company.

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

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for personal use only - asx.com.au · greenvale nickel long section - 7900550n looking north ......

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