Home' Australian Resources and Investment : March 2010 Contents 26 • MARCH 2010 • AUSTRALIAN RESOURCES & INVESTMENT
Metallica – A Diversified driver
behind Queensland’s modern
era minerals resurgence
ith emphasis on a multi-commodity resource portfolio –
primarily running the length of the Queensland east coast
and with a balance now of near and medium term
maiden mining and revenue opportunities, those doing
their homework on Metallica would find themselves starting to tick most
of the Company’s boxes, against the track record of value-adds and
upside streaming from the MLM bunkers.
It is not just Metallica’s own major domestic interests in nickel-
cobalt, coal, bauxite, tungsten-moly, scandium, zircon-rutile, gold and
copper that are attracting renewed equities market interest but the way
in which the Andrew Gillies-led explorer and developer has aggressively
driven, and directly linked its future to, key resource projects with high
mine potential, and strategic, some would say, pivotal stakes in like-
minded and newly ASX-listed explorers which themselves are carving an
invigorated, new era resources sector in Queensland.
The flagship in the MLM stable is Metallica’s 100%-owned NORNICO
nickel cobalt project, for which a favourable pre-feasibility study for a
1 million tonnes per annum processing operation was completed
towards the end of last year – although new mining and processing
strategic options have since taken its place.
Nestled between Mt Garnet and Greenvale, inland from Cairns and
Townsville, the 38.6 million tonnes (Mt) NORNICO Measured, Indicated
and Inferred Resource grading 0.78% Ni and 0.08% Co for 302,000t Ni
and 30,600t Co, features three main areas of nickel laterite deposition –
Bell Creek, Minnamoolka and Kokomo.
Metallica recently added to the NORNICO holding with the A$1.65
million acquisition and inclusion of the remnant 37Mt Inferred and
Indicated Greenvale nickel-cobalt resource, the Lucknow Co-Ni
deposit. Importantly, this mineralised area in the southern end of the
main NORNICO footprint contains high grade nickel zones in excess of
1.4% nickel and large low grade areas and mine dumps which may be
suitable for upgrading by simple screening. It is also home to the
former Greenvale nickel mine which operated between 1974 and 1992
and was Australia’s largest high grade nickel laterite mine.
The Company’s nickel profile is rounded out by the inclusion of its
60% stake in the Lucky Break nickel project about 100km to the
southeast of Greenvale and 140 kilometres west of Townsville.
Metallica has a free carried interest in Lucky Break to which 40%
farm-in partner, the ASX-listed Metals Finance Corporation (“MFC”) is
planning an 800 tonne per annum nickel metal production operation
with feasibility studies due for completion early in 2010.
Heavy mineral sands interests around Weipa, some producing and
developing limestone quarry assets around Queensland, and a 75% stake
earned in 2009 in three IOCGU targets near Oodnadatta, Hawker and
Carrapateena in South Australia (the Company’s only venture to date
outside of its home state) complete the Metallica minerals assets
In addition to its major shareholding in ASX listed entities –
MetroCoal (ASX: MTE), Cape Alumina (ASX: CBX), Planet Metals (ASX:
PMQ), and Orion Metals (ASAX: ORM) – Metallica’s future is firmly
cemented in the NORNICO nickel-cobalt-scandium project.
As resource drilling has been all but completed in the main three
NORNICO deposits, Metallica’s 2010 drill momentum will swing primarily
over the next 12 months to proving up additional Greenvale-Lucknow
resource – particularly high grade zones.
This will add to the strong head-start for NORNICO in 2010 when
Kokomo opened its account in January with a 36% boost in total
Measured, Indicated and Inferred Mineral resource to 16.3Mt @ 0.67%
Ni and 0.12% Co – containing approximately 109,000 tonnes of nickel
and 19,500 tonnes of cobalt.
A drilling and resource update – expected by the end of the March
2010 quarter of the newly acquired Greenvale assets – is aimed at
further expanding the overall NORNICO resource picture.
In addition, scandium – the rare earth used as an additive in
aluminium alloys, in fuels cells and lighting – is present in high grades
at Kokomo (9Mt @ 109 g/t Sc containing 970 tonnes of scandium
metal or 1,480 tonnes of scandium oxide) – scandium is very rarely
enriched >50g/t Sc. Metallica has 80% of Kokomo’s scandium rights
with Straits Resources holding the other 20% stake.
When assessed by Metallica, along with the deposit’s cobalt rich
nickel mineralisation and the end of 2009 appraisal of the Company’s
original plans for a 1 million tonne per annum NORNICO mining
operation – Metallica elected to take up a new tack on how its maiden
nickel mining should be optimised.
This resulted in the initiation of a scoping pre-feasibility study into
mining high grade ores from Greenvale and trucking over a 50 kilometre
distance, some of the cobalt rich Kokomo nickel laterite ore to a
processing plant at the disused Greenvale mine site, and blending the
Kokomo cobalt rich nickel ore with high grade Greenvale nickel ore to
establish a small-scale but high grade nickel-cobalt-scandium mining
operation of around 100,000 – 150,000 tonnes per annum –
effectively – NORNICO Stage 1 mine.
Greenvale is an excellent development site, with roads, water, town
infrastructure extremely close by. Acid supply via road delivery would be
sourced from Townsville. Already, initial pit design work, mining
schedule and mining lease applications for Kokomo’s first mined
offerings, are being progressed in the opening months of 2010.
A final green-light on Stage 1 awaits further metallurgical work
and the feasibility study but start-up would deliver earlier than
anticipated maiden cash flow around mid 2012, while allowing Metallica
Brisbane-based Metallica Minerals Limited – a diversified
company with a Queensland resources industry focus –
continues to successfully build a portfolio of modern
minerals assets that are on the verge of first mining within
the next few years.
Links Archive December 2009 May 2010 Navigation Previous Page Next Page