Old Queensland mine now a significant nickel-cobalt-scandium play

Metallica Minerals Ltd said today it was now undertaking fulltime technical and metallurgical studies to develop its 100% owned nickel and scandium project near Townsville in north Queensland.

Known as the NORNICO project, this has been a major play for Metallica and takes in the old Greenvale nickel-cobalt laterite mine that completed its mining cycle in the 1980s but its refinery at Yabulu near Townsville continued to operate by processing ore imported from Indonesia and New Caledonia.

At one time, colourful entrepreneur Alan Bond had control of the Yabulu plant.

Metallica's managing director Andrew Gillies said no further exploration drilling on the projects is required and significantly the final round of drilling on the Greenvale deposit - at the southern end of the NORNICO project area - boosted reserves and enhanced "the prospect of a new tri-metal processing plant being established in Queensland."

He said an initial scoping study proposed a A$132 million (US$132.48 million) stage one operation for a mining and processing operation of 180,000 tonnes per annum based on the Greenvale and Lucknow deposits would be "economically and technically robust."

The resources at these two deposits would be sufficient, he said, to support a 10 year operation to treat between 180,000 and 220,000 tpa for high grade nickel, cobalt and scandium.

The proposed operation would be sourced from Greenvale and Lucknow and supplemented in later years with high grade ore within the Kokomo deposit, north of Greenvale.

Using an 0.7% nickel equivalent cut-off grade, Greenvale has a resource of 8 million tonnes grading 1.Asian Metal Copyright08% cobalt, 21% iron and 33 gramstonne scandium.Asian Metal Copyright04% nickel, 0.08% cobalt, 21% iron and 33 grams/tonne scandium.Asian Metal Copyright04% nickel, 0.Asian Metal Copyright Using a 1.Asian Metal Copyright08% cobalt, 21% iron and 33 gramstonne scandium.Asian Metal Copyright2% Ni eq cut-off, the Greenvale resource was 3.Asian Metal Copyright Known as the NORNICO project, this has been a major play for Metallica and takes in the old Greenvale nickel-cobalt laterite mine that completed its mining cycle in the 1980s but its refinery at Yabulu near Townsville continued to operate by processing ore imported from Indonesia and New Caledonia.Asian Metal Copyright87 Mt @ 1.Asian Metal Copyright Using a 1.Asian Metal Copyright27% Ni, 0.1% Co, 21% Fe and 32 g/t Sc.

Lucknow has, using an 0.7% Ni Eq cut-off 2.Asian Metal Copyright08% cobalt, 21% iron and 33 gramstonne scandium.Asian Metal Copyright42 Mt @ 0.Asian Metal Copyright The proposed operation would be sourced from Greenvale and Lucknow and supplemented in later years with high grade ore within the Kokomo deposit, north of Greenvale.Asian Metal Copyright57% Ni, 0.2% Co and 94 g/t Sc.

The scandium resource within Lucknow is subject to a joint venture with Straits Resources Exploration Ltd in which Metallica has an 80% equity.