SIGNIFCANT INCREASE IN VOLUME AND CATEGORY … · RESOURCE FOR URQUHART BAUXITE PROJECT ......

ASX RELEASE

14 NOVEMBER 2016

SIGNIFCANT INCREASE IN VOLUME AND CATEGORY TO MINERAL RESOURCE FOR URQUHART BAUXITE PROJECT

HIGHLIGHTS Total Mineral Resource now comprises 9.5 Mt of in-demand Direct Shipping Bauxite

6.9 Mt JORC (2012) compliant Measured and Indicated Mineral Resource for Urquhart Bauxite project

New 2016 Mineral Resource estimate 26% higher than the May 2015 maiden Inferred Mineral Resource

An additional 8.5 Mt of lower grade material, over and above the 9.5 Mt has also been identified for potential beneficiation

Area A slated for first mining in Q2 2017

Pre-Feasibility Study nearing completion

Mining and haulage contract tender process well advanced

Bauxite developer, Metallica Minerals Limited (Metallica) (ASX:MLM), is pleased to announce a

maiden JORC (2012) compliant Measured and Indicated mineral resource for its Urquhart Bauxite

project (UBx), five kilometres southwest of Weipa on Queensland’s Cape York and slated for first

mining next year.

The milestone includes an inventory increase in both volume and category despite the application

of a higher cut-off grade in preparing the new estimate. The project now comprises a total JORC

(2012) Measured, Indicated and Inferred resource estimate of 9.5 million tonnes, a significant 26%

increase on the May 2015 maiden resource estimate.

The upgrade, which followed the completion of a close spaced 198-hole drilling program in August

2016, was independently prepared by IMC Mining Pty Ltd (IMC) and is summarised in the table

below:

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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%

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

Table 1 – Summary of Urquhart Bauxite low temperature JORC (2012) Resource

Metallica CEO, Mr Simon Slesarewich: “We were confident that the overall tonnage at Urquhart Bauxite would increase from the 2015

JORC Mineral Resource. However, we are extremely encouraged by the grade of the deposit and in

particular, the delineation of a new large low grade area which has the potential to be upgraded

via conventional screening to deliver additional tonnages and extend the mine life of the project.

Work is significantly progressed on the Pre-Feasibility Study and is nearing completion. The project

remains on schedule to commence production in Q2 of 2017."

URQUHART BAUXITE PROJECT SUMMARY

The Urquhart Bauxite project is situated approximately 5 km southwest of Weipa on Queensland’s

Western Cape York Peninsula (See Figure 1). Western Cape York is world-renowned for its extensive

deposits of high-quality, export grade pisolitic bauxite.

The maiden Inferred Mineral Resource was announced on 11 May 2015 and was subsequently

followed by a favourable mine planning internal assessment. Infill drilling of the main resource at

Area A with 80m and 160m grid drilling in August 2016 (See Figure 2), has upgraded the Mineral

Resource classification for the first time to Measured and Indicated, respectively. The drilling has

also extended the Mineral Resource limits. Sonic drilling completed for density measurements has

indicated a higher in-situ density than previously assumed for the maiden statement.

The new results and geological modelling confirm that the UBx resource is suitable for Direct

Shipping Bauxite (DSB). A pre-feasibility study (PFS) to assess mining of DSB and shipping via

nearby Hey Point is now well advanced and is expected to be completed and released within a

month.

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The project’s Weipa-type pisolitic bauxite is of high quality export grade with high alumina content

(>50% Al2O3) that is well known and accepted by Chinese and other alumina refineries.

UBx consists of two (2) bauxite plateaus, known as Area A and Area B; both of which are wholly

contained within EPM15268, held 50% by Oresome Australia Pty Ltd (a wholly-owned subsidiary of

MLM) and 50% by Ozore Resources Pty Ltd. The relevant Mineral Resource areas are now also

included in a Mining Lease Application (MLA 100044).

In 2016, infill drilling on 80m and 160m grid spacing has concentrated on the planned initial

mining development at Area A.

The 2016 Mineral Resource estimate for UBx (for both Areas A and B) for a contiguous geological

horizon interpreted at a 48% Al2O3 cut-off for DSB is contained in Table 2. This is higher than the

45% Al2O3 cut-off grade used to prepare the maiden May 2015 resource statement. Additional

details by area and a visual summary of the resource model, are provided in Figure 3 to Figure 7.

Classification Area Mt Al2O3 % SiO2 % AAl%* RSi %**

Measured A 3.0 54.4 11.8 43.2 5.0

Indicated A 3.9 53.3 13.1 40.8 5.2

Inferred A 0.3 54.2 11.3 42.0 4.7

B 2.3 49.9 17.4 37.2 6.0

Subtotal 2.6 50.3 16.8 37.6 5.9

Total 9.5 52.8 13.7 40.7 5.3

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

Table 2 - Urquhart bauxite project DSB Mineral Resource at an effective cut-off of 48% Al2O3

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LOCATION

Urquhart Point (EPM15268) is located some 5 km southwest of the township of Weipa on the

western side of Cape York (See Figure 1).

Figure 1 – Urquhart bauxite project location looking north-east

TENURE

EPM15268 forms part of the Cape York HMS and Bauxite Joint Venture (JV) currently held 50% by

Oresome Australia Pty Ltd (a 100%-owned subsidiary of Metallica Minerals Limited), and 50% by

Ozore Resources Pty Ltd.

The JV has lodged a Mining Lease Application (MLA 100044) an area of 1379Ha (Figure 1), covering

the UBx Mineral Resource (Areas A and B).

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GEOLOGY

The deposit type is a bauxite laterite derived from the tropical to sub-tropical weathering of

aluminous sediments. The deposit appears typical of the pisolitic bauxite style that occurs in the

Weipa area on Cape York. The deposit is near the coast and is covered by unconformable sands.

DRILLING

Resource definition drilling (Figure 2) was completed by Wallis Drilling using a reverse circulation

aircore drill rig in two programs:

85 NQ (83mm) aircore holes for 472.5m were completed at Area A and Area B late in 2014

largely on a 320m grid spacing, and

175 HQ (103mm) aircore holes for 1,442m were completed at Area A in August 2016 largely

on a 80m and 160m grid spacing.

Significant aircore resource definition intercepts for the 2016 program are reported in Appendix A.

In addition, 23 sonic drill holes for 112.3m were completed at Area A and Area B in September

2016 for the purpose of collecting density samples.

Drill collars were initially located during drilling by a hand-held Garmin GPS considered to have an

accuracy of ±5 m. A licenced surveyor surveyed all completed drill hole collars in 2016 using the

MGA GDA94 Zone 54L grid system.

A Light Detection and Ranging (LiDar) topographic survey was flown over the project area in 2016.

The LiDar topographic data was consistent with the 2016 collar surveys and confirmed bias issues

with the 2014 collar survey elevations. The 2014 collars were corrected to the LiDar survey. There

are no concerns with the 2014 collar survey easting and northing coordinates as the bias issues

were confined to elevation datum.

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Figure 2 – Urquhart bauxite project - Plan of drilling and Mineral Resource classification

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SAMPLING

Drilling was sampled and logged on 0.25m intervals. Bauxitic material was selected for analysis and

collected on 0.25m or 0.5m composited intervals. The entire sample was submitted to ALS

Laboratory in Townsville for sample preparation by drying at 105°C and then riffle-split to provide

a representative sub-sample which was pulverised to a nominal 85% passing below 75 microns.

Free moisture content was derived from the weight difference, pre and post drying.

ANALYSIS

Sample analyses on the pulps were undertaken by ALS Laboratory in Brisbane. The analytical

method included:

Total oxide XRF multielement analysis that included Al2O3 and SiO2

Loss on ignition (LOI) by thermal gravimetric analysis (TGA) furnace

Available alumina and reactive silica metallurgical digest by low temperature (150oC)

microwave digestion, chemical separation and ICP-AES analysis to provide:

- Available Alumina (AAl)

- Reactive Silica (RSi).

ESTIMATION

A block model was constructed with 40 m x 40 m x 0.25 m dimension blocks. Five domains were

interpreted with a waste and transition zone both above and below the main bauxite horizon. The

bauxite horizon was interpreted using a 48% Al2O3 cut-off and the interpreted bauxite zone is the

basis of the Mineral Resource statement. Occasional subgrade was included in the bauxite zone to

maintain geometric continuity and this inter-burden is included in the Mineral Resource statement.

The bauxite horizon and the low grade transition zones were estimated using Ordinary Kriging and

dynamic anisotropy with 0.25 m composites. Estimation was undertaken in a single wide search

range using octants to decluster the drilling and localise the sample selection. Hard boundaries

were used during estimation and mine planning will require the addition of some dilution and ore

loss.

The results are summarised in Figures 3 through Figures 6 as plan composites of the >48% Al2O3

Mineral Resource and main bauxite horizon. An example cross section from Area A is provided in

Figure 7 for all bauxitic material.

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Figure 3 – Plan of Mineral Resource block model average Al2O3

Figure 4 – Plan of Mineral Resource block model average SiO2

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Figure 5 – Plan of Mineral Resource block model thickness

Figure 6 – Plan of Mineral Resource block model overburden thickness

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Figure 7 – Area A cross section with classified bauxite block estimates for Al2O3 and SiO2 (refer to Figure 2 for the cross section location)

CLASSIFICATION

Blocks for the bauxite horizons classified as Measured, Indicated and Inferred Mineral Resource

were drilled at 80, 160 and 320m grid spacing, respectively (See Figure 2). Extrapolation of each

category is limited to half the nominal drill spacing i.e. up to 160m extrapolation beyond the

drilling for Inferred Mineral Resource.

A JORC (2012) Table 1 summary description is provided as Appendix B to this announcement.

CUT-OFF GRADE

The cut-off grade has been elevated from the 45% Al2O3 used in the maiden resource statement

(see ASX release 11 May 2015) to 48% Al2O3 cut-off grade. The cut-off is used indirectly to define

and interpret a contiguous bauxite horizon for estimation and reporting. Some sub-grade samples

are included where required to maintain spatial continuity. Geological logging and other chemistry

for SiO2, AAl and RSi were also considered as part of the resource domaining and reporting criteria.

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The effective 48% Al2O3 cut-off grade reflects the geology of the deposit and likely mine planning

requirements.

Upper and lower transition bauxite domains were defined where bauxite was logged and sampled

and were also estimated. These define additional low grade bauxite material <48% Al2O3. The

summary of the upper and lower bauxite transitional material in Table 3 is additional to the Mineral

Resource statement for DSB in Table 2.

Classification Tonnes Total Al203 Total SiO2

Measured 0.8 Mt 44.1% 27.3%

Indicated 1.8 Mt 42.0% 30.0%

Inferred 5.9 Mt 35.7% 37.9%

Total 8.5 Mt 37.8% 35.2%

Table 3 – Urquhart bauxite project transitional low-grade bauxite material <48% Al2O3 cut-off

Though not economic as a DSB product without processing, the transition domains include zones

of marginal grade material that may be considered for blending during mining, particularly from

the thicker upper transition domain which maintains similar RSi grades, even though the total silica

(SiO2) is elevated.

Wet screen (+1.2 mm) results from the 2014 drilling indicate the yield for the transition domains is

in the order of 50% to produce a +50% Al2O3 product. Though wet screening is not being

considered in the development plan, these results are encouraging. Drying screening will be

investigated to possibly augment the development plan and mine life options by processing all or

part of the low grade transitional bauxite material.

RESOURCE COMPARISON

The maiden Mineral Resource estimate was completed in 2015 based on 320m spaced drilling and

classified as Inferred. The 2015 Mineral Resource statement (see ASX release 11 May 2015) was

based on domain selection using a 45% Al2O3 cut-off. The 2016 Mineral Resource estimate which

includes Measured, Indicated and Inferred classification, revised the cut-off grade higher to 48%

Al2O3.

The global estimates are compared in Table 4 using the same 45% Al2O3 block grade cut-off and

illustrate an increase of 36% on a like for like basis.

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Significant changes include:

Mineral Resource classification has been upgraded from only Inferred in 2015 to

predominantly Measured and Indicated at Area A.

Area A has increased in volume due to drilling that has extended the Mineral Resource

limits.

Global tonnage has increased 3% due to the change in density from 1.5 t/m3 used in 2015

to an average of 1.55 t/m3 as measured in 2016 from sonic drilling samples.

Improved collar surveys and LiDar surface surveys have resolved some surveying issues in

2014 improving the confidence and geometry of the bauxite horizon that is now interpreted

to be relatively flat.

The higher cut-off grade of 48% Al2O3 used for domaining is a more natural geological

cut-off defining a consistent grade zone and introduces less dilution to the Mineral

Resource.

Area 11 May 2015 Estimate 2016 Estimate

Mt Al2O3 SiO2 Mt Al2O3 SiO2

A 5.1 52.0% 15.0% 7.8 53.1% 13.4%

B 2.4 48.8% 19.0% 2.4 49.7% 17.6%

Total 7.5 51.0% 16.3% 10.2 52.3% 14.4%

Table 4 – Global DSB resource comparison at 45% Al2O3 block cut-off

MINING

The resource model assumes mining of a DSB operation will follow normal shallow open-pit strip

mining operations, comprising top soil and overburden removal and stockpiling in advance of

progressive panel mining, followed by overburden and top soil replacement and rehabilitation with

native vegetation species. This approach has been successfully adopted for other Cape York bauxite

deposits.

The JV has previously entered into a Heads of Agreement with Green Coast Resources (GCR) for

GCR to provide access and transhipping services of DSB from UBx (see ASX release 7 April 2016),

through Hey Point, located 15km from UBx. Metallica provided working capital to GCR via a Short

Term Loan (Loan) (see ASX release 4 October 2016) to assist that company’s successful maiden

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bauxite export from the Hey Point facility (see ASX release 24 October 2016). Under the terms of

the Loan, GCR is now bound to provide transhipping services and access to Metallica.

The JV is in the process of tendering a mining and haulage contract with appropriately pre-

qualified contractors. The chosen contractor will provide labour, machinery, management and

technical support to operate the UBx mine and deliver consistent bauxite product to Hey Point,

including; mine planning, clearing and stockpiling of topsoil, removal of overburden, mining and

trucking of bauxite and rehabilitation.

The Mineral Resource extends to the dune breakaway. Mine planning will include an environmental

set-back distance which is still being considered. The set-back is unlikely to be greater than 50 m

and would exclude <5% of the Mineral Resource (principally Inferred and some Indicated

classification).

METALLURGY

Low temperature available alumina (AAl) and reactive silica (RSi) analyses have been completed for

Area A. For the lower grade transition zones, AAl and RSi are not complete and there are no

analyses available for Area B. To allow complete estimation, regression functions were used to

assign values based on the whole rock analyses. These assignments only affect the Area B Inferred

Mineral Resource area and subgrade estimates.

The JV plans to complete the low temperature metallurgical digest analyses for Area B and is

currently completing alternative high temperature metallurgical digest analyses for Total Available

Alumina (TAA) and RSi for Area A.

For more information please contact:-

Simon Slesarewich Chief Executive Officer

Phone: + 61 7 3249 3000

John Haley CFO/Company Secretary

Phone: + 61 7 3249 3000

[email protected] F

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Competent Person’s Statement

The information in this report that relates to Exploration Results and Exploration Targets is based on

information compiled by John Cameron (a geologist of over 25 years experience), and a Competent Person

who is a Member of the Australasian Institute of Mining and Metallurgy and is a contract consultant to

Metallica Minerals Ltd. Mr Cameron has sufficient experience which is relevant to the style of mineralisation

and type of deposit under consideration and to the activity being undertaken to qualify as Competent Person

as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral

Resources and Ore Reserves. Mr Cameron consents to the inclusion of this information in the form and

context in which it appears in this release/report.

The Mineral Resource estimate was undertaken by Mr John Horton, Principal Geologist, who is a Fellow and

Chartered Professional of the Australasian Institute of Mining and Metallurgy and an associate at IMC Mining

Pty Ltd. Mr Horton has sufficient experience which is relevant to the style of mineralisation and type of

deposit under consideration and to the activity being undertaken to qualify as Competent Person as defined

in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore

Reserves. Mr Horton consents to the inclusion of this information in the form and context in which it appears

in this release/report.

Caution regarding Forward Looking Statements Certain statements made in this announcement contain or comprise certain forward-looking statements.

Although Metallica believes that the estimates and expectations reflected in such forward-looking statements

are reasonable, no assurance can be given that such expectations will prove to have been correct.

Accordingly, results could differ materially from those set out in the forward-looking statements as a result

of, among other factors, changes in economic and market conditions, success of business and operating

initiatives, changes in the regulatory environment and other government actions, fluctuations in commodity

prices and exchange rates and business and operational risk management. Metallica undertakes no obligation

to update publically or release any revisions to these forward-looking statements to reflect events or

circumstances after today’s date or to reflect the occurrence of unanticipated events.

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Appendix A – 2016 Aircore drilling significant intercepts

Significant Intercepts reported at a 48% Al2O3 cut-off for DSB

Drill Hole Easting Northing From (m) To (m) Length (m) Al2O3 % SiO2 % Fe2O3 %

UPB16001 589176 8594151 NSR

UPB16002 589272 8594273 NSR

UPB16003 589356 8594409 5.50 8.00 2.50 50.4 18.8 7.7

UPB16004 589439 8594558 5.75 8.25 2.50 52.3 15.4 7.9

UPB16005 589510 8594693 5.50 7.50 2.00 53.6 12.6 6.1

UPB16006 589592 8594838 4.50 7.00 2.50 54.7 11.1 5.3

UPB16007 589637 8594900 3.75 7.00 3.25 54.2 11.9 6.6

UPB16008 589680 8594967 4.50 6.50 2.00 55.5 10.1 5.3

UPB16009 589720 8595036 4.00 7.25 3.25 50.6 15.4 7.9

UPB16010 589764 8595106 4.00 7.50 3.50 55.7 9.9 5.1

UPB16011 589806 8595169 4.50 7.50 3.00 55.4 8.8 6.6

UPB16012 589844 8595240 3.75 6.75 3.00 55.9 9.1 5.3

UPB16013 589890 8595305 4.00 7.50 3.50 55.7 11.1 3.9

UPB16014 589931 8595376 3.00 5.75 2.75 55.4 9.6 5.1

UPB16015 589974 8595444 1.50 5.25 3.75 55.4 7.4 7.2

UPB16016 590016 8595514 2.75 4.50 1.75 53.6 12.0 6.5

UPB16017 590061 8595577 3.00 5.50 2.50 52.9 13.3 6.2

UPB16018 590098 8595649 3.50 5.00 1.50 52.0 15.3 5.8

UPB16019 590179 8595796 4.00 4.75 0.75 50.4 17.6 5.2

UPB16020 590259 8595910 3.25 5.50 2.25 53.4 13.9 6.2

UPB16021 590342 8596059 3.50 5.25 1.75 52.5 13.1 5.0

UPB16022 590038 8595688 4.00 6.25 2.25 53.8 14.3 4.0

UPB16023 589991 8595614 3.00 4.75 1.75 54.6 10.9 5.6

UPB16024 589949 8595554 3.50 5.75 2.25 53.4 10.9 7.0

UPB16025 589903 8595485 2.00 5.50 3.50 55.2 8.4 6.6

UPB16026 589862 8595417 2.00 5.25 3.25 55.7 9.0 5.4

UPB16027 589820 8595347 2.50 6.00 3.50 55.6 11.1 3.5

UPB16028 589779 8595281 4.00 6.25 2.25 53.0 15.8 2.7

UPB16029 589734 8595216 3.50 6.00 2.50 52.6 15.6 3.8

UPB16030 589693 8595145 2.75 6.00 3.25 55.5 9.2 6.0

UPB16031 589653 8595077 2.50 6.00 3.50 56.6 9.6 4.0

UPB16032 589614 8595007 2.50 5.75 3.25 53.7 12.6 4.5

UPB16033 589568 8594939 2.50 5.75 3.25 55.8 8.9 5.6

UPB16034 589529 8594875 2.75 5.50 2.75 54.4 11.3 6.2

UPB16035 589459 8594914 2.75 5.50 2.75 55.1 9.7 6.2

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UPB16036 589501 8594985 2.75 5.00 2.25 53.9 11.5 5.3

UPB16037 589583 8595125 2.75 5.50 2.75 53.3 12.4 6.1

UPB16038 589627 8595189 2.00 4.75 2.75 54.3 12.7 4.9

UPB16039 589673 8595257 3.00 6.00 3.00 55.5 12.5 3.4

UPB16040 589757 8595392 1.50 5.50 4.00 56.8 7.2 7.0

UPB16041 589797 8595460 2.00 5.25 3.25 55.6 9.2 6.4

UPB16042 589840 8595531 3.50 4.75 1.25 50.4 16.9 5.8

UPB16043 589930 8595665 4.00 6.50 2.50 54.0 12.2 5.8

UPB16044 589964 8595731 4.50 6.50 2.00 52.7 12.0 6.9

UPB16045 590136 8595996 5.00 6.25 1.25 51.9 17.0 3.1

UPB16046 589896 8595775 5.00 7.75 2.75 53.5 13.2 5.1

UPB16047 589853 8595708 5.00 7.00 2.00 54.6 11.3 5.1

UPB16048 589817 8595644 4.00 7.00 3.00 55.0 9.6 6.5

UPB16049 589772 8595577 4.00 6.00 2.00 53.8 15.4 2.9

UPB16050 589723 8595505 3.50 5.75 2.25 55.0 10.4 5.7

UPB16051 589683 8595436 2.50 5.75 3.25 56.3 8.7 6.3

UPB16052 589642 8595370 3.00 6.25 3.25 54.4 13.0 4.8

UPB16053 589596 8595300 2.75 5.75 3.00 53.6 10.5 7.9

UPB16054 589552 8595234 2.50 5.25 2.75 54.2 11.0 6.0

UPB16055 589512 8595165 3.50 6.00 2.50 52.0 17.6 3.8

UPB16056 589468 8595095 3.25 5.25 2.00 51.4 18.6 3.8

UPB16057 589427 8595028 3.25 5.25 2.00 53.9 13.0 4.4

UPB16058 589389 8594960 2.50 4.75 2.25 53.4 13.5 4.9

UPB16059 589317 8594993 2.75 5.75 3.00 54.5 11.0 5.2

UPB16060 589362 8595070 3.50 5.75 2.25 54.4 11.2 5.0

UPB16061 589406 8595138 3.75 7.25 3.50 52.2 17.3 4.1

UPB16062 589448 8595210 3.25 5.75 2.50 52.4 12.8 6.9

UPB16063 589493 8595272 3.50 6.50 3.00 55.8 9.2 5.9

UPB16064 589534 8595344 3.75 6.00 2.25 56.2 8.7 5.7

UPB16065 589578 8595412 3.50 6.50 3.00 54.4 9.8 7.8

UPB16066 589618 8595479 4.00 7.50 3.50 55.3 9.5 7.3

UPB16067 589653 8595540 4.50 7.25 2.75 54.1 11.2 6.1

UPB16068 589701 8595610 5.00 8.50 3.50 54.6 12.7 5.0

UPB16069 589747 8595683 5.50 8.00 2.50 57.2 8.1 5.9

UPB16070 589788 8595753 6.00 8.25 2.25 54.4 14.0 4.6

UPB16071 589834 8595823 6.50 8.75 2.25 53.6 14.5 4.9

UPB16072 590304 8596274 NSR

UPB16073 590304 8596585 NSR

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UPB16074 590157 8596351 NSR

UPB16075 590075 8596216 7.75 8.25 0.50 50.3 16.4 7.4

UPB16076 589990 8596078 5.75 8.25 2.50 54.5 12.0 4.7

UPB16077 589917 8595954 5.75 8.50 2.75 51.8 16.0 4.8

UPB16078 589755 8595859 7.50 8.75 1.25 53.1 16.1 6.2

UPB16079 589715 8595794 6.00 8.75 2.75 53.2 15.2 5.2

UPB16080 589674 8595727 6.00 9.25 3.25 55.9 9.3 5.6

UPB16081 589632 8595662 6.00 8.50 2.50 53.7 12.7 4.9

UPB16082 589593 8595590 5.50 8.00 2.50 55.1 13.7 3.1

UPB16083 589550 8595518 5.50 8.50 3.00 56.4 9.2 5.0

UPB16084 589502 8595454 5.25 8.25 3.00 56.2 9.2 5.9

UPB16085 589466 8595384 4.50 8.50 4.00 55.5 11.1 6.3

UPB16086 589422 8595319 5.00 7.50 2.50 53.7 12.9 5.9

UPB16087 589381 8595251 4.50 7.00 2.50 54.5 11.1 6.0

UPB16088 589338 8595181 4.25 7.25 3.00 56.1 8.7 6.4

UPB16089 589297 8595109 4.00 7.50 3.50 55.9 10.8 5.1

UPB16090 589254 8595047 3.75 6.25 2.50 56.3 11.2 4.8

UPB16091 589191 8595086 4.50 8.00 3.50 54.8 9.9 5.8

UPB16092 589224 8595155 5.00 8.50 3.50 55.8 8.4 5.6

UPB16093 589311 8595288 5.25 8.75 3.50 54.6 9.8 6.6

UPB16094 589356 8595367 5.25 8.75 3.50 55.5 9.5 5.7

UPB16095 589395 8595428 5.50 8.25 2.75 53.6 13.4 4.3

UPB16096 589484 8595563 5.75 8.00 2.25 52.5 16.8 3.8

UPB16097 589527 8595632 6.25 9.25 3.00 53.0 15.1 4.1

UPB16098 589565 8595700 6.00 9.00 3.00 55.5 9.1 5.2

UPB16099 589653 8595833 6.50 7.50 1.00 54.4 15.4 5.5

UPB16100 589696 8595901 8.00 9.00 1.00 50.2 18.6 5.2

UPB16101 589847 8596142 6.50 9.50 3.00 55.2 9.1 5.0

UPB16102 590021 8596408 NSR

UPB16103 589623 8595944 7.00 9.50 2.50 51.4 16.4 5.2

UPB16104 589583 8595883 7.00 9.75 2.75 52.1 13.9 6.0

UPB16105 589540 8595802 7.00 10.00 3.00 54.1 13.6 4.6

UPB16106 589497 8595743 6.75 9.25 2.50 53.1 13.2 5.6

UPB16107 589455 8595674 6.75 8.25 1.50 51.0 16.3 4.7

UPB16108 589413 8595604 5.75 8.25 2.50 55.1 10.0 5.4

UPB16109 589368 8595539 6.25 9.75 3.50 54.7 12.6 3.9

UPB16110 589330 8595467 6.00 9.25 3.25 54.9 11.5 4.9

UPB16111 589284 8595397 6.00 7.75 1.75 54.3 15.0 3.1

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UPB16112 589245 8595327 6.25 8.50 2.25 54.0 12.2 5.2

UPB16113 589206 8595271 6.00 9.25 3.25 54.3 11.5 5.9

UPB16114 589162 8595198 5.25 8.25 3.00 55.9 11.0 5.8

UPB16115 589112 8595134 6.00 8.50 2.50 52.9 14.7 6.4

UPB16116 589047 8595163 6.00 8.50 2.50 57.2 8.2 6.6

UPB16117 589102 8595237 6.00 8.75 2.75 55.6 11.5 5.2

UPB16118 589137 8595306 6.25 9.00 2.75 50.8 20.0 4.1

UPB16119 589180 8595375 5.50 8.00 2.50 56.5 10.8 4.7

UPB16120 589216 8595432 5.75 9.00 3.25 56.3 8.2 5.0

UPB16121 589269 8595513 5.75 8.25 2.50 54.3 10.3 5.9

UPB16122 589309 8595579 5.75 8.00 2.25 54.2 11.5 5.2

UPB16123 589350 8595653 6.00 8.25 2.25 56.3 9.4 5.6

UPB16124 589370 8595703 6.50 9.00 2.50 52.0 14.7 6.3

UPB16125 589431 8595782 7.00 8.50 1.50 52.5 15.9 3.7

UPB16126 589484 8595853 6.50 7.50 1.00 49.1 20.5 5.1

UPB16127 589525 8595923 6.75 9.00 2.25 53.2 13.1 5.0

UPB16128 589544 8595991 7.00 8.25 1.25 50.3 16.2 6.1

UPB16129 589622 8596093 6.00 8.75 2.75 52.3 13.8 5.3

UPB16130 589720 8596243 7.00 8.00 1.00 53.7 7.9 8.0

UPB16131 589796 8596374 NSR

UPB16132 589877 8596505 NSR

UPB16133 589579 8596322 NSR

UPB16134 589426 8596065 8.50 10.00 1.50 53.4 11.4 5.7

UPB16135 589242 8595778 7.25 8.75 1.50 55.6 7.3 6.5

UPB16136 589017 8594822 5.00 6.75 1.75 54.7 9.2 5.8

UPB16137 588847 8594698 5.50 7.75 2.25 55.5 9.0 5.9

UPB16138 588845 8594542 3.75 5.75 2.00 54.8 10.5 5.5

UPB16139 588709 8594614 5.75 7.75 2.00 56.1 8.2 5.6

UPB16140 588614 8594455 6.00 8.00 2.00 55.1 9.3 5.7

UPB16141 588531 8594341 6.00 8.25 2.25 56.5 7.8 5.8

UPB16142 588449 8594202 7.00 8.00 1.00 54.1 12.6 5.7

UPB16143 588364 8594060 7.00 8.00 1.00 52.7 12.2 6.7

UPB16144 588492 8593977 5.75 7.00 1.25 54.0 12.0 6.1

UPB16145 588677 8594276 4.50 6.00 1.50 53.1 13.6 5.9

UPB16146 589233 8594871 3.00 6.00 3.00 55.8 10.0 4.8

UPB16147 589151 8594734 3.75 6.00 2.25 53.4 11.5 6.6

UPB16148 589061 8594595 2.75 5.25 2.50 52.1 15.2 6.0

UPB16149 588981 8594464 3.50 5.75 2.25 53.9 12.6 5.6

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UPB16150 588889 8594319 3.50 5.00 1.50 52.8 13.1 5.7

UPB16151 588809 8594194 3.50 5.00 1.50 53.3 12.8 5.9

UPB16152 588732 8594052 5.00 5.75 0.75 51.8 13.5 6.5

UPB16153 588644 8593912 5.00 6.75 1.75 55.1 12.7 9.0

UPB16154 588552 8593766 4.50 6.00 1.50 57.7 10.7 7.6

UPB16155 588623 8593547 5.00 5.75 0.75 53.4 12.7 8.9

UPB16156 588385 8593487 7.00 8.00 1.00 52.2 10.6 9.6

UPB16157 588676 8593338 5.00 5.50 0.50 46.4 12.9 19.2

UPB16158 588466 8593260 6.50 7.75 1.25 51.2 15.3 7.6

UPB16159 588790 8593828 NSR

UPB16160 588957 8594100 5.00 5.75 0.75 52.8 17.0 5.9

UPB16161 589117 8594378 5.25 6.00 0.75 51.2 18.3 6.4

UPB16162 589295 8594643 3.00 5.00 2.00 54.2 13.8 5.9

UPB16163 589089 8594016 6.00 7.25 1.25 51.2 17.9 10.1

UPB16164 589000 8593879 6.00 6.25 0.25 50.6 19.3 7.4

UPB16165 588923 8593744 NSR

UPB16166 588840 8593609 NSR

UPB16167 589577 8595737 6.50 9.00 2.50 54.7 10.8 5.1

UPB16168 589570 8595717 6.50 9.00 2.50 54.7 12.2 3.7

UPB16169 589565 8595701 6.00 9.00 3.00 54.6 13.2 4.3

UPB16170 589557 8595679 6.00 9.00 3.00 54.7 11.2 5.2

UPB16171 589543 8595662 6.00 9.50 3.50 56.3 8.3 5.5

UPB16172 589476 8594946 2.50 5.50 3.00 55.7 8.5 5.6

UPB16173 589490 8594965 3.00 5.00 2.00 52.5 14.3 5.5

UPB16174 589501 8594984 3.00 5.25 2.25 53.3 12.4 5.8

UPB16175 589506 8594997 3.75 5.50 1.75 50.0 18.6 5.8

NSR – No Significant Result at the 48% Al2O3 cut-off

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Appendix B - JORC CODE, 2012 EDITION – TABLE 1 DESCRIPTIONS Section 1 Sampling Techniques and Data

Criteria JORC Code explanation Commentary

Sampling techniques

Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

Aspects of the determination of mineralisation that are Material to the Public Report.

In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

Reverse Circulation aircore drill hole samples

representing 0.25 m intervals were collected in

plastic bags through a cyclone mounted on the drill

rig. The entire sample was collected to ensure full

representivity of the drilled material. All samples

were geologically logged at the time of drilling to

determine 1) the type of bauxite material,

2) which samples to composite over 0.5 m intervals,

3) which samples to retain for analysis and

4). when to stop the hole.

Samples were collected as individual 0.25m samples

or composited over successive 0.5m intervals where

the logged material was geologically similar.

Samples that contained pisolites in significant

volume were logged as bauxitic and submitted for

analysis. These samples were sealed in plastic bags

and placed in polywoven sacks for dispatch to the

laboratory.

A small representative sub-sample (approx. 50 g)

was collected for each 0.25 m interval and stored in

a plastic sample tray for future reference.

Sonic drill hole samples were captured in the core

barrel as the hole advanced and then transferred

into plastic sleeves on completion of each run. The

entire sample was collected and geologically logged.

Drilling techniques

Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

Drilling was carried out by Wallis Drilling Pty Ltd

using a Wallis Mantis 80 reverse circulation Aircore

drill rig mounted on a 6x6 Toyota. Shallow (up to 10

m) vertical aircore holes were drilled using HQ rods

and an HQ aircore drill bit with a hole diameter of

103 mm.

A program of Sonic drilling to collect samples for

bulk density measurements was carried out in

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September 2016 by Groundwave Drilling Services Pty

Ltd using a using a track mounted Boart Longyear

Sonic Delta Base DB320 rig. Shallow (up to 9.0 m)

vertical sonic drill holes were drilled using a

123.5mm outside diameter drill bit.

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

Reverse Circulation aircore drilling was used due to

its proven reliability in producing good

representative sample recoveries across accurate

sample intervals.

To ensure representivity of the material being drilled

the entire sample was collected for each 0.25 m

interval of the drill hole.

Sonic drilling was used to collect samples for bulk

density measurements as it is a recognised method

for full recovery of intact and continuous samples

that can be used to determine volumes and

densities.

Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

The total length and percentage of the relevant intersections logged.

All drilled intervals were logged by a competent

geologist at 0.25 m intervals. The logging was

undertaken in a qualitative manner and focussed on

documenting the amount and nature of the

overburden, the pisolitic intervals and the floor of

mineralisation. The bauxitic horizons were defined by

the presence of pisolites and the absence of

ironstone and/or clays.

Logging included visual estimates of pisolitic bauxite

concentration and pisolite size and nature.

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Quality control procedures adopted for all sub-sampling stages to maximize representivity of samples.

No sub-sampling of material was undertaken at the

time of collection. The entire sample was collected

over each 0.25 m interval directly from the cyclone

on the drill rig. Sample weights were on average

between 2 and 3 kg for each 0.25 m sample and 4

to 6 kg for the composited 0.5 m samples.

The 2014 samples were dispatched to the sample

preparation facility at the ALS laboratory located in

Virginia, Brisbane and the 2016 samples were

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Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

Whether sample sizes are appropriate to the grain size of the material being sampled.

processed at the ALS laboratory in Townsville.

In 2014 washed screened samples were undertaken

initially followed by whole rock analyses. This was

discontinued in 2016 with all sampling focused on

whole rock analyses for Direct Shipping Bauxite

(DSB).

Selective sampling of the contiguous bauxite

intervals was undertaken based on geological

logging.

Samples were prepared by :

weighing before and after drying to obtain

moisture loss

the sample was dried at 105oC and then riffle-

split to provide a representative sub-sample

which was pulverised to a nominal 85% passing

below 75 microns;

50g fractions were split off for total oxide

analysis and the residue retained.

This preparation is regarded as being appropriate for

bauxite analyses.

The sonic samples were weighed, dried at 105oC and

weighed again at ALS Townsville to calculate the in-

situ moisture content in order to calculate an in-situ

density for the bauxite.

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

Sample analyses were undertaken by ALS laboratory

at its Stafford facility in Brisbane.

The analytical methods applied to the pulverised

sample were as follows:

Total oxides by XRF (ALS code ME-XRF13n) for

Al2O3, BaO, CaO, Cr2O3, Fe2O3, K2O, MgO, MnO,

Na2O, P2O5, SO3, SiO2, SrO, TiO2, V2O5, Zn, ZrO2;

and

H2O/LOI by TGA furnace (ALS code ME-GRA05)

Available Alumina (ALS code Al-LICP01)

Reactive Silica (ALS code Si-LICP01)

No field duplicate samples were collected because

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the total sample was collected for analysis. In 2016, 1

in 50 samples had coarse split duplicates taken at

the laboratory which were subsequently assayed to

provide duplicate information.

Two standard bauxite reference samples were

sourced from Geostats Pty Ltd in Perth. The bauxite

reference samples were relabelled and renumbered

prior to being provided to ALS to insert in each

batch at a ratio of 1 standard in every 30 samples in

2014 and 1 of each standard included per assay

batch in 2016. Results of the analysis of the

standards were all within one standard deviation of

the certified values.

In addition the laboratory undertook Quality Control

measures with one in every 12 samples analysed in

duplicate. Several laboratory standards and one

blank were run with each sample batch and the

results reported.

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

The use of twinned holes.

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

Discuss any adjustment to assay data.

There are no public domain reports describing

drilling for bauxite on the property. All drilling was

completed in one phase in November 2014 with

follow-up drilling in August 2016 which resulted in a

similar tenor of mineralisation.

Four twin aircore drill holes were completed in 2014,

though only one has paired assays. Two additional

twin holes were completed at Area A in 2016 along

with two short close spaced 20 m sections lines.

All sonic holes twinned 2014 aircore resource

drilling, 8 of these have assays results providing

additional twin hole comparisons.

ALS provided the analytical data in csv and pdf

format. Field geology logs were manually merged

with assay result in Excel for initial geological review.

For the resource estimate the assay, geology and

survey data were all imported into an Access

database, merged and cross checked.

The data has not been adjusted other than the

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management of below detection limit assay values.

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Specification of the grid system used.

Quality and adequacy of topographic control.

Drill collars were initially located during drilling by a

hand held Garmin GPS considered to have an

accuracy of ±5 m. A licenced surveyor surveyed 75

of the 81 drill holes in 2014 and all holes in 2016.

The grid system used was MGA GDA94 Zone 54L.

Accurate LiDar topography was flown over the

project area in 2016. This was consistent with the

2016 collar surveys and confirmed bias issues with

the 2014 collar survey elevations. The 2014 collars

were corrected to the LiDar survey. There are no

concerns with the 2014 survey easting and northing

coordinates as the bias issues were confined to

elevation datum.

Topography used available collar surveys and

beyond that the LiDar data recalibrated to local

controls.

Data spacing and distribution

Data spacing for reporting of Exploration Results.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

Whether sample compositing has been applied.

In 2014 initial drilling at Areas A and B included 85

holes drilled on a nominal 320 m regular grid. In

2016 infill drilling at Area A has been on 80 m and

160 regular grid patterns (Refer to Figure 2). There is

some additional twin and 20 m spaced drilling to

help demonstrate short range continuity.

Infill drilling has confirmed the original results at

Area A and extended the mineralization in places.

The Mineral Resource Classification reflects the

improvement in confidence in the continuity of the

mineralisation. Continuity of the bauxite horizon is

confirmed with the infill drilling and the addition of

more accurate LiDar topographic control has

indicated greater consistency in the horizontal

elevation of the bauxite profile.

Samples were collected as individual 0.25 m samples

or composited into 0.5 m intervals where the

geology was similar. No additional compositing of

samples was undertaken.

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Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

If the relationship between the drilling orientation and the orientation of key mineralized structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

The mineralisation is regarded as horizontal due to

the tabular nature of the style of deposit as

demonstrated elsewhere on the Weipa Plateau. All

drill holes were less than or equal to 15 m in length,

vertical and intersected the mineralisation at an

approximate 900 angle with all intercepts regarded

as having True Width. Considering the deposit type

the sampling has shown the presence of broad

zones of continuity of mineralisation in an unbiased

manner.

Sample security

The measures taken to ensure sample security.

The samples were collected in large plastic sample

bags on site which were secured using cable ties and

bagged into white polywoven sacks and stored on

shrink-wrapped pallets (2014) or bulka-bags (2016)

for shipment. It is considered that due to the nature

and the value of the bauxite mineralisation potential,

security interference was extremely remote.

Audits or reviews

The results of any audits or reviews of sampling techniques and data.

No independent audits of the drilling and sampling

have been undertaken other than the desktop review

of the sonic drilling and density measurement

procedure by Xstract Mining Consultants Pty Ltd.

Section 2 Reporting of Exploration Results


Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

Urquhart Point EPM15268 is located some 5 km

southwest of the township of Weipa on the western

side of Cape York. EPM 15268 is currently held 50%

by Oresome Australia Pty Ltd (a 100% owned

subsidiary of Metallica Minerals Limited), and 50% by

its Joint Venture Partner Ozore Resources Pty Ltd.

A mining lease application (MLA 100044) is in

progress.

There is an exploration access agreement with the

local Indigenous Groups represented by the Wik and

Wik Way. The area is covered by the Cape York

Regional Plan (CYRP).

EPM15268 is unaffected by the current CYRP and the

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tenement is in good standing.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

An appraisal has been undertaken on previous

exploration for bauxite. Although some widespread

sampling had taken place, there was no evidence of

previous systematic, grid-based drilling. Oresome

undertook a maiden auger drilling and sampling

program within the tenement in 2014 (Refer ASX

Release dated 11 July 2014) and announced a

Maiden Mineral Resource following the initial drilling

program (Refer ASX Release dated 11 May 2015)

Geology Deposit type, geological setting and style of mineralization.

The deposit type is bauxite laterite derived from the

tropical to sub-tropical weathering of aluminous

sediments.

Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

easting and northing of the drill hole collar

elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar

dip and azimuth of the hole

down hole length and interception depth

hole length.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

A total of 85 vertical air-core drill holes were

completed in November 2014 in two areas at

roughly 320 m spacing. Follow-up drilling at only

Area A in 2016 included 175 infill and extension drill

holes at 80 and 160 m spacing, see Figure 2.

Area A contains 198 drill holes for 1609.5 m, with a

8.1 m average depth

Area B contains 63 drill holes for 304.7 m, with a 4.9

m average depth

Both areas are relatively flat and low lying with

collars between 2.5 and 13 m RL and the drill holes

between 3 and 15 m in total depth.

A limited number of sonic drill holes (~15% of all

samples) had DSB total oxide analyses available for

the bulk density assessment. These assays were not

available at the time of the Mineral Resource

estimate. The sonic drilling twins existing resource

drill holes. The twin hole assays were assessed and

raised no concerns. Exclusion of the sonic holes

should not be material to the Mineral Resource

estimate.

Data aggregation

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of

Samples that were composited to 0.5 for assaying

were split to 0.25 m to ensure 0.25 m sample

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methods high grades) and cut-off grades are usually Material and should be stated.

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

resolution at the domain boundaries was not lost

prior to estimation.

For each drill hole, bauxite intervals were selected for

DSB analysis using a threshold of ≥48% total Al2O3

and ≤20% total SiO2 and considering AAl and

logging. Other bauxite samples were constrained in

upper and lower transition zones.

All samples had an equal length weight basis of 0.25

m. No upper cut-off grades were applied.

Relationship between mineralization widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results.

If the geometry of the mineralization with respect to the drill hole angle is known, its nature should be reported.

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).

The mineralisation is regarded as horizontal due to

the tabular nature of the style of deposit and

because the holes are shallow (up to 10 m in

length), drill hole deviation would be minimal and

therefore the holes are considered vertical with all

intercepts representing True Width.

Down hole depths are considered as True Widths.

Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Refer to Figures 2 through 7

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

Exploration results were previously released in

Metallica ASX announcements dated 21 Jan 2015

and 3 Feb 2015 for initial drilling results. Appendix A

includes a summary of the drilling and principal

bauxite domain DSB intervals completed by Aircore

in 2016.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics;

The drilled area was identified due to its recognised

proximity to known bauxite deposits within the

adjoining Rio Tinto ML, desk-top mapping of

potential bauxite plateau features in satellite image

studies and encouraging results from limited hand

auger drilling completed in 2014. Refer ASX Release

dated 11 July 2014.

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potential deleterious or contaminating substances.

Oresome have completed 13 water bores for the

purpose of water monitoring. These have no assays

and do not contribute directly to the Mineral

Resource estimate.

Further work

The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Further work will include mining and environmental

assessments. In due course the less well defined

mineralisation at Area B will require further definition

and the development potential between Areas A and

B will be investigated.

Section 3 Estimation and Reporting of Mineral Resources


Database integrity

Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

Data validation procedures used.

The assay data were compiled directly from original

survey and laboratory assay data files. Assays were

matched to the logging data using the sample

number. Cross checking all samples were matched

allowed correction of some minor typographic errors.

Site visits Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

If no site visits have been undertaken indicate why this is the case.

John Cameron an independent geologist supervised

all drilling during November 2014 and August -

September 2016.

Geological interpretation

Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.

Nature of the data used and of any assumptions made.

The effect, if any, of alternative interpretations on Mineral Resource estimation.

The use of geology in guiding and controlling Mineral Resource estimation.

The factors affecting continuity both of grade and geology.

The pisolitic bauxite horizon is easily identified in

aircore drilling and can be used to identify all

intervals requiring sampling. Assaying has confirmed

the logging. The bauxite horizon shows evidence of

being cut by an unconformity in places with the

occurrence of sands and in some places transported

bauxite. Nonetheless the bauxite horizon is relatively

consistent and shows some evidence of following

the small topography variations. The drilling has

indicated a continuous bauxite horizon with thinner

or low grade zones attributed to regional variations

and possible erosion zones.

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Dimensions The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.

Area A is defined by a combination of 160 m and 80

m spaced drilling. The resource area covers 3.0 km2.

Though sandwiched between the coast line and the

tenement boundary there is still scope to extend the

resource area to the south. Area A is relatively well

defined with higher grade and more consistent

mineralisation in most drill holes

Area B is defined by six lines of 320 m spaced

drilling. The resource area covers 5.1 km2. Though

this area is larger and broader the bauxite horizon is

weak towards the northern end and also at the

southern extremity. There is less scope to extend the

resource area but variations within the defined area

are likely. Area B is generally lower grade and would

benefit from upgrading or selective mining.

At Area A where present the main bauxite zone is on

average 1.8 m thick and accompanied by 0.6 m of

transitional lower grade bauxite. This is overlain by

an average of 4.7 m of sandy overburden. Area A

displays a near horizontal geometry with reasonably

consistent thickness between neighbouring drill

holes.

Area B is higher in absolute elevation and less

consistent in occurrence of high grade bauxite.

Where present the main bauxite zone is on average

0.7 m thick, has 0.9 m of transitional lower grade

bauxite and 2.4 m of sandy overburden.

Estimation and modelling techniques

The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

The availability of check estimates, previous estimates and/or mine

Estimation of 40 x 40 x 0.25 m blocks was

undertaken for the bauxite horizon as defined by the

geological logging and DSB grades using Ordinary

Kriging estimation method. A restrictive vertical

search limiting samples to only 0.75 m per drill hole

is used to avoid over smoothing in the vertical

direction. Dynamic anisotropy is used to assist the

estimation following the geology variations that are

similar to the local topography undulations.

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production records and whether the Mineral Resource estimate takes appropriate account of such data.

The assumptions made regarding recovery of by-products.

Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation).

In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

Any assumptions behind modelling of selective mining units.

Any assumptions about correlation between variables.

Description of how the geological interpretation was used to control the resource estimates.

Discussion of basis for using or not using grade cutting or capping.

The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.

Estimation included:

Whole rock (DSB) assays including Al2O3 and

SiO2

Moisture content

Wet screened yield and related coarse fraction

Al2O3 and SiO2

Whole rock metallurgical digest at low

temperature reactive silica and available alumina

A fine vertical definition in the model is maintained

to allow mining interval selection and option

analysis.

Grade cutting was not used as there were not outlier

values evident and the grades were major rock

elements and not positively skewed.

The model results were assessed visually and

compared to statistical means.

Moisture Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

All tonnages are estimated on a dry basis and

moisture factors need to be applied for mining

analysis. Moisture of drill hole samples is ~12% and

the bauxite zone is in areas below the water table.

Cut-off parameters

The basis of the adopted cut-off grade(s) or quality parameters applied.

The results model is constructed in a manner

suitable for assessing a range of cut-off scenarios.

For this resource statement a cut-off of 48% Al2O3

for whole rock grade is considered reasonable for

providing an indication of potential DSB operation.

Screen test results indicate the resource could be

wet screen upgraded as is commonly done

elsewhere on Cape York. Additional lower grade

resource will be available if wet screening is

considered at a later stage.

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Alternatively the data indicate that dry-screening

may be an appropriate beneficiation option subject

to some further test work.

Mining factors or assumptions

Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

No width criteria is applied for the Resource

reporting. However sampling was not undertaken on

intervals less than 0.25 m. Bauxite horizon sample

intervals range from 0.5 m to 4 m and average 1.8 m

at Area A and 0.7 m at Area B.

Overburden to the bauxite horizon varies from 0.5 m

to 9.5 m and averages 4.7 m at Area A and 2.4 m at

Area B.

The resource presents as a flat tabular zone that

should be able to be mined with industry standard

practices and open pit mining.

Bauxite and overburden are largely unconsolidated

with only minor areas of cementation or hard

ground encountered during drilling.

Metallurgical factors or assumptions

The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

Available alumina and reactive silica has been

completed for Area A and is included in the DSB

whole rock estimates. Only estimated grades partially

based on regression assigns are used to inform Area

B and the transitional domains.

Environmen-tal factors or assumptions

Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a

Initially some out of pit dumping will be required

but continuous mining in strips will allow progressive

backfill and rehabilitation. This process is typical for

Cape York bauxite operations and no additional

environmental processes are known other than the

potential limitation near coastal areas.

Extrapolation of the Mineral Resource is limited to

the coastal breakaway zone even though there are

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greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.

indications the buried bauxite horizon may continue

to the shoreline. An environmental buffer zone may

be required that may reduce the available Mineral

Resource for conversion to Ore Reserves. This mostly

affects Inferred Mineral Resource Areas.

Bulk density Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.

Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.

The initial drilling program was completed in

November 2014 and at that stage no testing for

density was completed.

In 2016 bulk density was estimated from 206

samples collected from 23 sonic drill holes located

across Area A and Area B. The drilling, sampling and

measurement methodology have been

independently reviewed and the density values

derived from the measured volume and an assumed

swell factor of 5%.

The bauxite is covered by thick overburden in all

areas and presents no outcrop or shallow subcrop

suitable for test pit density measurements.

Classif-ication

The basis for the classification of the Mineral Resources into varying confidence categories.

Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

Whether the result appropriately reflects the Competent Person’s view of the deposit.

Blocks are classified based on drill hole spacing with

Inferred defined by 320 m grid spacing

Indicated defined by 160 m grid spacing

Measured defined by 80 m grid spacing

Extrapolation beyond the spacing was limited to half

the nominal spacing.

This approach is consistent with general practice for

Cape York bauxite projects.

Audits or reviews

The results of any audits or reviews of Mineral Resource estimates.

There has been no external review of the resource

estimate or associated data.

Discussion of relative accuracy/

Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an

Area A is relatively consistent in the bauxite profile

and higher in grade. It presents a higher confidence

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confidence approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.

The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

as a DSB resource as less mining selectivity will be

required.

Area B has a more variable bauxite profile and only

some areas have sufficient grade to present as a DSB

mining target. As a result the area is considered less

accurate.

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SIGNIFCANT INCREASE IN VOLUME AND CATEGORY … · RESOURCE FOR URQUHART BAUXITE PROJECT ......

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Transcript of SIGNIFCANT INCREASE IN VOLUME AND CATEGORY … · RESOURCE FOR URQUHART BAUXITE PROJECT ......