Metallica Minerals : Quarterly Report for period ending 31 December 2022

Metallica Minerals Quarterly Report

ASX

RELEASE

31 December 2022

Quarterly Report

17 January 2023

Metallica Minerals is an Australian development company focussed on delivering high purity silica sand to a diversified global customer-base.

ASX: MLM

Metallica Minerals Limited (ASX: MLM) ("Metallica", "the Company") is pleased to present its activities report for the quarterly period ending 31 December 2022.

Directors

Theo Psaros Executive Chairman

Brad Sampson Non-Executive Director

Mark Bojanjac Non-Executive Director

Senior Management

CORPORATE

AS AT 31 DECEMBER 2022

Issued Capital

956,898,922 Ordinary Shares

179,630,557 Listed Options

21,700,000 Unlisted Options

Shareholders

1,535 shareholders

Top 20 shareholders hold 63.4%

Largest Shareholders

Ilwella Pty Ltd - 21.4%

Sibelco Asia Pacific Pty Ltd - 14.4%

SpartagAG - 9.6%

Cash Balance

As at 31/12/2022, MLM's cash balance was approximately $11.1m

Website

metallicaminerals.com.au

A short video presentation on our Cape Flattery Project is available on our website.

Fully Underwritten Rights Issue closes raising

$4.5 million (before costs)

Fully Underwritten placement completed to new and existing shareholders raising $5.1 million

LiDAR completed at the Western Areas Silica Sand Project

6.

$11.1 million in cash is available at quarter end, with no debt

DEVELOPMENT & EXPLORATION CAPE FLATTERY SILICA SANDS

MLM

Interest

100%

The Cape Flattery Silica Project is adjacent to the world-class Cape Flattery Silica Sand mining and shipping operation owned by Mitsubishi.

During the December 2022 quarter, the Company continued to advance the CFS Definitive Feasibility Study, progress the preparation of Environmental applications for Federal and Queensland Government agencies and continue regular stakeholder engagement activities.

Definitive Feasibility Study

The Definitive Feasibility Study (DFS) continues to progress and its planned completion is in Q2 2023.

A number of appointments were made during the quarter by the CFS DFS team.

WAVE International - Non-process Infrastructure WGA - Marine infrastructure

Mineral Tecnhologies - Process Design & Metallurgy studies

Key study areas progressed during the December quarter included further investigation of transhipping operations, transhipping vessel selection and location of key project infrastructure. The DFS remains on track to be completed in Q2 2023.

Environmental Studies

The Company, along with our external environmental consultants, previously reported the completion of the environmental studies at the CFS project. During the December quarter, the extensive preparation of environmental applications were underway.

Concurrently, several pre-lodgment meetings were held with Federal and State environmental departments. The purpose of these pre-lodgment meetings was to inform the departments of the progress of studies and seek feedback on aspects of the upcoming applications.

In late December 2022, the CFS Project was visited by representatives of the Australian Government's Department of Climate Change, the Environment, Energy and Water (CCEEW). The CFS Project

General Manager and internal Environmental Consultant were joined on this visit by leadership of the Walmbaar Aborignal Corporation who represet the Dingaal Clan, one of the traditional landowners on whose land the CFS Project is located.

The lodgement of the Environmental Applications have been delayed and will be lodged in Q1 2023. The Company also plans to lodge a Progressive Rehabilitation and Closure Plan (PRCP) with the Queensland Department of Environment & Science (DES). The PRCP will outline how rehabilitation will be undertaken progressively throughout the life of the project and what work will be undertaken when the project is completed.

Traditional Landowner Update

To date, four meetings have been held with the negotiation representatives of the clans who are the traditional landowners of the planned Mining Lease Application (MLA) area. The Company has met with the Dingaal and Nguurruumungu representatives and their respective legal advisors and the negotiations are continuing.

The Company is now seeking to meet with the new Board of Hopevale Congress Aboriginal Corporation (HCAC), the Trustee landholder for the CFS project area. HCAC had been represented at previous negotiation meetings and with the number of changes to its Directors, discussions are expected to resume in Q1 2023.

In December 2022, Company representatives travelled to Cooktown to host an end of year celebration to acknowledge the strong and positive relationships which have been built throughout the year.

Appointment of GM Commercial

Mr Sam Fisher joined the Company in the December quarter. Sam has held senior commercial roles with BHP and New Hope Corporation. Sam's focus will be the growing interest from potential customers for the CFS Project. He brings significant bulk commodity sales experience to Metallica.

Purpose-built Jetty Development Application

A Development Application (DA) to the Queensland Government is being finalised for approval for the construction of a purpose-built jetty for the CFS Project. Prior to the DA being lodged, the CFS Project will require "Owner's Consent" from the Traditional Landowners. This process of approval is underway.

On 13 September 2022, the Company received a letter from Department of Resources (DoR) clarifiying the approvals pathway for port operations associated with existing or future silica project proposals on Cape York. The letter advises that investigations have not identified an approvals pathway for port operations proposed outside of existing port areas and are subject to the Sustainable Ports Act 2015.

The planned jetty is located within the Cape Flattery Port limit (see Figure 1 below). The Cape Flattery Port is already in operation, loading silica sand onto ships for export and is an area with existing approval for marine operations such as being contemplated by the Company.

The Jetty Development Application (DA) process has required engagement with a number of Queensland Government departments as well as the Hopevale Aboriginal Shire Council and Cook Shire Council. The DA is expected to be lodged in Q1 2023.

Potential Offtake partners

In August 2022, the Company announced it had signed a Memorandum of Understand (MoU) with Mitsui & Co., Limited (Mitsui). Mitsui is one of the largest global trading and investment companies based in Japan.

Metallica is continuing discussions with Mitsui and a number of potential off-take partners and customers. Further visits to the project with interested international customers are currently being planned.

Silica sand samples from the 2021 drilling programs have also been requested and dispatched to prospective offtake partners so they can better evaluate the quality of the silica sand that MLM has at the CFS Project.

Metallurgical Test Work

The next phase of metallurgical studies is underway and will concentrate on the iron content of the silica sand which has a strong bearing on the final product specification. With the optimum silica sand product having a sub 120ppm Fe2O3 content. A total of twelve samples will be submitted to Minerals Technologies for bench top variability testwork.