Metallica Minerals : Quarterly report for period ending 30 June 2022

Metallica Minerals Quarterly Report

ASX

RELEASE

30 June 2022

Quarterly Report

27 July 2022

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 30 June 2022.

Directors

Theo Psaros Executive Chairman

Brad Sampson Non-Executive Director

Mark Bojanjac Non-Executive Director

Senior Management

Scott Waddell CFO & Company Secretary

Nicholas Villa General Manager,

Cape Flattery Silica Sand Project

CORPORATE

AS AT 30 JUNE 2022

Issued Capital

665,926,366 Ordinary Shares

172,287,835 Listed Options

8,160,000 Unlisted Options

Shareholders

1,465 shareholders

Top 20 shareholders hold 55.4%

Largest Shareholders

Ilwella Pty Ltd - 22.6%

SpartagAG - 9.7%

Dostal Nominees Pty Ltd - 6.1%

Cash Balance

As at 30/06/2022, MLM's cash balance was approximately $5.3m

Website

metallicaminerals.com.au

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

DEVELOPMENT & EXPLORATION CAPE FLATTERY SILICA SANDS

MLM

Interest

100%

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

During the June 2022 quarter, the Company continued to advance through numerous studies, approval processes and stakeholder engagement activities that are all key components of our project development for the Cape Flattery Silica Sand Project.

Definitive Feasibility Study underway

The Definitive Feasibility Study (DFS) is underway and is planned for completion in 2nd Quarter 2023.

Detailed planning for the DFS has been presented to the Board of Metallica and initial work on multiple work streams has commenced.

A Request for Proposal (RFP) has been sent to three

1. potential Definitive Feasbility Study Manager providers with appropriate capability and who have indicated an interest in participating in the DFS. The RFP closed on 22 July 2022.

An RFP has also been sent to nine (9) potential transhipping service providers. A short list of three

(3) potential providers will be interviewed shortly.

Further metallurgical work on a silica sand and iron variability study is underway with results expected in the coming months. This work will feed into the plant design and final product specifications.

Environmental Studies

The Company, along with our external environmental consultants, have completed an array of environmental studies at the CFS project. These studies have included soil sampling, ecological studies and water monitoring.

It is expected that the Environmental Application will be lodged in early Q3 of this year to the Queensland Department of Environment & Science (DES).

In Q3 of 2022, the Company also plans to lodge a Progressive Rehabilitation and Closure Plan (PRCP) with 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. There will be a communication process and a roadshow to representatives of Dingaal and Nguurruumungu clans, local councils and other key stakeholders to inform them of the PRCP and seek feedback accordingly.

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. Negotiations have been delayed somewhat over recent months due to impacts of a number of COVID cases amongst the both the CFS team and residents of Hope Vale.

Importantly, the negotiations have been held in a professional and respectful manner with significant information on the project being shared with the

negotiating parties from each clan.

Metallica Minerals Executive Chairman, Theo Psaros, CFS General Manager Nicholas Villa with Dingaal representatives, Kenneth McLean (Walmbaar Aboriginal Corporation Chairman) and Stanton Thompson (Walmbaar Aboriginal Corporation Director) during recent site visit to TLO land areas

Ports North Memorandum of Understanding

On 13 June 2022 the Company signed a Memorandum of Understanding (MoU) with Ports North, a Queensland Government owned coprporation. The execution of the MoU sets out a pathway for the Cape Flattery Silica project to establish a purpose built jetty within the Port of Cape Flattery.

The key terms of the MoU are:

• CFS to work with Ports North on its intentions to establish a silica sand export project at Cape Flattery
• Optimisation of the CFS Project's potential usage rights of the Port of Cape Flattery
• CFS to provide Ports North with information on the project's progress including all regulatory and traditional landowner approvals

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.

The planned jetty is located within the Cape Flattery Port limit (see Figure 1). 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 process has required engagement with a number of Queensland Government departments as well as the Hope Vale Aboriginal Shire Council and Cook Shire Council. The DA is expected to be lodged in Q3 of this year.

Potential Offtake partners

The Company continues to receive interest in the future production from the silica sand operation. A number of potential buyers with existing large international silica sand markets have contacted the Company to investigate possibilities to procure our planned production. Within these discussions they are seeking to understand the project development timelines and the planned quality of the silica sand