Name and Location
SCONI Phase 1 project, North Queensland, Australia.

Client
Metallica Minerals.

Project Description
SCONI Phase 1 is designed to be a commercial standalone project as evidenced by the positive economic results from the prefeasibility study (PFS).

The PFS demonstrated the Phase 1 as an economically and technically viable project with considerable upside.

The PFS was based on a high-pressure acid leach processing plant, treating 200 000 t/y of high-grade scandium laterite resource from Metallica’s 100% owned Lucknow deposit.

The deposit has a measured, indicated and inferred resource of 5.7-million tonnes, grading 195 g/t of scandium, 0.23% nickel, 0.06% cobalt, 34.5% iron and 1.1% magnesium.

The project will produce 50 t/y to 65t/y of high-purity (>99.9%) scandia over a 20-year mine life.

The resource will be processed using delivered acid in the initial stages of the operation to construct an acid and power plant after commissioning and ramp-up of the project.

Phase 1 may lead to the development decision for the much larger Phase 2 brownfield expansion at a later date, subject to economic conditions at that time.

It is envisaged that Phase 2 will process 750 000 t/y.

Value
Capital expenditure, excluding contingency, is estimated at A$247-million.

Duration
The project is expected to take two years to complete.

Latest Developments
Metallica has deferred the proposed SCONI definitive feasibility study (DFS) to significantly reduce project, corporate and administration expenditure to preserve cash and maintain its core project assets, including its Weipa heavy mineral sand project.

The company will revisit this decision once it has secured further funding.

However, while the Metallica board has taken this decision to conserve cash, it is continuing to pursue and explore project funding opportunities for the project, which includes indentifying strategic investors.

Most of the work for the SCONI DFS has been completed.

The company has also completed a significant amount of necessary testwork and engineering on the project and will continue to actively progress the permitting of mining leases applications towards their grant.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The project has been deferred until market conditions improve.

Contact Details for Project Information
Metallica Minerals, tel +61 7 3249 3000, fax +61 7 3249 3001 or email admin@metallica.com.au.