Name of the Project
Urquhart bauxite project.

Location
The project is located on Queensland’s Cape York, in Australia.

Project Owner/s
Cape York HMS & Bauxite Project Joint Venture (JV), which comprises Oresome Australia, a wholly owned subsidiary of Metallica Minerals, and Ozore Resources.

Project Description
An independent prefeasibility study (PFS) has supported the development of the project.

The project consists of two bauxite plateaus – Area A and Area B – both of which are wholly contained within mining licence 100044.

The project has a targeted production rate of 1.5-million tonnes a year, producing 6 532 t/y of saleable product over a 5.5-year mine life.

The proposed mining operations are very simple, with the deposit being mined in 160-m-wide strips, which will start in the lower strip ratio and higher-grade material Area A. Strips will be mined contiguously to allow for short hauls to the nearby mined-out strip for dumping overburden (predominantly sand cover) back in-pit, resulting in the continuous rehabilitating of mined-out areas. The target bauxite horizon ranges in thickness from 0.5 m to 4 m and averages 1.5 m. Overburden thickness varies and is thinnest in the eastern part of Area A, which is scheduled for initial production. In scenarios 1 and 2, there will be no screening of bauxite material. Scenario 3 allows for stockpiling of transitional material.

Potential Job Creation
The JV will have minimal staff on site to manage contractors and the shipping of direct shipping bauxite to clients.

Net Present Value/Internal Rate of Return
The updated PFS estimates a pretax net present value, at a 10% discount rate, of A$47.3-million, on sales of 6.5-million tonnes of Urquhart’s proven and probable reserves. The project has a post-tax internal rate of return of 364%. Payback is estimated at 2.2 years.

Capital Expenditure
The updated PFS has confirmed start-up capital at A$2.2-million.

Planned Start /End Date
The highest-margin bauxite in Area A is slated for first production in 2019.

Latest Developments
Metallica Minerals has failed to access export facilities for its Urquhart bauxite project, which has delayed the start of mining.

Metallica and its JV partner in February this year launched a review of the Urquhart project’s development options, and undertook investigations into access arrangements for a barge-loading facility (BLF) to allow for export of the Urquhart ore.

The investigations included negotiations for a possible priority access to the BLF owned by Green Coast Resources at Hey Point.

However, these negotiations have failed to result in a viable commercial contract that will allow for the JV to use the Hey Point infrastructure during 2019.

While the company remains open to further discussions with Green Coast, a commercial outcome to use Hey Point is unlikely to be successful in the immediate future, the company has said.

“It is disappointing that the commencement of mining operations communicated prior to the election of the new board has now been further delayed. The new board is focused on exporting the bauxite to market in a more secure way,” interim CEO Scott Waddell has said.

“The focus is on developing a logistics option that will maximise returns to shareholders, minimise reliance on third parties and thereby avoid or minimise complications that could threaten the performance of the Urquhart bauxite project.”

The company and its JV partner are continuing to investigate alternative arrangements for shipping the Urquhart product, and initial progress is also being made on studies and designs to build a new BLF that will be controlled by the JV parties, and will likely reduce operating and shipping costs, offsetting the higher up-front capital requirements and time delays.

The results of these studies are expected in the third quarter of this year.

Key Contracts and Suppliers
IMC Mining (updated PFS) and LCR Group (mining and haulage operations at Urquhart).

On Budget and on Time?
Too early to state.

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