ASX RELEASE

Tuesday 21st February 2012

NORNICO - Lucknow Deposit, Nth Qld Scandium & Nickel-Cobalt Resource Upgrade

Metallica completes exploration phase on NORNICO project, with focus now

on permitting & feasibility studies for the proposed development of the North Queensland project

Major increase in the Lucknow projects Indicated & Measured Scandium Resource to 7.5 Mt @ 156g/t Sc (previously 3.3 Mt @ 176 g/t Sc) using 70 g/t Sc cut-off grade (COG) – see Table 1

Shallow Resource, mostly at or near surface <20m (35m max depth)

Lucknow Scandium Resource dimensions - approximately 1.2 km in length by 350 m average width & 20 m thickness - includes a well-defined high grade Indicated & Measured Resource of 4.03 Mt @ 204 g/t Sc, (using 130g/t Sc COG)

Boosts total NORNICO scandium resource (Lucknow & Kokomo) to 16.8 Mt @ 130 g/t Sc (using 70g/t Sc COG) containing approximately 3,250t scandium oxide (Sc2O3) – see Table 4

Increase in the Lucknow projects Indicated & Measured Ni-Co Resource estimate to 3.2 Mt @ 0.57% Ni, 0.19% Co & 85 g/t Sc – see Table 2

Lucknow Ni-Co & Sc resource incorporates data from 461 RC holes, predominantly drilled on a 40 m by 40 m drill pattern totalling 10,554 m

Australian resource development company, Metallica Minerals Limited (ASX:MLM) is pleased to announce a major increase in its Indicated and Measured Resource estimates for the Lucknow laterite deposit within the NORNICO nickel-cobalt-scandium project in North Queensland. The Lucknow nickel-cobalt-scandium deposit (one of NORNICO’s five main deposits) is located 3 km southwest of the township of Greenvale, 200 km northwest of Townsville and approximately 6 km south southeast of the historic Greenvale nickel mine. The resource increase announced today follows the completion of the extensive exploration phase for the NORNICO project and enables Metallica to hasten permitting, mining and detailed feasibility studies aimed at first production in 2015. The Lucknow Ni-Co-Sc laterite is located on a fault bounded ultramafic unit with a general northeast structural trend and is represented by a lateritic plateau approximately 4.5 km long by 0.5 km wide. The Lucknow laterite deposit has formed on ultramafic basement units of predominantly gabbro, dunite or pyroxenite composition. The Lucknow scandium and nickel-cobalt resource occurs as shallow wide zones of enrichment within the oxidised, weathered or laterite profile – see drill sections with block model resource outlines in Figures 3-6. The location of the Mineral Resources and simplified regional geology of the Lucknow Sc-Ni-Co and Greenvale Ni-Co deposits are shown in Figure 1. The combined Indicated and measured resource for the Lucknow Sc laterite deposit stands at 7.5 Mt @ 156 g/t Sc, at a 70 g/t COG, including a higher grade Indicated and Measured Resource zone of 4.03 Mt @ 204 g/t Sc, using a 130g/t Sc COG.

A breakdown of the resource categories for Lucknow is included in Table 1 & 2, Figure 2 depicts the outline of the scandium resource and the location of the various resource categories with respect to the drilling at Lucknow. Figure 1: Location of the Lucknow and Greenvale resources and associated regional geology

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Figure 2: Lucknow Scandium & Ni-Co Resource Classification Outlines

Metallica commissioned Golder Associates of Brisbane to undertake an updated block model estimate for the Lucknow scandium and nickel-cobalt resource using new data provided by Metallica from its recently completed drill program comprising an additional 163 holes (see summary of drilling results in December Quarterly Report, 31 January 2012 – Appendix 2).

The new resource was estimated by using data from 461 reverse circulation (RC) drill holes comprising 10,554 m of drilling. The resource has been drilled out on either a 20 m (N-S) by 20 m (E-W) grid (Measured Resource) or a nominal 40 m (North-South) by 40 m (East-West) grid which is sufficient to classify the resource as Indicated. In some areas where the drilling has been completed on an 80 m (North-South) by a 40 m (East-West) grid, the resource has been classified as Inferred (see Figure 2).

The nickel-cobalt and Sc mineralisation are often separate but also overlap. To avoid any duplication in the resource statements the Lucknow resource is separated into two exclusive parts; a scandium resource (Table 1) and a nickel-cobalt and scandium resource (Table 2). Nickel-cobalt is reported first such that about 40% of the Lucknow nickel-cobalt Resource in Table 2 is also above the 70g/t Sc cut-off grade.

Table 1: Sc Mineral Resource (70g/t Sc COG), excluding Ni-Co Resource in Table 2 Classification Mt Sc (g/t) Ni (%) Co (%) Fe (%) Mg (%)

Measured 0.6 190 0.17 0.02 31.7 1.7

Indicated 6.9 153 0.16 0.02 36.4 1.0

Inferred 0.3 99 0.14 0.02 32.6 0.7

Indicated & Meas. 7.5 156 0.16 0.02 36.0 1.0

M+Ind+Inf Total 7.8 154 0.16 0.02 35.9 1.0

The Lucknow nickel-cobalt resource presented in Table 2 excludes the scandium Resource in Table 1 and has been reported using a 0.7% NiEq (Ni + 2 x Co) cut-off grade. Table 2: Ni-Co Mineral Resource (0.7% NiEq* COG), excluding Sc Resource in Table 1

Classification Mt Ni (%) Co (%) Sc (g/t) Fe (%) Mg (%)

Measured 0.9 0.65 0.17 66 24.5 2.2

Indicated 2.3 0.54 0.20 104 23.6 2.1

Inferred 0.4 0.60 0.13 18 28.8 2.0

Indicated & Meas. 3.2 0.57 0.19 85 24.4 2.1

M+Ind+Inf Total 3.6 0.57 0.19 85 24.4 2.1

*Nickel Equivalent NiEq = Ni + 2 x Co. Scandium (Sc) has not been used in the NiEq equation.

Grade tonnage data relating to the Lucknow Scandium resource is presented in Table 3 below, excluding nickel cobalt resource in Table 2.

Table 3: Lucknow Scandium Resource – Grade Tonnage Data Cut-off Sc (g/t) Mt Sc (g/t) Ni (%) Co (%)

70 7.81 154 0.16 0.02

80 7.43 159 0.16 0.02

90 6.76 166 0.16 0.02

100 6.02 174 0.16 0.02

110 5.32 184 0.16 0.02

120 4.65 193 0.16 0.02

130 4.04 204 0.16 0.02

140 3.51 214 0.16 0.02

150 3.04 225 0.16 0.02

160 2.66 235 0.16 0.02

Using a 70 g/t Sc COG the NORNICO (combined Lucknow and Kokomo) Measured, Indicated and Inferred Mineral scandium Resource now stands at 16.8 Mt @ 130g/t Sc, and the Indicated and Measured component stands at 12.0 Mt @ 145g/t Sc - see Table 4. Previous resource statements for Lucknow reported scandium and nickel-cobalt resource on the basis of a joint venture agreement that is no longer relevant now Metallica own 100% of the mineral rights.

A simpler reporting process is now applied for future development concentration on the definition of nickel-cobalt resource, some of which still contains high scandium. As a result some resources previously stated as scandium is now reported as nickel-cobalt resource. Metallica will revise all other NORNICO resources on a similar basis in the near future. Table 4: Combined Lucknow & Kokomo Scandium Resource (Using a 70g/t Sc COG)

Classification Mt Sc (g/t) Ni (%) Co (%) Fe (%) Mg (%)

Lucknow

Measured 0.6 190 0.17 0.02 31.7 1.7

Indicated 6.9 153 0.16 0.02 36.4 1.0

Inferred 0.3 99 0.14 0.02 32.6 0.7

Kokomo

Measured 0.7 154 0.22 0.03 36.0 0.6

Indicated 3.8 121 0.32 0.05 29.0 2.1

Inferred 4.4 91 0.18 0.02 13.0 6.0

Total 16.8 130 0.20 0.03 28.5 2.6

The Mineral Resources detailed above are appropriate for a selective open pit mining scenario, but does not account for the mining dilution or losses and conforms to JORC guidelines for the reporting of Mineral Resources. The resources have been classed as Measured, Indicated or Inferred, based on geological continuity, sample intervals and drill hole spacing. The Measured and Indicated resources are sufficient for initial pit design and scheduling. The high grade scandium mineralisation at Lucknow is contained within highly oxidised and weathered red-brown lateritic material and in many areas the mineralisation starts at surface, to a maximum depth of 35 m with majority within 20 m of surface. Where the scandium is associated with higher grade nickel-cobalt grades, it usually occurs above them in the laterite profile. However the scandium mineralisation is predominantly associated with low grade nickel and cobalt mineralisation which is possibly a reflection of the pre-cursor ultra-mafic unit on which the laterite formed. Drilling at Lucknow and Kokomo has defined 16.8 Mt of scandium resource averaging 130 g/t Sc, containing approximately 2,170t of scandium metal or 3,250t of scandium oxide. Within the scandium laterite mineralisation, there are well defined, higher grade scandium zones, which include drill intercepts of up to 27 m at 882 g/t scandium from surface at Lucknow and up to 37 m averaging 436 g/t scandium at Kokomo, being obvious early mining targets in future development. The dimensions of the main body of the Lucknow Sc-Ni-Co resource (Figure 1 & 2) are approximately 1.2 km long, 0.35 km wide and 20 m average thickness. Most often the high grade portions of the scandium resource are situated near or at surface and as a result mining is expected to be a relatively simple exercise. Typical cross sections through the Lucknow Scandium resource are shown in Figures 3 to 6 with the location of the section lines shown in Figure 2.

Resource Estimate Methodology The Lucknow resource estimate was undertaken by Golder Associates of Brisbane using block modelling Ordinary Kriging (OK) techniques. The estimate was completed using unfolding techniques to make a wire framed model to represent the palaeo-laterite surfaces between drill holes, and was further refined by incorporating data from sectional interpretations of the considered logged geology and scandium, nickel, cobalt, iron, magnesium and manganese assays. A normal 60 g/t Sc mineralised envelope was used to constrain the mineralisation and grade estimates. The wireframe was then filled with 10 m by 10 m by 1 m blocks, with the grades of the various elements estimated by ordinary kriging using a three pass search strategy and a maximum of 3 composites selected from any one drill hole. Mineralisation was extrapolated to a maximum of 20 m from drill hole intercepts, depending on supporting information.

For further information please contact: Mr Andrew Gillies, Managing Director Ph: (07) 3249 3000

Figure 3: Lucknow Scandium Cross Section 7,894,920mN

Figure 4: Lucknow Scandium Cross Section 7,894,820mN

Figure 5: Lucknow Scandium Cross Section 7,894,200mN

Figure 6: Lucknow Scandium Cross Section 7,894,040mN

Competent Persons Technical information and exploration results contained in this report have been compiled by Metallica Minerals Ltd’s full time employee Andrew Gillies in the position of Managing Director. Mr Gillies is a member of the Australasian Institute of Mining and Metallurgy and has relevant experience in the mineralisation being reported on to qualify as Competent Persons as defined by the Australasian Code for Reporting of Minerals Resources and Reserves. Mr Gillies consents to the inclusion in this report of the matters based on the information in the form and context in which it appears. This Mineral Resource estimate is based upon and accurately reflects data compiled, validated or supervised by Mr John Horton, Principal Geologist, who is a Fellow of the Australasian Institute of Mining and Metallurgy and a full time employee of Golder Associates Pty Ltd. Mr Horton has sufficient experience that is relevant to the style of mineralisation and the type of deposit under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for the 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 letter.

About Scandium (Sc)

Scandium (Element 21) is most commonly considered one of the 17 rare earth elements and one of the most valuable. Although scandium is widely distributed in the Earth’s crust in trace amounts, it is very rarely enriched or concentrated to exploitable levels and therefore high grade large tonnage mineable scandium deposits are scarce. Scandium shares similar properties to other more abundant and commonly used strategic tech metals such as titanium, zircon and yttrium. Scandium has unique properties that will enhance our technological future. The applications of scandium are increasing because of its specific mechanical and chemical properties over other metals, and hence there is a growing market demand. Scandium is a powerful grain refining element for aluminium and therefore is the most potent strengthening element that can be alloyed with aluminium. The properties of Sc-strengthened

aluminium alloys (Al-Sc) and Scandia or Scandium oxide (Sc2O3) stabilized Zirconia (ZrO2)

materials are particularly promising. The Al-Sc alloys (e.g. 0.5% Wt) have a number of superior properties including light weight, high strength, superior weldability, good thermal resistance, corrosion resistance and long durability. The principal current applications of the Al-Sc alloys to date are for sporting equipment and military demand. For example, scandium aluminium alloys are applied in premium bicycle frames and in fighter planes and missiles. Such enhanced aluminium alloys were first developed and used by the USSR for MIG fighter aircraft and missile structural components in the 70’s and 80’s. Scandium can be used to make solid oxide fuel cells (SOFC’s) significantly more efficient. Scandia-stabilised zirconia has extremely high oxygen-ion conductivity for use as a high efficiency electrolyte in solid oxide fuel cells. This will be increasingly important with the worldwide massive expansion of natural gas usage and gas distribution infrastructure. Natural gas and fuel cells are the future, and Metallica believes scandium is going to be part of that future by getting the most amount of electrical and thermal energy from the least amount of fuel – efficient cleaner energy supply is the gateway to a more sustainable society. Also, scandium bearing metal halide lighting can produce white light with a colour balance that resembles natural sunlight, therefore providing a better visual light, with higher lumens and energy savings. World scandium usage is currently small (estimated at 5 to 10tpa), its use and market growth has therefore been severely restricted by scandium’s scarcity and lack of reliable supply. At present there is no scandium ore mining or primary scandium supply. It is being sourced solely from remnant former Soviet era stockpiles and in small quantities as a by-product from some other strategic metal processing. Scandium oxide prices are currently over US$1,500 per

kilogram for high purity scandium oxide (~99.9% Sc2O3). Worldwide, high grade (>70g/t Sc) scandium deposits are very rare and Metallica has been fortunate in defining two large high grade scandium resources (Lucknow and Kokomo), associated with Ni-Co resources, to substantially support its NORNICO Tri-metal Ni-Co-Sc project and therefore maximise revenue. Metallica therefore has the potential to be the major world supplier of scandium. Having three metals is a much better proposition for project development than a situation of just a stand-alone scandium or nickel-cobalt laterite project.

It is envisaged that once a long term reliable supply of significant quantities of scandium (say >40,000kg pa Sc2O3) becomes available for the first time, the market for scandium is expected to grow substantially.

Aerial view of drill rig completing grid drilling on the Lucknow laterite plateau December 2011

Key features of the Mineral Resource estimate

Detailed Topography was derived from recent WorldView-2 satellite imagery.

Collars of holes drilled by Metallica were surveyed by differential GPS by PES Surveyors in 2010 and Terra Search Pty Ltd in 2011. The stated accuracy by PES is ±20 mm.

All drill holes used for resource estimation were drilled by Metallica in 2010 and 2011.

All drill holes used for resource estimation were drilled vertically. Visual inspection of some drill holes in 2010 indicated no significant down-hole deviations. Due to the shallow nature of the drilling (<40 m) it is unlikely that material drill hole deviations would have occurred.

Sample recovery in the mineralised zone is believed to be good to excellent.

All drilling used for resource estimation was by face-sample RC.

The drill holes were sampled by spearing, predominantly over 1 m intervals.

SGS Laboratories (SGS) in Townsville were used for assaying. SGS used a four acid digest method with an ICP finish.

The QAQC program for Metallica drilling involved intra-laboratory pulp duplicates, blind field duplicates and inter-laboratory check samples. The QAQC results indicated that the assays for the Metallica drilling program were satisfactory for resource estimation purposes.

The mineralisation has a surface expression that was observed in places during a field visit by Mr Horton in 2010.

Golder undertook basic validation checks of the drill hole database, including a 100% validation between digital assay certificates and the supplied database.

Drill hole data was composited to 1 m, which was the dominant sample interval.

Appropriate high-grade cuts to Ni, Co and Sc outlier values were applied on a zone by zone basis.

A wireframe of the paleo-laterite (enrichment) horizon between drill holes was constructed based on sectional interpretations. A nominal 0.3% Ni was the underlying basis of a Ni-Co mineralised wireframe. A nominal 60 g/t Sc was the underlying basis of a Sc mineralised wireframe. Laterite profile wireframes were also constructed to constrain major material types based on either geochemistry or logging.

The mineralised envelope wireframes included a nominal 20 m horizontal extrapolation from the drill holes at the margins of the mineralised zone.

A computer block model was constructed by filling the mineralised wireframes with 10 m by 10 m by 1 m blocks. Additional blocks were retained to the topography and base of drilling as well as peripheral to mineralisation to permit open pit optimisation. Sub-blocking was not employed, with whole blocks assigned to mineralised/geological domains on a maximum proportion basis.

Grades of Ni, Co, Fe, Mg, Mn, Al, Ca, Cr, Cu and Sc were estimated by ordinary kriging using a three pass search strategy with a maximum of 15 composites, including a maximum of 3 composites selected from any one drill hole. A minimum of 10, 8, and 1 composites were used for Pass 1, 2, and 3 respectively.

Hard boundaries were used between the mineralised envelopes and the laterite domains for Ni, Co and Sc. All other elements used hard boundaries between different laterite horizons.

Unfolding methods were employed during variogram analysis and block grade estimation to represent adequately the paleo-laterite (enrichment) horizon between drill holes.

Validation included visual observation, statistical checks, and swath plots.

Internal dilution has been accounted for, but not dilution at the margins of the mineralised wireframe.

Dry bulk densities were assigned to blocks according to nearest neighbour estimates of lithology. Bulk density values applied were derived from 70 samples from Lucknow and other results from the NORNICO project.

Metallica advises that the 0.7% NiEq (Ni + 2*Co) and 70 g/t Sc cut-off grades are considered appropriate based on ongoing feasibility studies for the NORNICO project. The suitability of this cut-off grade is to be confirmed as economic evaluation and metallurgical test work as part of feasibility studies at Lucknow.

High Sc and high Ni-Co mineralisation overlap in places and for practicality Resource classification was maintained though Ni-Co generally displays less lateral continuity. It should be noted that some additional infill drilling maybe required to convert Resources based on Sc alone to Reserves. This is partly related to the economics of Sc that may only be fully defined during feasibility assessment.

Resource classification is based on target drill spacing of 20 m by 20 m for Measured, 40 m by 40 m for indicated and 80 m by 40 m for Inferred Mineral Resource. This classification is based on the continuity of the principal Ni-Co mineralisation. Sc displays greater continuity in places but cannot be practicably classified separately for Ni-Co as the two mineralisation zones largely overlap.