Metallica Minerals : Positive Metallurgical test work results achieved at CFS

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28 April 2022

Positive Metallurgical Test Work results achieved on targeted samples from the Cape Flattery Silica Sand Project

Highlights

• • Results achieved from this latest round of testwork produced an exceptionally high-quality product that contains +99.99% SiO2 and Fe2O3 grades of between 70ppm to 90ppm

• • The characterisation testwork was carried out by Mineral Technologies on three targeted samples with the aim of the laboratory-scale testwork to produce the highest grade silica sand product that can be achieved by conventional processing methods

• • This result was achieved by dry and wet screening, heavy liquid separation and attritioning

• • The heavy liquid separation produced the most significant reduction in Fe2O3 content with the bulk of the iron being removed by this stage

• • Test work is continuing at Minerals Technologies with a bulk sample comprising approximately 800kg of sand from Cape Flattery being run through a pilot plant for process design purposes

Metallica Minerals Limited (Metallica, ASX: MLM) is pleased to announce that results from the latest round of metallurgical testwork on three targeted samples from the Cape Flattery Silica project have confirmed that a high-quality premium product can be achieved from a key area within the project.

This round of metallurgical testing was undertaken following the previous bulk testing undertaken on a sub-sample of material from a 914kg composite sample taken from drilling completed in August 2021 (see ASX release 21 March 2022: "Cape Flattery Silica PFS confirms excellent economics and maiden ore reserve"). The PFS disclosed that specific metallurgical test work would be undertaken "to confirm process pathways to reduce Fe2O3 content to less than 120ppm in our product." The three targeted samples are the first stage of this metallurgical test work.

The latest testwork was undertaken by Mineral Technologies and involved a silica sand characterisation study and was conducted on three samples (Samples CFS2 to CFS4) with the work comprising laboratory-scale tests to produce products that represent the purest silica sand that may be achievable using conventional mineral processing methods.

The sand characterisation study involved using a suite of laboratory tests to understand how the sand will behave in a full-scale processing plant. The sand sample is run through a series of stages, with the silica content and the iron content recorded at the end of each stage. This work identifies which stages, (laboratory methods) are crucial in upgrading the feed sand to a high-end product.

The laboratory work involved:

• • Dry screening at 1mm to remove oversize

• • Wet screening at 45µm to remove slimes

• • Dry screening of the +45µm fraction using 600 and 106µm screens

• • Heavy liquid separation (HLS) of the -600+106µm fraction at a specific gravity of 2.70, to mimic spirals

• • Intensive attritioning of the HLS float fraction for 5 minutes

• • Magnetic separation

Metallica Executive Chairman, Theo Psaros said "as disclosed in our Pre-feasibility Study (see ASX release: 21 March 2022: "Cape Flattery Silica PFS Confirms Excellent Economics and Maiden Ore Reserve") we advised that we needed to undertake additional metallurgical testing to seek to achieve a reduction in the level of Fe2O3 to< 120ppm. These three samples tested had different raw feed characteristics (Fe2O3 and SiO2 grades) to the bulk sample initially tested. The initial sample collected for testwork was a composite sample which comprised sand from different part of the Cape Flattery deposit. The three samples tested were from one area within the Measured Resource.

Having achieved these very impressive levels of low Fe2O3, these results will give potential offtake partners significant confidence in our project's potential and our ability to produce a high premium product. Test work is continuing at Mineral Technologies with a bulk sample comprising approximately 800kg of sand from Cape Flattery being run through a pilot plant for process design purposes. Future metallurgical tests are to target specific areas of the resource to determine where the best sand is that when processed, will generate a premium product."

This recent round of metallurgical testwork highlighted that the HLS stage of the process shows the most significant reduction in Fe2O3, with the Fe2O3 content of the silica sand reduced from grades of 260 ppm Fe2O3 to between 70ppm and 100ppm. The dry screening completed prior to the HLS stage and the proceeding attritioning stage only saw minimal changes in the Fe2O3, grade of the products. The lowest Fe2O3, grades achieved by this testwork for Samples CFS2, CFS3 and CFS4 were 70ppm, 90ppm and 90ppm respectively.

The HLS stage rejected roughly 0.10% of the feed mass to the sink fractions. The sink fractions had high concentrations of TiO2 and Fe2O3 which are probably in ilmenite. Removal of the sinks saw a major reduction in the Fe2O3 content of the float fractions to between 70 and 100ppm Fe2O3.

The progressive reduction in the Fe2O3 grade at the HLS and attritioning stage of the testwork is presented in Table 1 below and the silica sand product produced after the HLS stage and the predominantly iron rich "reject" material are shown in Figure 1 below.

Fraction	Fe2O3 content (ppm)
Sample 1 (CFS2)	Sample 2 (CFS3)	Sample 3 (CFS4)
-600+106µm fraction gravity float (-2.7sg) attritioned float (+106µm) non-magnetic float	260 70 70 70	190 100 90 90	250 100 90 90

Table 1. Progressive characterisation Fe2O3 grades

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S1 (CFS2)

S2 (CFS3)

S3 (CFS4)

Floats (-2.70sg)Sinks (+2.70sg)

Figure 1: HLS products

The final stage of the characterisation testwork involved the use of a magnetic separator on the attritioned product. No significant upgrade in the silica content of the samples or a reduction in the iron content of the final product was achieved, with the final product after the magnetic separation being 99.99% SiO2 and between 70ppm to 90ppm Fe2O3 for the three samples.

A particle size distribution study was completed on the sand product, after the magnetic separation stage. The study was undertaken to ensure that the particle size of the final product falls within the optimum specifications for a premium sand product.

The products had been classified to -600+106µm fractions, so only a negligible amount of material was contained outside this range with the 150, 212 and 300µm fractions retaining the highest mass proportions of the size fractions. Figures 2 and 3 show the silica sand collected from each size fraction and the particle size distribution (PSD) graph respectively.

The PSD study confirms that the silica sand product conforms to the specifications for a premium product.

S1 (CFS2)S2 (CFS3)S3 (CFS4)

Figure 3: Cumulative particle distribution curves of non-magnetic products

A table summarising the assay results for the various stages of the testwork is included as table 4 in the Appendices.

About the Cape Flattery Silica (CFS) Project

Metallica's 100% owned Cape Flattery Silica Sands (CFS) project is adjacent to the world class Cape

Flattery Silica Sand mining and shipping operation owned by Mitsubishi. Exploration drilling to date has now confirmed that the sand dunes within EPM 25734 contain high purity silica sands with an in- situ quality which is understood to be comparable to Mitsubishi's Cape Flattery Silica Mine. On 15

June 2021 the Company announced that it had lodged a Mine Lease Application (MLA) for the project (see ASX Release: 15 June 2021 MLA Lodged for Cape Flattery Silica), Figure 6.

Figure 4 EPM 25734 location and orientation at Cape Flattery and within the Cape Flattery Port limit

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Figure 5. Yearlong Contractors vacuum-based drill rig working at CFS project with Mitsubishi silica sand operations in the background

Figure 6 Cape Flattery Mining Lease Boundary (Application)

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