Assembly starts off Urquhart

Posted September 10, 2015

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Site works for Metallica Minerals’ HMS processing plant.

Metallica moves its Cape York mineral sands project up the priority list

Tenders have been issued for on-site assembly of the processing plant for the Urquhart HMS (heavy mineral sands) project on Cape York as Queensland-based resources company Metallica Minerals draws closer to production.

The plant, fabricated by Consulmet, is being shipped from South Africa to the site – where clearing and civil works have been completed in preparation.

“We will be looking to assemble a suite of subcontractors to build the plant on site and after that we will be going to the market for a raft of operational and maintenance packages,” Metallica chief executive Simon Slesarewich said.

Mr Slesarewich said the company expected to begin zircon-rutile concentrate production after the wet season, although the JV partners are closely monitoring mineral sands prices – which have suffered a recent decline.

“We are watching the market and tweaking our plan to make sure we deliver suitable cash flow out of the project,” he said.

The joint venture has already spent about $6 million out of an expected capital outlay of $7.5 million to start up Urquhart HMS.

Mr Slesarewich said company’s prime focus at the moment was on advancing that project and the adjacent Urquhart direct shipping bauxite project.

The former flagship project for Metallica – SCONI – has been pushed down the priority list by prevailing market conditions.

SCONI is a scandium project located 250km from Townsville and includes the Greenvale, Lucknow and Kokomo deposits.

As a result Metallica is selling off limestone projects it had purchased to support SCONI processing requirements.

The Ootann project, 180km south-west of Cairns, was sold in July for $500,000, followed by the Star River project west of Townsville in August for $370,000.

The company has received expressions of interest for further limestone projects it holds near Gladstone.

Metallica has also realised value from its Lucky Break nickel project in North Queensland, with Queensland Nickel now carrying out rehabilitation works at the site after mining nickel laterite ore to feed its refinery near Townsville.

Queensland Nickel extracted more than 100,000 tonnes of ore from the Dingo Dam mining lease, with Metallica set to reap total payments of $650,000 in return.

On Cape York, Metallica also holds a silica sands resource alongside the Cape Flattery silica sands operation and is looking for partners to help develop the site.

Mr Slesarewich described the potential from the raft of Cape York projects as very exciting for the company and the region.

He is also excited about the Esmeralda project, south of Croydon, where the company holds a “very large and unique” graphite-in-granite resource.

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