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METALICITY LIMITED

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JUNE 2018 QUARTERLY ACTIVITIES REPORT

ASX Announcement 31 July 2018

HIGHLIGHTS 

  • Metalicity Limited (“Metalicity”) received strong shareholder approval for the sale of the Admiral Bay Project and the Lennard Shelf Project (“Zinc Projects”) to Kimberley Mining Limited (“Kimberley Mining”) paving the way for listing of Kimberley Mining on the TSX-V. 
  • Metalicity will effectively vend the zinc projects into Kimberley Mining in exchange for approximately C$32.5M cash and shares (up to C$12.5M cash and retaining 25M shares valued at C$20M)1 . 
  • Metalicity will retain ~40% of the expanded capital of Kimberley Mining2 still representing one of the largest exposures to the zinc sector of any active zinc development company on the ASX. 
  • Exploration advanced on the Company’s prospective battery metals (lithium, cobalt and graphite) projects in Western Australia with field mapping, geochemical sampling and drilling continuing to generate new high priority targets for future drilling programs. 
  • Evaluation of numerous additional new projects within the battery metals sector (including nickel and copper) which have the potential of creating significant shareholder value either through exploration, joint ventures and/or strategic partnerships. 
  • Cash balance of approximately A$1.87M, with likely cash inflows of ~$750,000

Commenting on the quarter, Metalicity Managing Director Matt Gauci said: 

“Metalicity is very pleased with the strong shareholder support for the sale of the Company’s zinc projects and proposed listing of Kimberley Mining on the TSX-V and thanks shareholders which, along with the support of project stakeholders and some of the world’s largest mining investors in Resource Capital Funds (“RCF”) and China Minmetals (“Minmetals”), is strong endorsement for the transaction.

The proposed transaction will (1) deliver a cash injection to accelerate exploration on existing exploration projects as well as the evaluation of new additional projects and (2) unlock the value of the zinc projects to create shareholder value for Metalicity via our approximate 40% holding in Kimberley Mining on the TSX-V. Both companies, advisors and brokers are now working through the listing process with the completion of the Initial Public Offering (“IPO”) targeted for October 2019.

Concurrently the Company is advancing exploration work on our existing exploration projects where high priority targets continue to be generated from field mapping, geochemical sampling and drilling, while a project generation program is underway to identify, evaluate and acquire new additional battery metals projects (including copper and nickel) that will create further shareholder value.”

KIMBERLEY MINING LIMITED TSX-V LISTING

Subsequent to the end of the June quarter the Company received strong shareholder approval for the sale of the Admiral Bay and Lennard Shelf projects (“Zinc projects”) to Kimberley Mining Limited (“Kimberley Mining”), paving the way for the listing of Kimberley Mining on the TSX-V.

The sale of the zinc projects and ultimate strategy of listing Kimberley Mining on the TSX-V received shareholder support of >95% of the vote FOR the resolution and, with support from project stakeholders and some of the world’s largest mining investors including Resource Capital Funds (“RCF”) and China Minmetals (“Minmetals”), is strong endorsement for the transaction.

Metalicity has formed a subsidiary in Vancouver, Kimberley Mining, and is now in the process of effectively vending the zinc projects into Kimberley Mining. Kimberley Mining is completing a seed capital raising targeting C$2M with strong support from new North American institutional, retail and strategic investors with the raising anticipated to be completed shortly.

Once the seed capital raising and sale of the zinc projects into Kimberley Mining is complete, Kimberley Mining will then file a preliminary long form prospectus with the Securities Commission before reviewing any comments, and then filing a final long form prospectus, commencing a marketing roadshow in September and undertaking an initial public offering (“IPO”) to seek a listing on the TSX-V concurrently with the completion of the IPO, targeted for October 2019.

The terms of the sale and purchase of the zinc projects with Kimberley Mining will potentially deliver C$32.5M cash and shares to Metalicity (up to C$12.5M cash and retaining 25M shares valued at C$20M), while Metalicity will retain approximately 40% of the expanded capital of Kimberley Mining post the October listing, still representing one of the largest exposures to the zinc sector of any active zinc exploration and development company on the ASX.

Click here to view the full announcement

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KIMBERLEY MINING TSX-V LISTING UPDATE

ASX Announcement 10 July 2018 

Metalicity Limited (ASX:MCT) (“MCT” or “Company”) is pleased to report that due to interest in its newly created Canadian subsidiary, Kimberley Mining Limited (“KML” or “Kimberley Mining”), seed capital raising from investors in Europe, Asia and Australia, the KML board have resolved to accept subscriptions for up to an additional C$1M (total C$3M). The offering is expected to be completed on or about 27th July 2018.

The offer will now be made available to qualifying investorsin these jurisdictionsthrough the Canadian broker, Haywood Securities, an affiliated European, Asian or Australian broker, or direct through KML. Funds raised by KML are intended to be used to progress KML’s TSX-V listing, project development, vendor payments and for working capital.

In the Company’s announcement of 18 June 2018, it was noted that KML would be issuing shares under its seed capital raising. However, following a minor change to the offer terms, KML will instead be issuing “special warrants” to investors priced at C$0.40 each (as outlined in the Company’s notice of meeting, despatched last week). The special warrants will be automatically exercised upon the subsequent filing of a prospectus in Canada. Each special warrant will be converted into one common share of KML for no additional consideration.

The relevant prospectus is expected to be completed prior to the end of the calendar year. If the final prospectus is not completed by that date, each special warrant will convert into 1.1 common shares of KML for no additional consideration. The completion of the offering of special warrants is subject to conditions, including KML entering into certain agreements in relation to its proposed TSX-V listing and MCT obtaining shareholder approval for the proposed disposal of its zinc projects. The Company has resolved to now issue up to 7.5 million special warrants to investors priced at C$0.40 each to raise total funds of $C3 million.

The TSX-V listing of KML and associated disposal of the Company’s zinc projects are subject to the approval of the Company’s shareholders, which, together with related matters, will be put to vote at a general meeting to be held on 27 July 2018 (refer to the Company’s announcement of 27 June 2018). The TSX-V listing of KML is currently targeted and on track for October 2018.

Click here to view the full announcement

FURTHER LITHIUM TARGETS IDENTIFIED AT PILGANGOORA

ASX Announcement 3 July 2018 

HIGHLIGHTS 

  • Further lithium targets identified at the company’s 100% owned Pilgangoora North project, within the world-class Pilgangoora lithium district in the Pilbara Region of Western Australia (WA). 
  • Recent field work, including rock chip sampling and reconnaissance geological mapping of pegmatites within the PN1 and portions of the PN 2 target areas, has located several pegmatites hosting anomalous lithium values associated with muscovite and, one pegmatite hosting anomalous lithium niobium and tin values, also associated with muscovite.
  • The field work at the PN 1 and portions of the PN 2 target areas has also confirmed the Motherin Monzogranite has geochemical signatures indicating the granite maybe the source of lithium bearing pegmatites and, hence, additional field work to assess the larger pegmatitesfor lithium mineralisation is warranted. 
  • Based on recent and previous field work, two areas have been identified that warrant further work to locate pegmatites with potential to host economically significant lithium mineralisation. 
    • PN2 comprises an area some 3 km in strike length within greenstones along the southern and western contacts of the Motherin Monzogranite and; 
    • PN3, comprises an area some 5 km in strike length within greenstones along the northwestern contact of Motherin Monzogranite (Figure 4).
  • Exploration planning is in progress to follow up these target areas with additional reconnaissance mapping and rock chip sampling of pegmatites and, if warranted, drill testing.

Metalicity Limited (ASX:MCT) (“MCT” or “Company”) is pleased to report that recent field work has identified two (2) lithium target areas to advance additional field work and potential drilling at the Company’s 100% owned Pilgangoora North Lithium Project located in the Pilbara Region of Western Australia.

The Pilgangoora Project is located some 9 km north of the world class Pilgangoora group of lithium deposits currently being developed by Pilbara Minerals Limited (ASX:PLS; Pilbara Minerals) and Altura Mining Limited (ASX:AJM, Altura Mining).

The Pilgangoora North project was acquired from Fortescue Metals Group (ASX:FMG), a shareholder of Metalicity. Preliminary mapping, satellite imagery interpretation and rock ship sampling defined a series of pegmatites over a 10 km trend. The recent reconnaissance mapping and rock chip sampling, combined with the earlier rock chip sampling results, has identified priority target areas for further work.

Metalicity Managing Director Matt Gauci said:

“The exploration program has confirmed the likely source granite for many of the pegmatites with rare-element geochemical signatures present within the Pilgangoora North tenements and has provided additional information which supports the two priority target areas (PN 2 and PN 3) in which to focus further exploration activity for lithium bearing pegmatites”

Click here to view the full announcement 

EXTENSIVE LITHIUM TARGETS IDENTIFIED AT GREENBUSHES

ASX Announcement 14 June 2018 

HIGHLIGHTS 

  • Metalicity has identified two priority lithium targets at the company’s 100% owned Greenbushes North project, within the world class Greenbushes pegmatite lithium district in the South West region of Western Australia (WA). 
  • A geochemical sampling methodology was designed and employed based on previous successful laterite sampling programs [e.g. Smith et al, 1987] which confirmed the technique is appropriate to discover lithium and tantalum bearing pegmatites in laterite-covered areas at the world class Greenbushes lithium deposit located ~35 km to the south. 
  • The geochemical sampling program at Greenbushes North covered an area of some 12 km X 11 km (132 km2 ) and highlighted two priority lithium target areas which may indicate buried LCT type pegmatites as shown on Figure 4. 
  • The lithium index target areas collectively cover some ~30km2 . 
  • Importantly the anomalies follow structural trends, clustering around the Donnybrook-Bridgetown Fault, which is interpreted to be a major controlling factor in the location of the Greenbushes deposit. 
  • Exploration planning is in progress to follow up the lithium targets using infill lateritic sampling on a 250 m X 250 m grid. This sampling will be augmented by rock chip samples of pegmatites, if located, to vector in on mineralisation.

Metalicity Limited (ASX:MCT) (“MCT” or “Company”) is pleased to report that it has identified two (2) extensive lithium target areas and a number of point anomalies from a program completed by Metalicity involving geochemical sampling and geological evaluation, at the Company’s 100% owned Greenbushes North Lithium Project, along strike from the world class Greenbushes lithium deposit in the South West of WA.

The Greenbushes deposit is the world’s largest and highest-grade lithium deposit (118Mt of spodumene ore containing 2.4% lithium) with an ore feed containing 3%-4.5% Li20 [ref. Talison website). The Greenbushes pegmatites intrude along the major northwest Donnybrook-Bridgetown Fault and the main pegmatite consists of a zone over 3 kms X 300m (0.9km2 ). Greenbushes currently supplies 30% of the worlds lithium.

The company’s Greenbushes North Tenement application (E70/5172) is located 35 km north of the Greenbushes deposit in the south west of WA and covers a total area of 70 km2 located over freehold land and partial state forest, for which the company is progressing standard access agreements.

Metalicity Managing Director Matt Gauci said:

“The exploration program has identified important criteria for the discovery of buried LCT-type lithium pegmatites similar to those which host the world class Greenbushes deposit. Firstly, the sampling methodology used identified two significant lithium index anomalies and secondly the clustering of these anomalies located over the same fault zone which controls the Greenbushes deposit. The anomalies cover an extensive total area of ~30km2 and exploration teams are being mobilised to progress work programs at these new prospects.”

Click here to view the full announcement 

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