On 24 April 2019, minerals exploration company Metallica Minerals Limited (ASX: MLM) announced that in combination with its Joint Venture (JV) partner, MLM had undertaken investigations into access arrangements for a barge?loading facility (BLF) to allow the export of bauxite from the Urquhart JV Project. The work comprises of negotiations for probable priority access to the BLF, which is held by Green Coast Resources at the Hey Point.
Negotiations with this third-party owner of Hey point were established again through the new Board in the middle of the February 2019. However, the negotiations have not fructified in a feasible commercial contract, which would enable the JV to practically use the Hey Point infrastructure this year.
The company is open to further discussions with the third?party owner of the Hey Point facility. Though, at this stage, a commercial outcome (including enough available capacity) to utilise Hey Point is unlikely to be fruitful in the immediate future.
MLM further mentioned that it was disappointed that the beginning of mining operations communicated before the election of the new Board has now been further postponed. The new Board concentrates on exporting the bauxite to market in a safer way. 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.
Presently, MLM and its JV partner are continuing with the investigation work, at the recently identified alternative arrangements for shipping the bauxite product. Positive early progress is being made on studies and designs for building a new BLF that would be controlled by the JV parties. Also, it is likely to significantly lessen operating and shipping costs, thus potentially offsetting higher up?front capital and time delays.
The outcomes of these new studies will become available and be released to the ASX in Q3 2019. Once a commercial and permitted development pathway has been confidently shown to be viable, it is estimated that production utilising one of these alternative BLF options (controlled 100% by the JV) would not begin before the end of CY 2020.
Urquhart Bauxite Project
The Urquhart Bauxite Project forms a part of the Cape York Bauxite and Heavy Minerals Sands JV agreement. The project is situated on the Western Coast area of QLD’s Cape York. Also, Metallica Minerals manages and owns 50 percent of the project. During 2017, MLM obtained the nod of Queensland and Commonwealth government for the Mining Lease. Last year, in November, the company notified the market that it had received the final approval related to the haul road, which links the Urquhart Bauxite Project to the BLF based at the Hey Point.
Recently, the company had announced about the legal actions taken by its suspended Chief Executive Officer.
The stock of the company closed the day’s trading at A$0.019 (as on 24 April 2019) down by 17.391%. The company has a market capitalisation of around A$7.45 million with circa 323.89 million shares outstanding. The stock has given a negative return of 20.69% in the last month period. However, in the last five days, it has given a yield of 4.55%.
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