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Metallica Minerals Limited COLUMBOOLA JV A.C.N. 141 993 535 A.C.N. 117 763 443 EPC 1165 “Columboola” COLUMBOOLA PROJECT ANNUAL REPORT FOR THE SEVENTH YEAR PERIOD 10/12/2013 to 9/12/2014 TENEMENT HOLDER: SINOCOAL RESOURCES PTY LTD 51% METROCOAL LIMITED 49% MANAGER: COLUMBOOLA JOINT VENTURE AUTHORS: N. VILLA MAP SHEETS: 1: 250 000 Chinchilla SG56 9 1: 100 000 Miles 8944, Guluguba 8945 COMMODITIES: COAL GEOGRAPHIC COORDS: 26° 40'S / 150°11'E DATE: 12 January 2015 1 Table of Contents Page No. 1. SUMMARY ...................................................................................................... 4 2. INTRODUCTION ............................................................................................. 6 3. LOCATION, ACCESS & SETTING ................................................................. 7 ENVIRONMENTAL CONSIDERATIONS ........................................................................... 7 Endangered Regional Ecosystems .................................................................................................... 7 Other Environmentally Sensitive Areas ............................................................................................. 9 Cultural Heritage / Aboriginal Cultural Heritage / Heritage Sites.................................................... 9 4. INDUSTRY BACKGROUND AND MARKET ................................................. 11 RECENT MINING HISTORY AND COAL UTILIZATION ................................................ 11 CONVENTIONAL MINING OPPORTUNITIES – OPEN CAST AND UNDERGROUND ....... 12 5. TENURE ....................................................................................................... 13 TENEMENT RESTRICTIONS ......................................................................................... 13 NATIVE TITLE ............................................................................................................. 14 OVERLAPPING COAL SEAM GAS TENURE (PART 7AA OF THE MRA) ..................... 14 RELINQUISHED SUB BLOCKS ...................................................................................... 15 SYNTECH RESOURCES PTY LTD COOPERATION AREA ............................................. 15 6. GEOLOGICAL SUMMARY ........................................................................... 17 TARGET SEAMS ........................................................................................................... 22 7. PREVIOUS EXPLORATION ......................................................................... 24 8. TECHNICAL SUMMARY OF WORK COMPLETED IN THE SIXTH YEAR OF TENURE ..................................................................................................................... 25 COMPLIANCE STATEMENT FOR PROGRAM OF ACTIVITIES ...................................... 25 2013 PROGRAM ........................................................................................................... 25 Planning ................................................................................................................................................ 25 Landholders.......................................................................................................................................... 25 Cultural Heritage .................................................................................................................................. 26 Environmental Management - Plan Site Works and Rehabilitation ............................................. 26 Gas Management Plan ....................................................................................................................... 27 Drill Rig ................................................................................................................................................. 27 2011 DRILLING PROGRAM RESULTS .......................................................................... 28 Drill Hole Details & Locations ............................................................................................................ 28 Survey ................................................................................................................................................... 29 Wireline Logging .................................................................................................................................. 29 Coal Quality .......................................................................................................................................... 29 GEOLOGICAL MODEL & RESOURCE .......................................................................... 29 ECONOMIC POTENTIAL OF EPC 1165 COLUMBOOLA .............................................. 30 9. EXPLORATION PROGRAM FOR YEAR 7 ............................................................ 31 10. REFERENCES .............................................................................................. 32 11. APPENDICES AND ENCLOSURES ............................................................. 34 APPENDIX 1 ................................................................................................................. 34 Geological Model ................................................................................................................................. 34 APPENDIX 2 ................................................................................................................. 35 2 Environmental Permit ......................................................................................................................... 35 ENCLOSURE 1 .............................................................................................................. 36 EPC 1165 Columboola DH Plan ....................................................................................................... 36 ENCLOSURE 2 .............................................................................................................. 37 Syntech Pty Ltd Cooperation Area ................................................................................................... 37 LIST OF TABLES Table 1: Sub blocks in EPC1165 .............................................................................. 13 Table 2: Overlapping Petroleum Tenures ................................................................. 14 Table 3: Cameby Downs Mining Leases on EPC 1165 ............................................ 16 Table 4: Drill Collar Data........................................................................................... 28 LIST OF FIGURES Figure 1: Location of the EPC 1165 ............................................................................ 8 Figure 2: EPA Environmentally Sensitive Areas ...................................................... 10 Figure 3: Surat Basin Stratigraphy ............................................................................ 18 Figure 4: Typical Surat Basin Coal Seams ............................................................... 20 Figure 5: Walloon Sub Group Stratigraphy ............................................................... 21 Figure 6: Cameby Downs Representative Stratigraphic Column .............................. 23 Note: This report complies with the MRA reporting regulations as prescribed in sections 13B, 13C or 13D of the Mineral Resources Regulation 1989. The exploration work completed on these tenements complies with the Work Program in the tenure document. Expenditures on the tenements have been met or exceeded. 3 1. SUMMARY The Columboola JV was established in late 2010 comprising SinoCoal Resources Pty Ltd (51%) and MetroCoal Ltd (49%) interest in Exploration Permit for Coal (EPC) 1165 ‘Columboola’. SinoCoal Resources Pty Ltd is the Australian subsidiary of the China Coal Group based in Beijing, China. MetroCoal Ltd is a listed company on the ASX (ASX Code MTE) with Metallica Minerals Ltd as the majority shareholder at the time of this report. The tenement is managed by the Columboola JV. The Columboola Project covers the central east of the Surat Basin in South East Queensland. The JV is targeting the Juandah and Taroom Coal Measures within the Jurassic Walloon Sub-group. Columboola EPC 1165 originally consisted of 294 sub blocks (now 280) and is located west of Chinchilla and covering the town of Miles. The tenement strategically covers the Juandah and Taroom Coal Measures from 100 to 800m depth. The JV’s exploration philosophy is to identify coal seams suitable for conventional underground mining. The Objective of the sixth year’s program was to continue modelling of the resource based on previous years’ drilling programs across the tenement to quantify the prospective Juandah and Taroom Coal Measures and investigate identified areas where seams are thick, continuous and correlatable. Field work ceased in October 2012 after which the 2013 program involved resource model development. Further works for the 2014 season were geared towards desktop resource model development and long term preparations for application for a higher form of tenure. Whilst it was the original intention in 2014 to continue field oriented works, the downturn in the coal market at the end of 2013 saw unfavourable conditions for the justification of continued high levels of spend. As a result, focus was made on the consolidation of data and integration of this information into the resource model. The cooperation agreement with Syntech Resources Pty Ltd (Syntech) to explore 4 sub-blocks within EPC 1165 established in 2007 continued, with Syntech conducting 4 no work within that area in the reporting
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