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QUARTERLY REPORT

QUARTERLY REPORT for the Period Ending – 30 June 2005

HIGHLIGHTS High NICKEL-COBALT

• Positive Results from drilling programmes at Bell Creek,

Minnamoolka and Kokomo. Highlights include:-

Bell Creek South BCDDH-16, 34m @ 1.51% Ni, 0.22% Co Minnamoolka MIN-35, 9m @ 1.18% Ni, 0.17% Co Kokomo KK-49, 34m @ 0.90% Ni, 0.34% Co

• Initial results from Heap Leach Nickel Testwork on NORNICO ores positive with nickel extraction rates of up to 80% and 50% of the nickel released into solution within the first 6 days.

• Increase in Resource at Dingo Dam within the Lucky

Break Project and the Dingo Dam deposit proposed for a demonstration Ni Heap Leach operation.

COAL

• The company has a number of coal interests with a focus on

the evaluation and development of the Taabinga 181 Mt Measured and Indicated Coal resource and coal exploration in the Tarong Coal Basin. Metallica has increased its interest in coal with three granted EPC’s (Condamine, Killarney and Allora) in the Warwick and Millmerran areas (“the Condamine Coal Project or CCP”).

• The company has entered into an agreement with InterCoal

Ltd (INL) to progress all its coal projects ahead of what was envisaged when the company lodged its prospectus in September 2004. However, we have today been advised that this prospectus has been withdrawn and a separate ASX release will be made following this report.

BAUXITE • Sold 10% of Cape Alumina Pty Ltd to Anegada Minerals for

$200,000 acquired 100% of Aldoga Minerals (from Anegada for 40% of Cape Alumina) whose assets include 2 advanced Bauxite Projects in WA.

• MLM through its now 50% owned subsidiary Cape Alumina

has increased its tenement holdings over government mapped bauxite and laterite deposits in the Weipa-Aurukun bauxite province on western Cape York in North Queensland.

SCANDIUM

• Results from drilling have extended the limits of the high grade scandium mineralisation to a strike length of 1.7 km; the Scandium Project is subject to a JV with Straits Resources Ltd.

ASX ANNOUNCEMENT

29 July 2005 .

METALLICA MINERALS LTD

“An emerging Queensland focused multi-commodity

resource company”

ASX Code : MLM / MLMO (listed November 2004)

Issued Capital (30/6/05):

71,413,752 Shares issued 3,927,376 trading Options

1,572,750 escrowed Options 5,050,000 Directors & Management

Performance Options

796 shareholders Top 20 shareholders:- Hold 55 %

Directors: Mr David K. Barwick -Chairman

Mr Andrew Gillies-Managing Director Mr Robert Pyper – Director Mr Brett Smith - Director

Mr John Haley –Director & Company Sec

RC Drilling at Kokomo

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CORPORATE MATTERS Subject to successfully listing of InterCoal on the ASX, the consideration to MLM for the divestment of its Kingaroy Coal project which includes the Taabinga Coal Resource to INL is 30 million fully paid 20 cent shares in INL (representing 40% of the Issued Shares) each with a free attaching option which is exercisable at 20 cents until 30 June 2005. InterCoal has today withdrawn its prospectus and Metallica will now retain 100% interest of the Kingaroy Coal Project. On 23rd May 2005, Metallica successfully completed its transactions with Anegeda Metals Corporation Limited (“Anegeda”) who invested $1.86 million in Metallica and were issued 9.3 million shares at 20 cents each making them the largest shareholder in Metallica with 13.02% of the company. FINANCIAL INFORMATION as of 30th June 2005 As of 30 June 2005, MLM had 71.41 million shares on issue and cash of approximately $3.2 million. Exploration and administration expenditure for the Quarter to 30 June 2005 was $609,000. The estimated expenditure for the next Quarter is $400,000. CHANGES TO THE BOARD Mr Rod Siller resigned as a Non Executive director of Metallica and was replaced by Mr Brett Smith who will represent Anegada on the Metallica Board. Rod has been a Director of MLM since 2001 and we thank Rod for his support and contributions to the company, particularly during the challenging times in Metallica’s evolution, his contributions have been greatly appreciated. Mr Brett Smith is an engineer with business and marketing qualification and is currently the General Manager of Aldoga Services Pty Ltd. Brett was previously a director of Baulderstone Hornibrook Australia and has worked on heavy engineering, construction and development projects in Australia, China and South East Asia. Enquiries: - agillies@metallicaminerals.com.au or phone :- (07) 3891 9611 or for further information visit www.metallicaminerals.com.au.

A.L. Gillies BSc, M. AusIMM - Managing Director - 29 July 2005 In accordance with Listing Rules 5.10, 5.12 and 5.1 of the Australian Stock Exchange Limited, technical information contained in this report has also been compiled by Andrew Gillies and Metallica Minerals Ltd, Exploration Manager, Mr Pat Smith B.Sc (Hons), M.AusIMM, who are competent persons and members of the Australasian Institute of Mining and Metallurgy. Mr Gillies and Mr Smith have relevant experience to the mineralisation being reported on to qualify as Competent Persons as defined by the Australasian Code for Reporting of Minerals Resources and Reserves.

Figure1 Map of QLD with MLM Project Areas

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1. NICKEL-COBALT PROJECTS North Queensland Nickel Cobalt Project (NORNICO), Comprises 2 ML’s, 11 EPM’s and 1 EPMA. NORNICO includes two granted ML’s and over 2000 km2 of contiguous tenements covering prospective and under explored ground in the Greenvale Nickel Province. NORNICO is located approximately 300 km from BHP Billiton’s Yabulu Nickel Refinery near Townsville North Queensland, see Figure 2. The project includes several drilled Ni-Co laterite deposits, one scandium deposit and exploration potential for additional Ni-Co laterite deposits as well as Ni-Cu-PGE- sulphides, base metals and gold. MLM is continuing with Metallurgical testwork to determine if its NORNICO laterite deposits (initially focusing on Bell Creek, Minnamoolka and Dingo Dam – Lucky Break) are amenable to heap leaching which would result in the production of a Ni-Co concentrate, which could then be trucked to Yabulu Nickel refinery or exported. Initial results have been very are encouraging. Figure 2 - NORNICO Projects and Setting

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Corporate Activity

Metallica is close to finalizing a draft formal JV Agreement with BHP Billiton (based on a non binding HOA signed in December 2004) principally for nickel sulphide exploration within the NORNICO North project tenements. Details of the HOA are summarised in the March Quarterly report and in a release made to the ASX on the 13th December 2004. The main points of the agreement are listed below.

The Joint Venture is primarily to explore for Ni-Cu-PGE sulphide deposit within the NORNICO North tenements, see Figure 3.

BHP Billiton can earn up to a 75% interest in any one of the NORNICO North tenements by

expending $10 million or by completing a bankable feasibility study within seven years of commencement of the JV.

Metallica will retain 100% interest in all its currently defined Ni-Co laterite deposits in the

Exploration Activities

Over the last 3 months a total of 42 RC holes (for 1430m) and 18 Diamond (for 474m) holes have been completed at the five key NORNICO prospect areas. The RC drilling was aimed at outlining initial Ni – Co resources at Minnamoolka and Bell Creek Northwest and testing Ni – Co - Sc soil anomalies at Kokomo. The diamond drilling was completed primarily to obtain material for metallurgical testwork from the Bell Creek South Lease and the Dingo Dam prospects (part of the Lucky Break Project) and to obtain additional geological and specific gravity data for these deposits. Minnamoolka A total of 19 Holes for 361m were drilled at Minnamoolka which is one of the key laterite deposits currently being evaluated within NORNICO. The area of exposed nickel laterite targeted at Minnamoolka for resource definition drilling is approximately 120 hectares. The laterite ore at Minnamoolka is high in free silica with honeycomb and silica box work textures common. Results from the May 2005 drilling programme confirmed the presence of a large area of low grade nickel mineralisation which covers an area in excess of 1 km long by 200m wide which remains open in all directions. The highest result recorded was in hole Min-35 which intersected 19m @ 1.18% Ni and 0.17% Co, Min-35 is the first hole at Minnamoolka to intersect a significant zone of Cobalt mineralisation. Other highlights from the drilling include:-

• Min-24, 13m @ 0.77% Ni from 1m • Min-36, 14m @ 0.79% Ni from 0m • Min-37, 19m @ 0.74% Ni from 0m

For further information regarding the drilling results at Minnamoolka, see related ASX release dated 8th July 2005. Bell Creek Northwest A total of 23 holes for 496m were drilled at Bell Creek Northwest. The drilling was aimed at defining the limits of significant Ni mineralisation prior to applying for a mining lease over the area and to obtain data for a preliminary resource estimate. The drilling confirmed the presence of significant low grade Ni mineralisation (>0.3%) contained within 3 areas. Highlights from the drilling include:-

• BCNW-15, 13m @ 1.32% Ni from 5m • BCNW-16, 10m @ 0.87% Ni from 0m • BCNW-29, 10m @ 0.84% Ni from 12m

For further information regarding the drilling results at Bell Creek Northwest, see related ASX release dated 8th July 2005.

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Figure 3 – PROPOSED NORNICO NORTH JV TENEMENTS, MLM & BHP BILLITON’s EPM’s.

Bell Creek South Lease Sixteen HQ diamond drill holes for 416m were drilled at the Bell Creek South Lease primarily to obtain samples for heap leach nickel metallurgical testwork. In addition to this specific gravity data was collected from the drill core to aid in future resource calculations. Previous resource studies have used a SG of 1.5 for estimates of tonnage, the new data from the core holes indicate that the “dry” SG for the prospect ranges between 1.3 – 1.9, with the weighted average expected to be greater than 1.5.

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The 16 core holes were drilled between existing percussion holes drilled prior to 1997; the holes tested the previous geological model for the prospect and continuity of the mineralisation between the historical holes. The diamond holes were drilled across the deposit to provide samples of the various ore types and varying grades which exist throughout the prospect area. Results from the programme were positive with zones of mineralisation intersected where postulated. The best results include:-

• BCDDH-06, 14m @ 1.53% Ni and 0.05% Co from 0 – 14m • BCDDH-08, 24m@ 1.96% Ni and 0.12% Co from 0 – 24m • BCDDH-16, 34m @ 1.51% Ni and 0.22% Co from 16m – 50m.

An updated resource estimate will be made for the Bell Creek South Lease using the additional drill hole and SG data collected during the recent drilling programme. A previous resource study completed in 2004 estimated that there is an Inferred Resource of 6.29Mt @ 1.02 Ni and 0.10% Co (COG of 0.6% Ni) at Bell Creek South. The deposit therefore contains in excess of 64,000t of nickel and 400t of cobalt metal. Cross Section through the central part of the of the Bell Creek South Lease.

For further information regarding the drilling programme at the Bell Creek South Lease, see related ASX release dated 17 June 2005. Heap Leach Nickel Metallurgical Testwork Metallica’s current development objective for NORNICO is to evaluate the latest heap leach processing techniques and technologies and apply them to the NORNICO deposits. MLM believes that the overall nature of and setting of the laterite ore types will be suitable for heap leaching. To further this objective MLM has secured the services of Hydrometallurgical Research Laboratories (HRL) in Brisbane to conduct Heap Leach testwork on Ni laterite ores from its NORNICO Project. MLM has also retained Aker Kvaerner Australia Pty Ltd to oversee and interpret the results of the testwork and complete a Scoping Study for the NORNICO Heap Leach project. Metallurgical testwork on the Minnamoolka ore is ongoing with preliminary testwork completed and column test work being initiated, preliminary work has commenced on samples from Bell Creek South and Dingo Dam. Heap leach testwork on the Minnamoolka ore has proved to be very positive, key points of the work completed to date are:

Nickel extraction rates of 80% have been achieved from diagnostic laboratory tests with lower than expected acid consumption rates.

In laboratory test approximately 50% of the nickel was released into solution (extracted from the ore)

within the first 6 days.

Compression tests on agglomerated nickel ore indicate that 4m heap heights are achievable without reducing percolation rates.

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A three meter high column containing agglomerated Minnamoolka ore has been set up at HRL and results will be released as they become available. Work will commence on additional columns once indicative results and the performance of this initial column has been assessed. For further information regarding Metallica’s Heap leach strategy, and testwork results see related ASX releases dated 17 February 2005 and 17th of June respectively. Kokomo The Kokomo prospect comprises a 16 km long lateralised ultra mafic unit which is prospective for Ni-Co and Sc and also platinoid and copper – gold mineralisation. Details and results or the Kokomo drilling programme are included in the Scandium section of this report.

NORNICO - Key Work Planned to 30 September 2005

Initiate regional exploration programme and compilation under planned BHP Billiton joint venture seeking Ni-Cu-PGE sulphide and Cu-Au deposits within the NORNICO North tenements, including air-borne gravity-electromagnetic and magnetic surveys.

Progress Metallurgical - Atmospheric nickel heap leach testwork on representative samples from Bell

Creek, Minnamoolka and the Dingo Dam – Lucky Break nickel laterite project using Hydrometallurgical Research Laboratories and Aker Kvaerner in Brisbane.

Additional Resource Definition Drilling at Minnamoolka and Bell Creek Northwest to increase the extent

of the known mineralisation.

Drill data from the November 2004 and May 2005 Drilling at Minnamoolka to be used for an initial Resource estimate for Minnamoolka

Compile GIS and map-info data on the NORNICO South EPM’s to be followed up with a regional

exploration programme which will include soil and rock chip sampling and the use of a hand portable XRF machine to obtain multi element geochemical data.

Site visit to the Dry River copper prospect within the Greenvale North EPM for the purpose of drill site

selection. NORNICO ILUA Update Metallica has negotiated an Indigenous Land Use Agreement (ILUA) with the Gugu Badhun People. The ILUA was signed in Townsville on the 24th February 2005 and covers all of Metallica’s southern NORNICO tenements from Broken River in the south to the Burdekin River in the North. The ILUA is currently before the National Native Title Tribunal (NNTT) and MLM expects to receive signed approval from the NNTT in August 2005. Lucky Break Nickel Project (Comprises EPM’s 14392 and 14658, MDL 312 and ML Application 10324) The Lucky Break nickel project is located 140 km from the Yabulu Nickel refinery via the Herveys Range Development Road. Metallica’s initial intention was to extract high grade nickel laterite ore from the Dingo Dam Prospect and truck it to the nearby Yabulu Nickel Refinery which currently processes imported nickel laterite ores from New Caledonia, Indonesia and Philippines. To date no sales agreement with QNI Ltd (the owners of Yabulu) has been negotiated and after excellent preliminary heap leach testwork on the Minnamoolka ores (see ASX release 17 June 2005) and a review of the NORNICO heap leach nickel development strategy it is proposed that Lucky Break should now be considered for Heap Leach nickel evaluation and development. Management believes that despite missing the opportunity for early cash-flow from direct trucking of unprocessed high grade Ni ore sales the company will be in a better position because it enhances the NORNICO heap leach development strategy and if development proceeds it would generate significantly more revenue, as

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the majority of the Dingo Dam resource can be exploited as opposed to a discrete high grade pod which conforms to QNI – Yabulu specifications. FIGURE 4: LUCKY BREAK / DINGO DAM NICKEL LATERITE PROJECT LOCATION

Lucky Break Exploration Activities Exploration activity carried out at Lucky Break in the June Quarter comprised the drilling of two HQ diamond holes for 58m to obtain material for Metallurgical testwork. The two holes twinned existing Aircore holes (DD-56 and DD-47), which intersected 29 m @ 2.21 % Ni and 0.04% Co from 2m and 15m @ 1.52% Ni and 0.12% Co from 8m respectively. There was strong correlation between the two diamond holes and the Aircore holes with DDDDH-01 (twin of DD-56) intersecting 30m @ 2.21% Ni and 0.04% Co from 2m and DDDDH-02 (twin of DD-47) intersecting 18m @ 1.49% Ni and 0.11% Co from 7m. Material from these holes have been despatched to Hydro Metallurgical laboratories in Brisbane and Nickel heap leach testwork has been initiated. Dingo Dam Resource Update An updated resource estimate has been completed for the Dingo Dam deposit which includes the additional 104 holes drilled at the deposit since November 2004. The Dingo Dam Resource has increased to a Measured and Indicated Resource of 566,000 tonnes at 0.91% Ni and 0.06% Co (using a 0.35% Ni COG) containing 5100t of nickel, including a high grade zone of 211,000 tonnes @ 1.45% Ni and 0.10% Co (using a 1% Ni COG). The resource is based on 172 RC drillholes totalling 3,368m and drilled to an average depth of 20m. For further information, see ASX release dated 19 July 2005.

Key Activities Planned for the Lucky Break Nickel Project

Progress Mining Lease Application over the Dingo Dam resource area towards grant by late 2005

Progress Compensation and Access Agreement with Landowner – to be negotiated in August 2005

Complete initial column leach testwork simulating heap leach processing of the nickel laterite ore in parallel with the Bell Creek and Minnamoolka testwork as part of the NORNICO Heap Leach Ni Project.

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Further drilling to increase the nickel resource and to explore regional nickel laterite targets beneath Tertiary cover.

Significance of Lucky Break Project to Metallica Minerals The Dingo Dam resource is approximately 350m long, 60m wide and 20m in thick, the majority of which would be recoverable in a single shallow open pit. It is expected that the Dingo Dam deposit will have a good gangue makeup of low iron (14% Fe) and low magnesium (4% Mg) for heap leaching and is favourably located close to infrastructure, market (Yabulu Nickel refinery) and reagents (Sun Metals acid supply). Even as a modest size resource, Dingo Dam contains 5,100 tonnes of nickel and 340 tonnes of cobalt with an in-ground metal value of approximately $110 million. Assuming a 75% average nickel recovery to a marketable grade Ni – Co concentrate and a 75% price paid for the LME Ni + Co value, the potential revenue of the current resource is approximately $60 million (using current metal prices and US$ exchange rates).

2. COAL PROJECTS Kingaroy Coal Project (100% - EPC 882) MLM through its wholly owned subsidiary SE QLD Energy Pty Ltd holds EPC 882 which includes the Taabinga coal resource and other drilled coal prospects within the Tarong Basin. The 181.9 Mt Measured and Indicated Taabinga coal Resource is strategically located 25 km from the Tarong Power Station, the largest power station in Queensland. Corporate Activity

On the 23 March 2005, MLM signed a formal Heads of Agreement with InterCOAL (INL) for the divestment of MLM’s Kingaroy Coal project (EPC 882) which includes the Taabinga Measured & Indicated thermal coal Resource of 181 Mt. INL has proposed to acquire 100% of SE QLD Energy Pty. Ltd, a subsidiary of Metallica, for share consideration valued at $6 million, based on the issuing of 30 million shares at an issue price of 20 cents each. INL will also issue Metallica 30 million options to acquire shares in Internickel at 20 cents exercisable on or before June 30, 2009. A deed of royalty already exists over EPC 882 whereby the holder of the tenement is to pay Metallica a royalty of $0.40 per ton of any coal produced and this arrangement will remain in perpetuity for the benefit of Metallica. The above transaction is conditional on a number of items, including the re-listing of INL on the ASX and the raising of the necessary funds from the InterCOAL Prospectus. Should this occur Metallica will hold approximately 40% of the issued capital of InterCOAL. However, if the conditions of the agreement are not achieved Metallica will revert to its original plan outlined in the September 2004 prospectus and progress the development of its coal assets as further funds become available or to pursue other options to advance these projects. As indicated in the highlights of this report, the InterCoal prospectus has been withdrawn and a separate release will be made by Metallica. The net result is that Metallica will retain a 100% interest in the Kingaroy Coal Project. For further information, see related ASX release dated 7th June 2005. Exploration Activities No fieldwork was completed on the Kingaroy coal project during the June Quarter.

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The Condamine Coal Project After a comprehensive review of coal projects in Queensland, Metallica lodged, and was granted, 3 Exploration Permits for Coal, EPC 935 “Condamine”, EPC 936 “Allora” and EPC 963 “Killarney”. These three tenements comprise Metallica’s Condamine Coal Project (CCP). The CCP tenements cover an area of 284 sub-blocks (approx 870 sq km) over established coal bearing areas from Millmerran to Felton to Warwick. Figure 5: The Condamine Coal Project – Tenement Map

The CCP is favourable located with respect to:-

Established coal mining operations and support services The Millmerran, Tarong and Tarong North thermal coal powered stations Major road and rail infrastructure. The possible consideration of a future coal fired power station in the Warwick region.

In May 2005 Metallica Minerals signed a legally binding letter of agreement with InterCOAL giving INL an exclusive option to enter into a Joint Venture agreement with MLM to earn a 70% interest in the CCP. A summary of the conditions of the agreement are listed below.

The obligations of INL under the agreement are conditional to INL achieving a successful listing on the

ASX by September 2005. INL must pay MLM an option fee of $30,000 within 7 days of the listing date. The option period is for 6 months from the date of listing INL must expend a minimum of $60,000 during the option period INL can earn 51% of the CCP by spending $1,000,000 in exploration expenditure within 4 years.

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Within 14 days of INL earning a 51% interest in the CCP, INL can elect to earn 70% by spending an additional $1,000,000, or by either completing a Feasibility Study or deciding to mine within the CCP tenements.

MLM has formed a new company SE QLD Coal to hold the three tenements which comprise the CCP.

This agreement only becomes effective on INL raising the funds proposed under the INL Prospectus lodged with the ASIC on 3 June 2005.

As indicated in the highlights of this report the InterCoal prospectus has been withdrawn and a separate release will be made by Metallica. The net result is that Metallica will retain a 100% interest in the Condamine Coal Project. For further information, see related ASX release dated 12th May 2005. 3. BAUXITE PROJECTS Cape Alumina Corporate Activity

Metallica Minerals successfully completed the following transactions with Anegada Metals Corporation Ltd (“Anegada”) on 23 2005.

Anegada made a $1.86 million investment in Metallica Minerals, with 9.3 million shares being issued by Metallica at 20 cents, (which equates to 13.02% of the expanded capital of the company), and a $200,000 placement in Cape Alumina Pty. Ltd (“Cape Alumina or Cape”) for a 10% holding in Cape Alumina.

Cape acquired 100% of Aldoga Minerals Pty. Ltd from Anegada (which holds the Kimberley WA

bauxite project) for a further 40% holding in Cape Alumina.

Anegada and Metallica now both hold a 50% stake in Cape Alumina. The newly merged company, Cape Alumina has a large portfolio of bauxite prospects in the Weipa – Aurukun region of Far North Queensland and in the Kimberly Region of WA. It is Cape’s intention to expedite progress on its bauxite projects and complete an Initial Public Offering (IPO) to list Cape on the ASX or elsewhere within 12 months. The key terms of the transactions are summarised on ASX release dated 23rd May 2005. Significance of Proposed Transaction to Metallica Minerals It is the intention of Cape Alumina to define a combined critical mass of at least 300 Mt of bauxite suitable for direct shipping to alumina refineries in Australia and overseas and also to underwrite development of an alumina refinery. The combined company’s bauxite deposits in Cape York and the Kimberley are expected to be complimentary for blending to produce bauxite feed grades suitable for alumina production. The directors of Metallica/Cape believe that the expanded entity has potential to develop an integrated bauxite/alumina company-making project, in which Metallica is expected to hold a 50% interest prior to a proposed listing of Cape Alumina. Weipa-Aurukun Bauxite Project Cape Alumina has substantial tenement applications in the Weipa—Aurukun region, see Figure 6, and has an exclusive Mineral Rights Sharing Deed with Sigma Kaolin Ltd and its subsidiary Norkay Pty Ltd which has in excess of 500 sub-blocks in the Bamaga-Weipa-Aurukun region under application. Cape’s tenements and mineral right tenements cover extensive bauxite deposits along a 250 km coastal strip centred on Weipa. The tenements are adjoining and along strike of the world-class bauxite reserves and mining operations within the Alcan and Comalco mining leases and the Aurukun bauxite deposits. Cape’s combined tenement areas cover extensive areas of mapped bauxite and aluminous laterite (>800 sq km) which have only been partly explored by drilling in the 1960’s-70’s. These tenements cover the majority of mapped bauxite outside the Comalco – Alcan – Aurukun Mining leases granted in the 1960’s and 70’s.

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Exploration & Tenure Activities After further project evaluation and compilation during the March Quarter, Cape Alumina applied for one additional EPM at Vrilya Point which contains significant bauxite deposits adjacent to the northern most part of ML 7024 which is held by Comalco. Figure 6 Cape Alumina Pty Ltd Tenement interests on Cape York

Cape has initiated discussions with traditional landowner groups (TLO) with site visits to the Weipa, Injinoo and Napranum and Mapoon regions undertaken in July 2005. Discussions were held with the traditional landowners and trustees on access issues in order to expedite the application process to gain tenure of the ground so exploration activities can begin. It is now envisaged that exploration drilling is likely to commence at the start of the next dry season, (April 2006). Paul Messenger (General Manager Cape Alumina) pointing to an exposure of free flowing pisolitic bauxite in the Weipa Project Area.

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Cape Alumina is undertaking a conceptual scoping study on the Cape York Bauxite Project to assess viable options for mining, beneficiation, trucking and shipping to export markets. Kimberley Bauxite Project Aldoga Minerals has previously completed a $2M scoping study on its Kimberley Bauxite Project and has defined Indicated and Inferred Mineral Resources of bauxite at its Kalumburu tenement in the Kimberley region of WA. The scoping study indicated a bauxite mining operation could be viable but may be dependant on further exploration success in the companies other project areas. Cape Alumina believes that the lower silica Kalumburu bauxite may be suitable for blending with bauxite from Cape York which has a higher alumina content to produce a suitable feed for commercial alumina production. No field work was carried out on these tenements in the last quarter; however the Mt Leeming tenement is in the processes of being surrendered. Kingaroy Bauxite Project (EPM 14639 & 14514) Shallow auger drilling was carried out at Kingaroy in June 2005, to test for shallow bauxite resources in the Kingaroy area of Southeast Queensland. The Kingaroy region was considered prospective for bauxite beneath extensive red clay soils by government geologist particularly where they developed over basalt. Work by the Geological Survey of Queensland in the 1940’s and 1950’s identified several areas around Kingaroy which returned assays high in soluble alumina, i.e. to 56% soluble Al2O3, with a further 14 samples taken in the Kingaroy region averaging more than 35% soluble Al2O3 Cape Alumina drilled a total of 44 shallow 100 mm (in diameter) auger holes in areas considered prospective for bauxite, some of the auger holes were drilled as close as possible to sites of interest identified in earlier work by the Geological Survey of Queensland. The holes were drilled to a maximum depth of 12m with the majority of holes averaging depths of 6 to 8m. A total of 140 samples were collected and assayed in Perth by SGS laboratories to determine the available alumina and soluble silica in each sample. The best result was recorded in Hole KA-08 which intersected up-to 30% soluble Alumina and 5.2% reactive silica. However the majority of the samples contained between 0.5% and 15% Soluble Alumina and 20 – 30 % reactive silica. The low alumina content and high reactive silica indicates that it is unlikely that an economic bauxite resource will be identified in the Kingaroy region. In light of these results Cape Alumina has decided to relinquish EPM 14639 and abandon its adjoining application for EPMA 14514 and concentrate on its North Australian Bauxite Projects. 4. SCANDIUM PROJECT Kokomo Scandium Project (EPM 10699, Straits can earn a 70% interest in the Scandium Project) MLM and their Joint venture partners Straits Resources Ltd (Straits) have a high grade scandium (Sc) deposit associated with Ni-Co laterite mineralisation within the Kokomo EPM (EPM 10699). Straits can earn up to a 70% interest in the scandium project by expending $1.4M. To date Straits have earned a 10% interest in the project after expending $200,000. Exploration Activities Prior to 2005, drilling at Kokomo defined an open ended zone of high grade scandium mineralisation averaging 170 g/t Sc, within a 300m by 50m area. In the June quarter Metallica and Straits completed a combined drilling programme at Kokomo to test Ni, Co (Metallica) and Sc (Straits) soil anomalies identified in a -80# soil sampling programme completed in August 2004. A total of 18 holes were drilled for 573m. Significant and high grade nickel-cobalt and scandium laterite mineralisation was intersected in the Kokomo central plateau area. Highlights from the drilling include:

• KK-49, 34m (15-49m EOH) @ 0.90% Ni and 0.34% Co • KK-51, 9m (0-9) @ 0.71% Ni and 0.36% Co • KK-49, 19m (0-19m ) @ 178 g/t Sc • KK-54, 17m (0-17m) @ 182 ppm Sc

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Hole KK-49 contained both high grade Sc and Ni – Co mineralisation and highly anomalous gold-barium-bismuth-beryllium-copper and zinc mineralisation. The hole terminated in a strongly lateritised and mineralised (Ni – Co) zone which was anomalous in Au with the last 13m, (36-49m) recording 0.27 g/t Au. Results from the May drilling indicate that the high grade scandium zone discovered in 2000 is laterally extensive along strike with holes KK-49 and KK-54 drilled 600m north and south of this zone respectively recording high scandium grades. The drilled extent of the high grade scandium mineralisation on the eastern side of the Kokomo ultramafic is approximately 1.7 km long, with additional along strike potential remaining. Drill hole locations and significant intercepts are presented in Figure 7. Figure 7 Kokomo- May 2005 Drill Hole Plan

For further information, see related ASX release dated 14 July 2005. 5. LIMESTONE PROJECTS MLM holds several high quality and strategically located limestone deposits at Boyne and Fairview (near Gladstone), and Star (near Townsville). No exploration activities were completed on these projects during the June quarter. Metallica is planning to secure the large high grade Boyne Limestone deposit with a Mining Lease application in the next 3 months.

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6. GOLD & OTHER PROJECTS MLM’s principle gold interest centres on the Six Mile gold project within the NORNICO region. This area comprises the Kokomo Gold Sub-Block within the Kokomo EPM and the adjoining Six Mile EPM, both of which are in joint venture with Straits. A considerable portion of the NORNICO project area is also prospective for precious and base metals, eg Rudd Creek prospect and Greenvale North tenement including the Dry River copper prospect. MLM also holds the Texas North and the Warwick West gold-silver projects close to a proposed silver-gold mine near Texas. The Prospect project is prospective for titanium (eg a previous explorer had a drill intercept which recorded 98m @ 15% TiO2) and a range of other minerals including PGE, gold, tantalum-niobium, nickel and basemetal sulphides. Exploration Activities Straits Resources completed a 10 day mapping and sampling programme at Six Mile Creek in April - May 2005. The programme concentrated on mapping and rock chip sampling 4 highly ranked prospects in a 12km long corridor within the Six Mile EPM and the Kokomo sub-block. The object of the mapping and sampling was to determine the lithological and structural controls on the gold – silver mineralisation at these prospects in the Six Mile Creek project area and to identify depositional sites for bulk tonnage or bonanza grade deposits which can be tested by subsequent drilling. Planned Activities

The field work completed by Straits at Six Mile identified 9 drill targets which require testing. A 1520m drilling programme has been planned for this area and will commence when a drilling rig becomes available. Further field work will be undertaken at Six Mile prior to drilling to follow up and expand on the May programme.

An Airborne EM – Gravity survey will be completed over the Prospect Project in August, the

survey will cover the main aeromagnetic features identified by earlier work and it is expected that suitable drill targets will be identified.

A regional rock chip and a prospect scale mapping programme is planned for the Texas – Warwick

region to generate drill targets.

16

TENEMENT SCHEDULE (as at 30th June 2005)

Nickel – Cobalt Projects

Tenement Project Name Holder/ Applicant Status (Expiry date) No. Sub Block

Principal Commodity Targeted

Min. Annual Expenditure

ML 4187 Bell Creek South Lease QLD Gold Pty Ltd Granted (29/2/2020) 71.35 Ha Ni , Co

ML 4188 Bell Creek North Lease QLD Gold Pty Ltd Granted (29/2/2020) 98.11 Ha Ni , Co

MDL 312 Dingo Dam QLD Gold P/L Granted (31/12/2006) 74.34 Ha Ni , Co

MLA 10324 Dingo Dam QLD Gold P/L Application (07/4/05) 36.17 Ha Ni , Co

EPM 10235 Minnamoolka QLD Gold Pty Ltd Granted (8/9/2006) 5 Ni , Co $70,000

EPM 10699 Kokomo QLD Gold Pty Ltd Granted (21/8/2006) 21 Ni , Co, Sc, Au $100,000

EPM 11285 Bell Creek QLD Gold Pty Ltd Granted (21/8/2006) 8 Ni , Co $70,000

EPM 13663 Minnamoolka Ext. QLD Gold Pty Ltd Granted (12/6/2006) 3 Ni , Co $20,000

EPM 14101 Mt Garnet South QLD Gold Pty Ltd Granted (22/12/2008) 125 Ni , Co, Au, PGE $40,000

EPM 14273 Moonmyata QLD Gold Pty Ltd Granted (22/12/2008)

8 Ni , Co, Au , PGE $12,000

EPM 14066 Greenvale South QLD Gold Pty Ltd Granted 22/08/2009

68 Ni , Co, PGE $35,000

EPM 14070 Greenvale North QLD Gold Pty Ltd Granted 22/08/2009

100 Ni , Co, Cu, Au $45,000

EPM 14181 Lucky Downs QLD Gold Pty Ltd Granted 22/08/2009

18 Ni , Co, Cu $15,000

EPM 14381 Greenvale South 2 QLD Gold Pty Ltd Granted 15/12/2004

62 Ni , Co, Cu $40,000

EPM 14518 Mt Garnet South #2 QLD Gold Pty Ltd Granted 15/2/2005

193 Ni , Co, Au, Cu $40,000

EPM 14392 Lucky Break QLD Gold Pty Ltd Granted (29/6/2009)

43 Ni , Co $30,000

EPM 14658 Yellow Jack QLD Gold Pty Ltd Granted (26/6/2010)

50 Ni , Co $25,000

EPMA 14987 Sandy Creek QLD Gold Pty Ltd Advertised Expedited Procedures

70 Ni , Co $30,000

Coal Project Tenement Project Name Holder/ Applicant Status No.

Sub Commodity Targeted Min.

Annual

EPC 882 Kingaroy Coal SE QLD Energy Pty Ltd Granted (26/09/2009) 64 Open Cut Thermal Coal $40,000

EPC 935 Condamine Coal Metallica Minerals Ltd Granted (24/05/2005) 114 Open Cut Thermal Coal $50,000

EPC 936 Allora Coal Metallica Minerals Ltd Granted (04/05/2005) 130 Open Cut Thermal Coal $60,000

EPC 963 Killarney Coal Metallica Minerals Ltd Granted (22/06/2005) 40 Open Cut Thermal Coal $30,000

Bauxite Projects

Tenement Project Name Holder/ Applicant Status No. Sub

Commodity Targeted Min. Annual Expenditure

EPM 14639 Kingaroy Bauxite Cape Alumina Pty Ltd Relinquished N/A Bauxite N/A

EPMA 14514 Kingaroy Bauxite N Cape Alumina Pty Ltd Abandoned N/A Bauxite N/A

EPMA 14547 Weipa Bauxite Cape Alumina Pty Ltd Application 100 Bauxite N/A

EPMA 15012 Mappoon Bauxite Cape Alumina Pty Ltd Application 82 Bauxite-Kaolin N/A

EPMA 15018 Weipa East Bauxite Cape Alumina Pty Ltd Application 35 Bauxite N/A

EPMA 15019 Aurukun Bauxite Cape Alumina Pty Ltd Application 11 Bauxite N/A

EPMA 15054 Hey Point Bauxite Cape Alumina Pty Ltd Application 31 Bauxite, HMS N/A

EPMA 15080 Skardon R. Bauxite Cape Alumina Pty Ltd Application 20 Bauxite N/A

EPMA 15111 Vrilya Point Cape Alumina Pty Ltd Application 98 Bauxite N/A

17

Limestone Project

Tenement Project Name Holder/ Applicant Status No. Sub Block

Commodity Targeted

Min. Annual Expenditure

ML 10276 Star Limestone Metallica Minerals Ltd Granted (30/4/2023) 18.54 Ha Limestone N/A

EPM 13423 Boyne Limestone Metallica Minerals Ltd Granted (1/1/2006) 6Limestone $45,000

EPM 13756 Fairview Limestone R.W. Siller Granted (10/12/2004) 2Limestone $15,000

EPM 14042 Fairview Extended R.W. Siller Granted (23/10/2005) 4Limestone $15,000

Gold, PGE, Other Projects Tenement Project Name Holder/ Applicant Status No. Sub

Block Commodity

Targeted Min. Annual Expenditure

EPM 13873 Six Mile QLD Gold Pty Ltd Granted (10/12/2007) 100 Gold, Copper $70,000

EPM 14406 Prospect Oresome Australia Pty Ltd Granted (19/12/2009) 83 Ti, Au ,PGE Diamonds

$30,000

EPM 14477 Texas North Oresome Australia Pty Ltd Granted 22/08/2009 100 Au, Ag $40,000

EPM 14478 Warwick West Oresome Australia Pty Ltd Granted 22/08/2009 118 Au $40,000

Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 1

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity

Metallica Minerals Limited

ABN Quarter ended (“current quarter”)

45 076 696 092 June 30, 2005

Consolidated statement of cash flows

Cash flows related to operating activities

Current quarter $A’000

Year to date ( 12 months) $A’000

1.1 Receipts from product sales and related debtors

26 81

1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration

(371) (295)

(907) (781)

1.3 Dividends received 1.4 Interest and other items of a similar nature

received 36

89

1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) (223) Deferred fees

Net Operating Cash Flows (604)

(1,741)

Cash flows related to investing activities

1.8 Payment for purchases of: (a)prospects (b)equity investments (c) other fixed assets

(5)

(18)

1.9 Proceeds from sale of: (a)prospects (b)equity investments (c)other fixed assets

1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material)

Net investing cash flows (5) (18)

1.13 Total operating and investing cash flows (carried forward)

(609) (1,759)

Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. Appendix 5B Page 2 30/9/2001

1.13 Total operating and investing cash flows

(brought forward) (609) (1,759)

Cash flows related to financing activities

1.14 Proceeds from issues of shares, options, etc. 1,767 4,455 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows 1,767 4,455

Net increase (decrease) in cash held

1,158

2,696

1.20 Cash at beginning of quarter/year to date 2,015 477 1.21 Exchange rate adjustments to item 1.20

1.22 Cash at end of quarter 3,173 3,173

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

Current quarter $A'000

1.23

Aggregate amount of payments to the parties included in item 1.2

67

1.24

Aggregate amount of loans to the parties included in item 1.10

NIL

1.25

Explanation necessary for an understanding of the transactions

Non-cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated

assets and liabilities but did not involve cash flows

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the

reporting entity has an interest

Financing facilities available Add notes as necessary for an understanding of the position.

Amount available $A’000

Amount used $A’000

3.1 Loan facilities

Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. 30/9/2001 Appendix 5B Page 3

3.2 Credit standby arrangements

Estimated cash outflows for next quarter

$A’000 4.1 Exploration and evaluation

$400

4.2 Development

Total

$400

Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.

Current quarter $A’000

Previous quarter $A’000

5.1 Cash on hand and at bank 1,623 490

5.2 Deposits at call

5.3 Bank overdraft

5.4 Other (provide details)-Term Deposits 1,550 1,525

Total: cash at end of quarter (item 1.22) 3,173 2,015

Changes in interests in mining tenements Tenement

reference Nature of interest (note (2))

Interest at beginning of quarter

Interest at end of quarter

6.1 Interests in mining tenements relinquished, reduced or lapsed

14639 EPM EPM NIL

6.2 Interests in mining tenements acquired or increased

935 936 963 14658

EPC EPC EPC EPM

EPCA EPCA EPCA EPMA

EPC EPC EPC EPMA

Appendix 5B Mining exploration entity quarterly report

+ See chapter 19 for defined terms. Appendix 5B Page 4 30/9/2001

Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates. Total number Number quoted Issue price per

security (see note 3) (cents)

Amount paid up per security (see note 3) (cents)

7.1 Preference +securities (description)

7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions

7.3 +Ordinary securities

71,413,752 56,450,652

7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs

9,300,000

9,300,000

7.5 +Convertible debt securities (description)

7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted

7.7 Options (description and conversion factor)

3,927,376 Listed Options 6,622,750 Unlisted escrowed options

Exercise price 25 cents 20 cents

Expiry date 31 December 2006 31 December 2006

7.8 Issued during quarter

7.9 Exercised during quarter

7.10 Expired during quarter

7.11 Debentures (totals only)

Appendix 58Mining €xploration entity quarterly report

'7.12 Unsecur€dnot€s {/otrrr

Compliance statement

This statement has been prepar(accounting standards as defined irto ASX (see nole 4).

This statement does give a true an

d under accounting policies which comply withthe Corporations Act or other standards acceptablc

I fair view ofthe matters disclosed.

SiBn herei

Print name:

Notes

.JOHN KEVIN HALEY

The quarterly report provides aactivities have been financed forAn cntity wanting to disclose addor notes attached to this rcport.

The "Nature of interesl" (items 6.mining tenements acquired, exertentity is involved in a joint venlwhich will change its percentagechange of percentage interest anc6.1 and6.2.

Issued and quoted securities Tlitems 7.1 and 7.3 for fully paid se(

The definitions in, and provisihtdustries aod AASB 1026: Staten

Accounting Standards ASX $Accounting Standards for foreigrtopic, the Australian standard on t

o*,, 4.r-k.tfa"','

basis for informing the market how the entity'she past quaner and the effect on ils cash position.tional information is encouraged to do so, in a note

I and 6.2.) in€ludes options in re\pect of interests rnised or lapsed during the reporting period. If thcure agreement and there are conditions precedentnterest in a mining tenement, it should disclose thecondit ions precedent in the l i . t required lor i lem\

e issue price and amount paid up is not required inuntles.

ons of, ,4ASB 1022: A.coktting for Extructiv(ent of Cash Flovs apply to this report.

ill accept, for example, the use of lntemationali entities. If the standards used do not address ,trat topic (ifany) must be complied with.

+ See chapter 19 ibr defined terms

30/9/200r

ldj)ll 1- r)cd

Appendix 58 Page 5