Metallica Minerals is looking forward to starting bauxite production by the first half of 2017. Metallica CEO, Simon Siesarewich said in a recent interview that the company is likely to have the approvals in place over the wet season 2016/17. Since that is not the right time up around Weipa to be producing a new mine, so they'll wait untill rain stops and then go into production.
Metallica is an ASX listed resource company with a market cap of about $7 million or $8 million. Presently, they are focused on their direct shipping bauxite project called Urquhart Point, which is up near Weipa in northern Queensland.
The benefit that Urquhart bauxite has is it does not require any infrastructure, Simon pointed out. So therefore, the construction timeframe for this project is likely to be a couple of months and then Metallica will be into cash flow, which is an absolute benefit for any project anywhere.
"Critically, what we’ve done is de-risk the project by delivering a logistic solution. So, 15 kilometres away from Urquhart Point is another small bauxite mine, called Hey Point.
"We’ve executed heads of agreement with Hey Point to do the logistic services, to get our bauxite from land and onto export ships, which will be able to go into the open market. That mine is now in production, i.e. Hey Point’s in production. And we expect to piggyback off the back of their infrastructure, which means again, it’s about low capital and bringing this into market as quickly as possible," Simon updated.
Commenting on Metallica's cash position, Simon said the company is much focused on becoming cash flow positive.
"We will be focused on Urquhart bauxite to produce that cash flow. That will be a game changer for our company. And hopefully we will see a rerating off the back of that, once people understand that we are able to bring a project into market. From that it gives us a great platform to grow on."
"Both organically, there’s a large portfolio of bauxite and mineral sands projects within the joint venture, but also we’ll also be looking outside our normal home, which has been Queensland. We’ll look globally for other projects that add value to shareholders, and take advantage of where the cycle’s at right now," he said.
It is expected that by year end, Metallica will have the mining lease in hand. Once that happens, the company would push towards production, and de-risk that project and bring cash flow in as soon as possible, Simon sounded positive.
