New Nickel-Cobalt Resource Upgrade Boost For Metallica Minerals (ASX:MLM) Flagship NORNICO Project

Brisbane, Jan 27, 2010 AEST (ABN Newswire) - Metallica Minerals Ltd (ASX:MLM) is pleased to announce that an updated independent resource estimate has been completed for the Kokomo Nickel - Cobalt - Scandium Laterite deposit, which is located 40 km north of the Township of Greenvale in North Queensland.

The combined Measured, Indicated and Inferred Mineral Resource for the entire Kokomo Ni - Co - Sc laterite project now stands at 16.3 Mt @ 0.67% Ni and 0.12% Co (using a 0.70% NiEq cut-off) this is an increase of 4.1 Mt from the 2008 resource estimate which had similar grades with a major increase in the Measured and Indicated categories, which have increased to 13 Mt (up from 5.2 Mt).

The scandium resource within the Kokomo Laterite deposit is subject to a Joint Venture (JV) agreement with Straits Resources Exploration Limited (ASX:SRL), under the terms of the JV all scandium resources are to be mined or stockpiled separately and kept for later processing by the Scandium JV. Laterite resources are classified as either Ni-Co ore or Sc ore under a formula laid out under the terms of the Scandium JV agreement. As a result of this the total Kokomo resource is separated into two mutually exclusive parts.

The Scandium resource as defined by the JV is currently owned 80% by Metallica and 20% by Straits. The Scandium resource does contain some isolated zones of higher grade Ni-Co resource excluded from the Ni-Co resource.

The Ni-Co and scandium resources are near surface (<50 m depth) and are appropriate for a selective open pit mining scenario studies; however the resources do not account for mining dilution.

The resource was completed using data from a total of 1,058 drill holes comprising 26,384 individual assays. The bulk of the deposit has now been drilled out on a nominal 50 m (North-South) by 40 m (East-West) grid that is sufficient to classify the resource as predominantly Indicated. Where the drilling has been completed on an approximate 25 m (North-South) by a 20 m (East-West) grid the resource has been classified as Measured.

Resource Estimate Methodology

Ordinary Kriging (OK) for 10 m by 10 m by 1 m blocks was carried out in the mineralised zones using unfolding techniques to represent the paleo-laterite surfaces between drill holes, the paleo laterite surfaces were wire-framed from sectional interpretations of the considered logged geology and nickel, cobalt, iron, magnesium and manganese assays. A nominal (0.30% Ni only) mineralised envelope was used to constrain the laterite mineralisation and grade estimates using a hard boundary.

The mineralised wireframe was then filled with 10m by 10m by 1m blocks, with the grades of the various elements estimated by ordinary kriging using a three pass search strategy and a maximum of 3 composites selected from any one drill hole.

Mineralisation was extrapolated a maximum of 25 m from drill hole intercepts, depending on supporting information.

Three areas of the Kokomo deposit have been subjected to close spaced drilling which have resulted in Measured Resources, these areas are referred to as Wild Honey (scandium rich zone), Mona (nickel-cobalt rich zone) and Blueberry (narrow nickel-cobalt rich zone.

Future Planned Work at Kokomo

- Progress permitting of the Kokomo Mining Lease application.

- Complete wet season flora and fauna study.

- Metallurgical test work on scandium and nickel - cobalt rich material from Kokomo is ongoing.

- A scoping study into trucking high grade scandium and nickel - cobalt ore to a possible processing plant located at Greenvale for supplementary feed (NORNICO stage 1).

- Preliminary mine planning and scheduling for a small scale high grade Ni-Co-Sc and mining operation at Kokomo is being considered as an option.

- Negotiations with the Native Title claimants for Kokomo are being initiated.

For the complete Metallica Minerals ASX Announcement including Tables and Figures, please click the link below:

http://www.abnnewswire.net/media/en/docs/62151-ASX-MLM-217697.pdf

Contact

Mr Andrew Gillies Managing Director Metallica Minerals Ltd Tel: +61-7-3891-9611