ARIKA RESOURCES LIMITED — Capital/Financing Update 2016

Oct 3, 2016

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ASX RELEASE: 4 OCTOBER 2016

NEW COBALT PROJECT IN THE YERRIDA BASIN WA

New cobalt exploration project (Kyarra Cobalt Project) acquired in the Yerrida Basin, WA

Adjoins Tabac Cobalt-Gold Project where significant intersections include 80m at 0.77% Co[1] Widespread cobalt anomalism reported within Kyarra from sampling and drilling Extensive land holding of over 210km[2] of exploration license applications (ELA’s) Well located adjacent to the Paroo Station Mine and Camp, 40km from Wiluna, WA. Desktop and field exploration underway to identify priority target areas for drilling in 2017

Metalicity Limited (ASX:MCT) (“Metalicity” or “Company”) is pleased to report that the Company has lodged three exploration license applications (ELA’s) covering an area of 210km[2 ] that are considered highly prospective for cobalt mineralization, located in the newly identified cobalt district in the Yerrida Basin of the Northern Goldfields, WA.

The Kyarra Cobalt Project (E51/1755, E51/1756 and E53/1894) lies within the Proterozoic Yerrida Basin on the northern margin of the Yilgarn Craton. The project adjoins the Tabac Cobalt-Gold project where significant intersections of cobalt have been reported including 80m at 0.77% Co and where the location and stratigraphic position of the observed cobalt anomalism is interpreted by others to have numerous similarities to the mineralisation model of the significant copper-cobalt deposits of the Zambian Copper Belt.

Widespread cobalt anomalism exists across the Yerrida basin in historic surface rock chip samples, rotary air blast (RAB) drilling between 20-40m depth, and in diamond core drilling to 388m (Figure 2). The extent of the cobalt anomalism highlights the potential for a significant cobalt mineralising system. Within the Kyarra Cobalt project area anomalous historical results have been reported including up to 0.64% Co from surface samples and 2m at 612 ppm Co from drilling, across an initial strike extent of approximately 25km.

The Kyarra Cobalt project is well located in terms of access and infrastructure for exploration and mining. The project is located on the Goldfields Highway 40km west of Wiluna, 10km west of the Tabac Cobalt-Gold project and the Paroo Station Mine and Camp (Care and Maintenance) in the Northern Goldfields region of WA. The three ELA’s give Metalicity a dominant land holding in this newly identified cobalt district in the Yerrida Basin.

Desktop and field exploration work is underway with compilation of all historical exploration data, acquisition and re-processing of relevant geophysical data, as well as geochemical sampling and field surveys to identify priority areas for drilling once the tenements are granted, which is expected to be in the first half of 2017.

Metalicity Managing Director, Matt Gauci, commented:

“The Yeririda Basin is interpreted to have similarities to the copper-cobalt deposits of the Zambian Copper Belt and widespread cobalt anomalism exists at Kyarra located in a newly identified cobalt district. The existing high sovereign risk supply of cobalt and lithium-ion batteries driven demand, means Metalicity is highly leveraged to exploration success at Kyarra. The project is also complementary with our portfolio of lithium and graphite projects also located in WA”.

Metalicity Limited ASX Code: MCT ABN: 92 086 839 992

www.metalicity.com.au 6 Outram Street West Perth WA 6005

Regional Geology

Yerrida Group rocks are flat-lying to shallowly dipping and unconformably overly Archaean granite greenstones to the south, including the N-S trending Joyner’s Find Greenstone belt immediately to the east of the tenements; where various steeply dipping greenstone lithologies including mafic volcanics, BIFs and other sediments host a number of Fe and Au prospects. The Yerrida Group comprises an early sag-basin succession dominated by siliciclastic and evaporitic sediments deposited in a shallow-water environment (Windplain Subgroup – Juderina and Johnson Cairn Formations), overlain by arenaceous, argillaceous and mafic volcanic rocks (Mooloogool Subgroup). These rocks are unconformably overlain by Earaheedy Basin sediments of the Yelma Formation.

The units of interest within the Project area are carbonaceous and calcareous, pyritic shales and siltstones of the Maraloou Formation. Zones of limestone breccia and stromatolitic limestone are present at the base of this unit, in mineralised zones observed in diamond core (Australian Consolidated Minerals, 1984).

Figure 1: Metalicity Cobalt and Lithium Exploration Projects

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Mineralisation

The Yerrida Basin sedimentary package also contains a number of the key elements necessary for SEDEX style base metal mineralisation, including evaporites, siliciclastics, hydrocarbons and basin bounding faults. Extensive exploration activities were completed in the late 1980’s and 1990’s focussed on discovery of base metal deposits using this model. Within the area that includes the Kyarra Cobalt Project approximately 2000 surface geochemistry samples, 770 RAB holes (0-96m deep), 116 RC holes (4-250m deep) and 9 diamond drill holes (75-405m deep) were completed by various operators including Renison Goldfields Consolidated (RGC). Anomalous Cu, Zn, Pb, Ni and Co detected in surface geochemistry and drilling culminated in the discovery of the Magellan (now Paroo Station) Lead deposit 12km east of E53/1894.

Figure 2: Kyarra Project Tenure over regional geology showing historic assay results from DMP database

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Previous Exploration

Anomalous cobalt encountered as part of the extensive previous exploration efforts within the project area is summarised in Figure 2 and includes:

• diamond hole PP011 drilled by Australian Consolidated Minerals Ltd in 1984 8km east of E53/1894 intersected 80m @ 0.77% Co (5150ppm-1.47% Co) from 170m in dolomitic and carbonaceous arenites and argillites +/- breccia.

• 2km east of E53/1894 diamond hole PP009 drilled by Australian Consolidated Minerals Ltd in 1984 intersected 30m @ 0.3% Co from 358m in dolomitic and carbonaceous arenites and argillites +/- breccia.

• RAB drilling by RGC intersected coincident Co and Ni anomalies in CRB109, 112 (2m @ 612ppm Co, 1210ppm Ni, 3500ppm Zn from 28m) and 382 at the Conquistador 1 Prospect. These probably represent supergene concentrations of underlying material.

Adjacent tenement holders, Dragon Energy Limited (Figure 2) have proposed a model whereby cobalt and other metals transported by migrating brines precipitated when they came into contact with carbonaceous shales. This model is based on that proposed for the significant copper-cobalt deposits of the Zambian Copper Belt, and the extensive copper deposits of the Kupferschiefer in eastern Europe. The location and stratigraphic position of the observed cobalt anomalism has numerous similarities with this model as outlined by Dragon Energy Limited in their recent release (Dragon Energy Limited ASX release 14 September 2016), but questions remain as to the source of the cobalt.

Cobalt may have been sourced from ultramafic units within the nearby Joyner’s Find greenstone belt which formed a basement high during deposition of Yerrida Basin units, or alternatively other ultramafic units may exist at depth. While no ultramafic rocks have yet been identified within the Yerrida Basin, some evidence for their existence comes from anomalous platinum and palladium regolith anomalism associated with mafic rocks of the Killara Formation (Pirajno and Adamides 1998, Dawes and Pirajno 1998); metals contained in more primitive magmatic material at depth may have been remobilised during the structural evolution of the Yerrida Basin.

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ENQUIRIES

Investors Media Matt Gauci Michael Vaughan Managing Director Fivemark Partners +61 8 9324 1053 +61 422 602 720 mgauci@metalicity.com.au michael.vaughan@fivemark.com.au

About Metalicity Limited

Metalicity Limited is an Australian mining exploration company with a primary focus on base metals sector and the development of the world class Admiral Bay Zinc Project, located in the north west of Australia. The company is currently undertaking a Pre-Feasibility study on Admiral Bay. The Company’s secondary focus is the rare and precious metals sector where early stage exploration has commenced. The Company is supported by a management team with 300+ years collective experience in the resources sector and strong shareholder base of institutional and sophisticated investors”.

Competent Person Statement

The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the ‘JORC Code’) sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves. The Information contained in this announcement has been presented in accordance with the JORC Code. Information in this report has been compiled from historic data by Pip Darvall, a consultant to Metalicity Ltd, who has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Darvall consents to the inclusion of the data in the form and context in which it appears.

References:

DAWES, P. R., and PIRAJNO, F., 1998, Geology of the Mount Bartle 1:100 000 sheet: Western Australia Geological Survey, 1:100 000 Geological Series Explanatory Notes, 26p.

PIRAJNO, F., and ADAMIDES, N. G., 1998, Geology of the Thaduna 1:100 000 sheet: Western Australia Geological Survey, 1:100 000 Geological Series Explanatory Notes, 24p.

Australian Consolidated Minerals, 1984, Annual Report Paroo Prospect, Exploration Licenses 53/2, 53/3. October 1983. WAMEX Item A14601.

1. See Dragon Energy Limited (ASX:DLE) Announcement dated 14[th] September 2016.

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