ARIKA RESOURCES LIMITED — Capital/Financing Update 2017

Jul 20, 2017

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ASX RELEASE: 21 JULY 2017

OUTSTANDING COBALT RESULTS DRILLING TO COMMENCE

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New surface samples further confirm significant cobalt and base metal anomalism at Kyarra West Further high assay results up to 1500 ppm Co, >1% Zn, and 3830 ppm Ni Historical results included 9 samples >500ppm Co and up to 6,400ppm Co Initial 4km[2] high priority target area now defined for a maiden 2-3000m RC drilling program Program of Works and Heritage Survey requests submitted targeting drilling within September Quarter Target mineralisation model seeking copper-cobalt or nickel-cobalt sulphide deposits

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Metalicity Limited (ASX:MCT) (“MCT” or “Company”) is very pleased to announce further outstanding surface sample results at Kyarra West, part of the Company’s 100% owned Kyarra Cobalt Project (E51/1755, E51/1756 and E53/1894, Figure 1). These results have given the Company confidence to move forward rapidly toward drill testing with all necessary approvals underway.

The Kyarra Cobalt project is located in the Yerrida Basin, WA (Figure 1) and is considered highly prospective for structural/stratigraphic-controlled copper-cobalt and potentially nickel-cobalt mineralisation. The Company has developed, based on a geological evaluation of the region an exploration model that includes numerous aspects of significant copper-cobalt and nickel-cobalt deposits of the Central African Copperbelt, where new discoveries continue to be made based on advances in exploration concepts.

Previously received excellent surface sample results at Kyarra West were followed up in June, with another 65 samples collected. Highlights of the most recent rock chip sampling results are presented in Table 1 below (complete results are shown in Table 2), and sample locations shown in Figure 2. Significant results of up to 1500 ppm Co and >1% Zn in weathered near-surface rock chips were received, across the entire outcrop area sampled (Figure 2, Figure 3). As previously reported, some of this anomalism has been observed to be associated with west-north-west striking breccia zones interpreted to be related to deep-seated structures and to represent part of a plumbing system for metalliferous fluids upward and southwards into suitable trap horizons as illustrated in the Company’s exploration model (Figure 4).

Of particular note are the generally steep dips of units (typically >50° to the south and southeast), which indicate significant disruption of the units in this area in contrast to the generally held view of the Yerrida Basin units being flat lying. Approvals for a maiden RC drill program of 2-3000m are currently underway to facilitate drilling in the September Quarter.

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, and the Paroo Station Mine and Camp in the Northern Goldfields region of WA. The three tenements give Metalicity a dominant position in the basin.

Metalicity Managing Director, Matt Gauci, commented: “The consistently high levels of cobalt and base metal anomalism in our surface sampling results further confirm the high prospectivity at Kyarra for copper-cobalt and/or nickel cobalt deposits similar to that found in the prolific Central African Copperbelt. These results give us great confidence in moving to the next phase of exploration with drilling soon to commence.”

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

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

Figure 1: Regional Location Map showing Metalicity’s Kyarra Project in relation to nearby tenement holders

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Kyarra West
E51/1755
E51/1756
E53/1894
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Source: Metal i city

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Figure 2: Kyarra West Target Area showing previously reported rock chip sampling results and Minedex open file results (see Tables 1 and 3 below).

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Area shown in Figure 3
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Source: Metal i city

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Figure 3: Kyarra West Target Area showing the locations of all Metalicity rock chip results with cobalt anomalism highlighted (see Tables 1 and 3 below).

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Source: Metal i city

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Figure 4: Kyarra Cobalt and base metals conceptual mineralisation model

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Source: Metal i city

Table 1: Highlights from recent Rock Chip Sample Results at Kyarra West shown in Figure 2. (note MCRK0263 Zn exceeded the assay detection limit and is currently being re-assayed).

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Table 2: Complete results for selected elements from recent rock chip sampling at Kyarra West

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Table 3: Minedex Prospects at Kyarra West shown in Figure 2

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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 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

Information in this report that relates to Exploration results has been compiled by Dr. Simon Dorling, who is a member of the Australian Institute of Geoscientists. Dr. Dorling is a consultant to Metalicity Ltd, and has sufficient experience 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. Dr. Dorling consents to the inclusion of the data in the form and context in which it appears.

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JORC Code, 2012 Edition – Table 1 report template

(Criteria in this section apply to all succeeding sections.)

	Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
	Sampling	•	Nature and quality of sampling (eg cut channels, random chips, or specific specialised	•	Rock chip samples consisted of a series of chips taken at a specific point location for a
	techniques		industry standard measurement tools appropriate to the minerals under investigation,		total sample of ~2kg.
			such as down hole gamma sondes, or handheld XRF instruments, etc). These
			examples should not be taken as limiting the broad meaning of sampling.
		•	Include reference to measures taken to ensure sample representivity and the
			appropriate calibration of any measurement tools or systems used.
		•	Aspects of the determination of mineralisation that are Material to the Public Report.
		•	In cases where ‘industry standard’ work has been done this would be relatively simple
			(eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was
			pulverised to produce a 30 g charge for fire assay’). In other cases more explanation
			may be required, such as where there is coarse gold that has inherent sampling
			problems. Unusual commodities or mineralisation types (eg submarine nodules) may
			warrant disclosure of detailed information.
	Drilling	•	Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger,	•	CDH1 RC pre-collar, CRB112 RAB drillhole
	techniques		Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of
			diamond tails, face-sampling bit or other type, whether core is oriented and if so, by
			_what method, etc). _
	Drill sample	•	Method of recording and assessing core and chip sample recoveries and result	•	Drill sample recovery not discussed in historic reporting
	recovery	•	Measures taken to maximise sample recovery and ensure representative nature of the
			samples.
		•	Whether a relationship exists between sample recovery and grade and whether sample
			bias may have occurred due topreferential loss/gain of fine/coarse material.
	Logging	•	Whether core and chip samples have been geologically and geotechnically logged to a	•	Geological descriptions were completed at each sample location and during historic
			level of detail to support appropriate Mineral Resource estimation, mining studies and		drilling.
			metallurgical studies.
		•	Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc)
			photography.
		•	The total length and percentage of the relevant intersections logged.
	Sub-sampling	•	If core, whether cut or sawn and whether quarter, half or all core taken.	•	Rock chip samples consisted of a series of chips taken at a specific point and may
	techniques and	•	If non-core, whether riffled, tube sampled, rotary split, and whether sampled wet or dry.		therefore exhibit bias compared with the overall outcrop.
	sample	•	For all sample types, nature, quality and appropriateness of sample prep. technique.	•	Details of splitter not discussed in historic reporting of drilling.
	preparation	• • •	Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. Whether sample sizes are appropriate to the grain size of the material being sampled.	• • •	No information relating to QAQC procedures is available. Contamination of RAB samples was highly likely due to the nature of the drilling technique. RC samples were collected as 2m composites, RAB as bottom of hole samples or as 2m composites.

Metalicity Limited	www.metalicity.com.au
ASX Code: MCT		6 Outram Street
ABN: 92 086 839 992	West Perth WA 6005

	Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
	Quality of assay	•	The nature, quality and appropriateness of the assaying and laboratory procedures	•	All rock chip samples were assayed by SGS Australia in Perth for 49 elements by 4
	data and		used and whether the technique is considered partial or total.		acid digest followed by ICP-AES and ICP-MS. Co, Cu, and Ni assay results for
	laboratory tests	•	For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters		laboratory duplicates were all within 10% of the original samples, indicating no obvious
			used in determining the analysis including instrument make and model, reading times,		problems with laboratory assay precision. No standards or field duplicates were
			calibrations factors applied and their derivation, etc.		included.
		•	Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.	•	For historic samplingdetailed information on the assay technique(s) utilised is not available. Rock chip samples were analysed for Au, Ag, As, Ba, Bi, Ca, Cd, Co, Cu, Fe, K, Mg, Mn, Mo, Ni, Na, P, Pb, Pt, S, Sr, V, W and Zn. RAB samples were analysed for
					Ag, As, Au, Ba, Bi, Ca, Cd, Co, Cu, Fe, K, Mg, Mn, Mo, Ni, Na, P, Pb, Pt, S, Sb, Sr, V,
					W and Zn. Diamond core and RC pre-collar chips were analysed for Au, Ag, As, Ba,
					Co, Cu, Fe, Mn, Mo, Ni, Pb, and Zn.
	Verification of	•	The verification of significant intersections by either independent or alternative	•	Field data was recorded by the field geologist into pre-established templates and
	sampling and		company personnel.		subsequently validated and loaded into the company surface sampling database.
	assaying	•	The use of twinned holes.	•	Validation of sample point locations in ArcGIS did not identify any inconsistent locations
		•	Documentation of primary data, data entry procedures, data verification, data storage		and the information was subsequently loaded into the company database.
			(physical and electronic) protocols.	•	Anomalous surface values have been verified by the competent persons.
		•	Discuss any adjustment to assay data.	•	For historic data, no information is available on how data was originally recorded.
					Original paper drill logs for the diamond drill holes and associated pre-collars are
					reproduced in the historic reports.
	Location of data	•	Accuracy and quality of surveys used to locate drill holes (collar and down-hole	•	Sample locations were surveyed using a Garmin handheld GPS with an accuracy of +/-
	points		surveys), trenches, mine workings and other locations used in Mineral Resource		5m. Standard MGA 94 Zone grid coordinates are presented in the relevant tables
			estimation.		above with the Zone appended.
		• •	Specification of the grid system used. Quality and adequacy of topographic control.	•	For historic results no information is available on the surveying method used for the original data. Down hole surveys are recorded for diamond drillhole CDH1 showing
					deviation of up to 9°.
	Data spacing and	•	Data spacing for reporting of Exploration Results.	•	Metalicity sample locations were appropriate for first pass regional assessment of
	distribution	•	Whether the data spacing and distribution is sufficient to establish the degree of		project potential.
		•	geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. Whether sample compositing has been applied.	•	Historic data locations are Minedex prospect locations published by the DMP, and are appropriately spaced to demonstrate cobalt anomalism exists within the area of interest.
	Orientation of	•	Whether the orientation of sampling achieves unbiased sampling of possible structures	•	Samples were all collected from outcropping bedrock and are inherently subject to bias.
	data in relation to		and the extent to which this is known, considering the deposit type.
	geological	•	If the relationship between the drilling orientation and the orientation of key mineralised
	structure		structures is considered to have introduced a sampling bias, this should be assessed
			and reported if material.
	Sample security	•	The measures taken to ensure sample security.	•	All Metalicity samples were collected and sealed in uniquely labelled calico sample
					bags by the field geologists. Sample bags were packaged up and delivered to a courier
					company for transport direct to SGS Laboratories in Perth. Samples were checked
					against the submission forms on arrival at SGS,with no missingor additional samples.

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	Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
				•	No information is available as to historic sample security.
	Audits or reviews	•	The results of any audits or reviews of sampling techniques and data.	•	Audits and reviews were not undertaken, apart from the QAQC checks outlined above.

Section 2 – Reporting of Exploration Results

	Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
	Mineral tenement	•	Type, reference name/number, location and ownership including agreements or	•	Sampling was undertaken within tenement E51/1756 located approximately 80km east
	and land tenure		material issues with third parties such as joint ventures, partnerships, overriding		of Meekatharra, WA and 100% owned by Metalicity.
	status		royalties, native title interests, historical sites, wilderness or national park and	•	The area subject to this announcement lies on vacant crown land and Paroo Station.
			environmental settings.	•	A Heritage Agreement has been achieved with the local Yugunga-Nya native title
		•	The security of the tenure held at the time of reporting along with any known		holders on typical industry terms.
			impediments to obtaining a licence to operate inthe area.
	Exploration done	•	Acknowledgment and appraisal of exploration by other parties.	•	Previous exploration work within the tenement area has consisted of regional mapping,
	by other parties				soil sampling and drilling by various parties primarily exploring for base metals
				•	Previous samplinghad been undertaken in the areas covered bythis work.
	Geology	•	Deposit type, geological setting and style of mineralisation.	•	The Company is exploring for base metals, in particular cobalt within the Kyarra Project
					area. The geology consists of shallowly dipping sediments and volcanic rocks of the
					Yerrida Basin where base metal anomalism has led numerous previous explorers to
					target sedimentary exhalative style mineralisation. The Company is targeting
					sedimentaryhosted Co-Cu-Ni deposits.
	Drill hole	•	A summary of all information material to the understanding of the exploration results	•	Tabulated rock chip sample results are presented above and in Figure 2 and Figure 3.
	Information		including a tabulation of the following information for all Material drill holes:
			o easting and northing of the drill hole collar
			o elevation or RL (Reduced Level – elevation above sea level in metres) of the drill
			hole collar
			o dip and azimuth of the hole
			o down hole length and interception depth
			o hole length.
		•	If the exclusion of this information is justified on the basis that the information is not
			Material and this exclusion does not detract from the understanding of the report, the
			Competent Person should clearly explain why this is the case.
	Data aggregation	•	In reporting Exploration Results, weighting averaging techniques, maximum and/or	•	No weighting, or cut off grades were employed.
	methods		minimum grade truncations (eg cutting of high grades) and cut-off grades are usually
			Material and should be stated.
		•	Where aggregate intercepts incorporate short lengths of high grade results and longer
			lengths of low grade results, the procedure used for such aggregation should be stated
			and some typical examples of such aggregations should be shown in detail.
		•	The assumptions used for any reporting of metal equivalent values should be clearly
			_stated. _
	Relationship	•	These relationships are particularly important in the reporting of Exploration Results.	•	Historic intercept lengths are reported as down-hole lengths.
	between	•	If thegeometry of the mineralisation with respect to the drill hole angle is known, its	•	There is not enough information to determine true widths,however thegeological

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	Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
	mineralisation		nature should be reported.		assessment of flat lying to shallowly dipping units in the area suggests it is reasonable
	widths and	•	If it is not known and only the down hole lengths are reported, there should be a clear		to assume that down hole widths closely approximate true widths.
	intercept lengths		statement to this effect (e.g. ‘down hole length, true width not known’).
	Diagrams	•	Appropriate maps and sections (with scales) and tabulations of intercepts should be	•	Refer to the main body of the announcement for figures depicting sampling locations
			included for any significant discovery being reported. These should include, but not be		and assay results.
			limited to a plan view of drill hole collar locations and appropriate sectional views.
	Balanced	•	Where comprehensive reporting of all Exploration Results is not practicable,	•	All assay results relevant to the area of interest have been reported.
	reporting		representative reporting of both low and high grades and/or widths should be practiced
			to avoid misleading reporting of Exploration Results.
	Other substantive	•	Other exploration data, if meaningful and material, should be reported including (but not	•	Some relevant geological observations are presented in the main body text.
	exploration data		limited to): geological observations; geophysical survey results; geochemical survey	•	No additional testwork beyond assaying has been undertaken to date.
			results; bulk samples – size and method of treatment; metallurgical test results; bulk
			density, groundwater, geotechnical and rock characteristics; potential deleterious or
			contaminating substances.
	Further work	•	The nature and scale of planned further work (eg tests for lateral extensions or depth	•	Further analysis of geological information collected and available in open file reports
			extensions or large-scale step-out drilling).		will be undertaken to assist drill targeting.
		•	Diagrams clearly highlighting the areas of possible extensions, including the main
			geological interpretations and future drilling areas, provided this information is not
			commercially sensitive.

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