ARIKA RESOURCES LIMITED — Capital/Financing Update 2019

Feb 27, 2019

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ASX RELEASE: 28 February 2019

METALICITY ACQUIRES TWO PROJECTS IN THE NORTH FRASER RANGE

Target generation work identifies two magmatic Cu-Ni(-PGM) Projects within the Albany-Fraser Belt

HIGHLIGHTS

• Two exciting prospects based on magnetic and gravity anomalism,

• Historical drill holes noting chalcopyrite disseminations within layered mafic intrusions

• Potential magmatic Cu-Ni (-PGM) mineralisation.

• E69/3676: a 635 metre drill hole noting an olivine norite as basement;

• E69/3677: a 363 metre drill hole noting a layered mafic basement with 170.5 to

363m logged with trace chalcopyrite and pyrite.

Metalicity Limited (ASX:MCT) (“ MCT ” or “ Company ”) is pleased to announce that following a full review of the Albany-Fraser Province, we have significantly expanded our footprint with a further two Project area applications made. Two structures were prominent:

• A stand out feature is a large ring or saucer shaped (lopolith) magnetic high coincident with a complimentary gravity structure on E69/3676; and

• A north westerly orientated magnetic anomaly high coincident with a gravity low on E69/3677.

Historic diamond drilling by Kennecott in 1980 targeting Olympic Dam Style Mineralization intersected mafic intrusive rocks with trace Chalcopyrite, a copper sulphide mineral. MCT has reviewed these holes confirming the mineral identification and taken samples for geochemical analysis.

General Manager – Exploration & Development, Jason Livingstone commented:

“Our regional prospect generation activities are identifying fantastic targets. With the great work being conducted by the Department of Mines, Industry Regulation and Safety, we were able to view this core that was drilled in 1980 to confirm the presence of chalcopyrite. A credit to the Department and proof that we are generating a pipeline of highly prospective projects for Metalicity”

In 1980 Kennecott Explorations (Australia) Ltd drilled a 635 metre (vertical) drill hole (drill hole id: N1-1) to test this anomaly on E69/3676. Kennecott. As stated in their exploration report (dated January 1981, WAMEX No. A9660), conducted an Australia wide search for similar structures that could host Roxby Downs (Olympic Dam)

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

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

style mineralisation. Their work concluded that the origin of the anomalies present was “by basic intrusions and therefore not considered prospective for Olympic Dam type deposits”. Kennecott logged the basement rocks as an Olivine Norite, confirming the mafic intrusive origin as stated.

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However, in the drill hole, N3-1 drilled to 363 metres (vertical) to test the geophysical anomaly on E69/3677, Kennecott’s exploration report noted a “mafic” intrusive with comments that alluded to fractionation, but with the entire basement intercept from 170.5 metres to end of hole at 363 metres having trace chalcopyrite and pyrite disseminations. This was confirmed in their report with a polished thin section from N3-1 at a depth of 335 metres noting a 5% visual estimate of chalcopyrite occurring as discrete anhedra and blebs.

Both the N3-1 and N1-1 diamond core holes are located at the Kalgoorlie Core Library. The Company was fortunate that the drill holes were available to view and in great condition. Jason Livingstone, the Company’s General Manager – Exploration & Development has recently viewed the core and confirms the presence of chalcopyrite in a fractionated mafic sequence, not only in N3-1, but also N1-1 as well. The Company is able resample the core and submit samples for analysis and mineralogical determinations. This is currently

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underway. The Company looks forward to making these results available. Photograph 1 depicts the core in its present state.

Details of each of the areas are as follows:

	Tenement ID	No. of blocks
	E69/3676	49
	E69/3677	24
	Total	73
Table 1: Fraser North Project Tenement Details.

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Figure 1: Fraser North with core library drill holes over DMP Magnetic Anomaly and tenure applications.

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Photograph 1: N3-1 core library drill hole.
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Competent Person Statement

Information in this report that relates to Exploration results is based on, and fairly reflects, information compiled by Jason Livingstone, a Competent Person who is a Member of the Australian Institute of Geoscientists and Australian Institute of Mining and Metallurgy. Mr. Livingstone is an employee of Metalicity Limited. Mr. Livingstone has sufficient experience that 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. Livingstone consents to the inclusion of the data in the form and context in which it appears.

ENQUIRIES

Investors

Investor Relations

Mat Longworth David Tasker/ Colin Jacoby CEO Chapter One Advisors +61 8 9324 1053 +61 433 112 936/ +61 439 980 359 mlongworth@metalicity.com.au david.tasker@chapteroneavisors.com.au

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JORC Code, 2012 Edition – Table 1

Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	Commentary
Sampling	• Nature and quality of sampling (eg cut channels, random chips, or	•The Competent Person has viewed the historical core available at the
techniques	specific specialised industry standard measurement tools appropriate	Kalgoorlie Core Library. It is confirmed that Kennecott took three
	to the minerals under investigation, such as down hole gamma	samples (half core) from each hole at the specified intervals within the
	sondes, or handheld XRF instruments, etc). These examples should	WAMEX Report A9660.
	not be taken as limiting the broad meaning of sampling.	•Regarding the laboratory work, Au was determined by a 50g fire
	• Include reference to measures taken to ensure sample representivity	assay, Ag, Mo, Pb, Se and Te were determined by AAS, with Ba, Ca,
	and the appropriate calibration of any measurement tools or systems	Ce, Cr, Cd, Co, Cu, K, Mn, Nb, Ni, Ta, Th, W, Zn and U by ICP-OES.
	used.	•However, the visual determinations of chalcopyrite in Kennecott
	• Aspects of the determination of mineralisation that are Material to the	Explorations Report A9660 were subject to investigations to confirm
	Public Report.	the presence of such mineral at the amounts started in the historical
	• In cases where ‘industry standard’ work has been done this would be	logging. The Competent Person confirms the presence of this
	relatively simple (eg ‘reverse circulation drilling was used to obtain 1	mineralogy at the trace amounts logged in both N3-1 and N1-1 drill
	m samples from which 3 kg was pulverised to produce a 30 g charge	holes.
	for fire assay’). In other cases more explanation may be required,	•As such, the nature of the sampling, the QAQC protocols taken and
	such as where there is coarse gold that has inherent sampling	aspects of the determination of mineralisation etc. require further
	problems. Unusual commodities or mineralisation types (eg	work, upon gaining appropriate approvals, to determine if the work
	submarine nodules) may warrant disclosure of detailed information.	publicly stated is a true reflection of the mineralisation/anomalism
		encountered.
Drilling	• Drill type (eg core, reverse circulation, open-hole hammer, rotary air	•Kennecott Explorations (Australia) Ltd conducted BQ sized drill coring
techniques	blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple	to recover sample. The core was not orientated as it was drilled
	or standard tube, depth of diamond tails, face-sampling bit or other	vertically.
	_type, whether core is oriented and if so, by what method, etc). _
Drill sample	• Method of recording and assessing core and chip sample recoveries	•The Competent Person has viewed the core, of which pers comm
recovery	and results assessed.	with Geological Survey Staff, the core was re-trayed. The work
	• Measures taken to maximise sample recovery and ensure	performed by DMIRS was excellent and the core is continuous and
	representative nature of the samples.	the metre marks correlate.
	• Whether a relationship exists between sample recovery and grade	•Given the state of the core, it appears that core recovery was optimal.
	and whether sample bias may have occurred due to preferential	•No relationships between grade and sample recovery can be made at
	loss/gain of fine/coarse material.	this point in time as the re-sampling exercise has not been performed.

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Criteria	Criteria		JORC Code explanation	Commentary
Logging			• Whether core and chip samples have been geologically and	•The core was geologically logged by Kennecott in 1980, and again for
			geotechnically logged to a level of detail to support appropriate	this announcement. Field verification of the colar location may be
			Mineral Resource estimation, mining studies and metallurgical	required to potentially allow these drill holes to contribute towards an
			studies.	estimation.
			• Whether logging is qualitative or quantitative in nature. Core (or	•Logging was qualitative and natural geological boundaries observed
			costean, channel, etc) photography.	in re-sampling intervals. Follow up petrology work is also scheduled
			• The total length and percentage of the relevant intersections logged.	to assist in mineralogical determinations.
				•All available core was logged by Kennecott and by the Competent
				Person.
Sub-			• If core, whether cut or sawn and whether quarter, half or all core	•The core, for the 3 samples from N3-1 and N1-1 was cut by a core
sampling			taken.	saw. No other samples to date have been taken as the re-sampling
techniques			• If non-core, whether riffled, tube sampled, rotary split, etc and	exercise is scheduled to take place concurrent with this
and sample preparation			whether sampled wet or dry. • For all sample types, the nature, quality and appropriateness of the sample preparation technique.	announcement. •Sampling techniques will be discussed when the results are published from this re-sampling exercise.
			• 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.
Quality		of	• The nature, quality and appropriateness of the assaying and	•The Kennecott Explorations assay data is considered partial,
assay		data	laboratory procedures used and whether the technique is considered	however, the selected analytical techniques taken are appropriate
and			partial or total.	form the style of mineralisation observed.
laboratory tests			• For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument
			make and model, reading times, calibrations factors applied and their
			derivation, etc.
			• Nature of quality control procedures adopted (eg standards, blanks,
			duplicates, external laboratory checks) and whether acceptable levels
			of accuracy (ie lack of bias) andprecision have been established.

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Criteria		JORC Code explanation	Commentary
Verification	of	• The verification of significant intersections by either independent or	•The Competent person is able to correlate the assay data in WAMEX
sampling and		alternative company personnel.	Report A9660 with the cut intervals observed in the core.
assaying		• The use of twinned holes.	•Regarding the use of twinned holes, not applicable as these are
		• Documentation of primary data, data entry procedures, data	singular holes into magnetic anomalies to date.
		verification, data storage (physical and electronic) protocols.	•The documentation presented in the WAMEX Report A9660 are the
		• Discuss any adjustment to assay data.	handwritten logs by the geologist at the time of drilling, which were
			verified by the Competent Person by viewing the core and the logs
			side by side.
			•No adjustment to assay data was made.
Location	of	• Accuracy and quality of surveys used to locate drill holes (collar and	•Upon grant and necessary approvals, the location of the collars will
data points		down-hole surveys), trenches, mine workings and other locations	be verified.
		used in Mineral Resource estimation.	•Original grid used was longitude and latitude.
		• Specification of the grid system used.	•The Competent Person is unable to comment on the quality or
		• Quality and adequacy of topographic control.	adequacy of the topographic control, but upon requisite approvals,
			the collar positions will be verified.
Data spacing		• Data spacing for reporting of Exploration Results.	•These are singular holes into magnetic anomalies.
and		• Whether the data spacing and distribution is sufficient to establish the	•With infill drilling, these holes are insufficient to estimate a Mineral
distribution		degree of geological and grade continuity appropriate for the Mineral	Resource, nor an Ore Reserve.
		Resource and Ore Reserve estimation procedure(s) and	•No sample compositing was applied.
		classifications applied.
		• _Whether sample compositing has been applied. _
Orientation	of	• Whether the orientation of sampling achieves unbiased sampling of	•Considering the potential deposit type of magmatic nickel copper
data	in	possible structures and the extent to which this is known, considering	mineralisation, the orientation of the drilling could be considered
relation	to	the deposit type.	appropriate (being vertical).
geological structure		• If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a	•Follow up drilling will be required to ensure that drilling orientation minimizes and sampling bias, but at this stage, the drill core confirms
		sampling bias, this should be assessed and reported if material.	the presence of a mafic layered intrusive with trace chalcopyrite,
			follow up work, including requisite approvals, are required to
			systematically assess the areas.
Sample		• The measures taken to ensure sample security.	•The core is currently stored at the DMIRS Core Library in Kalgoorlie.
security			adequate sample security is in place.

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Criteria		JORC Code explanation	Commentary
Audits	or	• The results of any audits or reviews of sampling techniques and data.	•The primary aim of viewing the core was confirming the presence of
reviews			noted chalcopyrite, a common copper bearing mineral, in historical
			logging. It was found to be, by the Competent Person, a true and fair
			reflection of the mineralogy present.

Section 2 Reporting of Exploration Results

Criteria JORC Code explanation	Commentary	Commentary	Commentary	Commentary	Commentary	Commentary	Commentary
Mineral tenement and land tenure status • Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. • The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.	•E69/3676 and E69/3677 are currently under application. •No known impediments to their grant are known at this point in time.
Exploration done by other parties • Acknowledgment and appraisal of exploration by other parties.	•Kennecott Explorations (Australia) Ltd conducted exploratory work over prominent magnetic highs coincident with gravity lows on the applied for tenure. •Their exploration model was for Roxby Downs (Olympic Dam) style mineralisation. •Given the geophysical anomalies are caused by mafic intrusives, Kennecott deemed the areas not prospective for Olympic Dam style mineralisation and relinquished the area. •However, the mafic intrusions are potential sites of magmatic nickel copper mineralisation, therefore, Metalicity applied for the tenure.
Geology • Deposit type, geological setting and style of mineralisation.	•Fractionated mafic intrusives akin to magmatic mineralisation.					style nickel copper
Drill hole Information • A summary of all information material to the understanding of the exploration results 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	•Collar information:
	Drill Hole ID	Latitude	Longitude	RL	Depth(m)	Dip	Azimuth
	N1-1	28°27'20"	125°18'30"	-	635	-90°	0
	N3-1	28°49'20"	125°02'45"	-	363	-90°	0

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Criteria	JORC Code explanation	Commentary
	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.
		•
		•

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Criteria	JORC Code explanation	Commentary
Data	• In reporting Exploration Results, weighting averaging techniques,	•No aggregate or weighted average techniques are presented.
aggregation	maximum and/or minimum grade truncations (eg cutting of high	•No metal equivalents are presented.
methods	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	•The relationship between mineralisation width and intercept width can
between	Exploration Results.	be drawn at this point in time given that there are only singular holes
mineralisatio	• If the geometry of the mineralisation with respect to the drill hole	into each anomaly that both display chalcopyrite mineralogy.
n widths and	angle is known, its nature should be reported.	•This aspect will be thoroughly investigated in future, with the requisite
intercept lengths	• If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true _width not known’). _	approvals sort first, in future exploration programmes. •Only downhole lengths are stated.

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Criteria	JORC Code explanation	Commentary
Diagrams	• Appropriate maps and sections (with scales) and tabulations of	•Please see the main body of the announcement.
	intercepts should be included for any significant discovery being
	reported These should include, but not be limited to a plan view of
	drill hole collar locations and appropriate sectional views.
Balanced	• Where comprehensive reporting of all Exploration Results is not	•The body of this announcement is sourced from Kennecott
reporting	practicable, representative reporting of both low and high grades	Explorations (Australia) Ltd and from the Competent Person viewing
	and/or widths should be practiced to avoid misleading reporting of	the resultant core from this programme. All information, available to
	Exploration Results.	the Competent Person at the time of announcement, is discussed.
Other	• Other exploration data, if meaningful and material, should be reported	•No other substantive exploration data is discussed beyond the
substantive	including (but not limited to): geological observations; geophysical	coincident magnetic anomaly high and gravity low, coupled with
exploration data	survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density,	observed mineralogy suggesting the presence of a magmatic copper (nickel) system.
	groundwater, geotechnical and rock characteristics; potential
	deleterious or contaminating substances.
Further work	• The nature and scale of planned further work (eg tests for lateral	•Beyond gaining tenement approval and land access agreements, the
	extensions or depth extensions or large-scale step-out drilling).	initial steps will be to verify the on-ground anomalism described in the
	• Diagrams clearly highlighting the areas of possible extensions,	public domain data prior to making detailed recommendations to
	including the main geological interpretations and future drilling areas,	exploration/development programmes.
	provided this information is not commercially sensitive.	•Diagrams pertinent to the area’s in question are supplied in the body
		of this announcement.

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