MINERAL COMMODITIES LTD — AGM Information 2012

Apr 26, 2012

MINERAL COMMODITIES LIMITED

ACN 008 478 653

NOTICE OF ANNUAL GENERAL MEETING

TIME : 10.00 am (WST) DATE : Thursday, 31 May 2012 PLACE : BDO Kendalls, Ground Floor 38 Station Street, Subiaco WA 6008

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (+61 8) 6143 4100.

C O N T E N T S P A G E

Notice of Annual General Meeting (setting out the proposed resolutions) 4 Explanatory Statement (explaining the proposed resolutions) 6 Glossary 11

Proxy Form

IM PORTANT INFORM ATION

TIME AND PLACE OF MEETING

Notice is given that the Annual General Meeting of the Shareholders to which this Notice of Meeting relates will be held at 10.00 am (WST) on Thursday, 31 May 2012 at:

BDO Kendalls Ground Floor, 38 Station Street Subiaco WA 6008

YOUR VOTE IS IMPORTANT

The business of the Annual General Meeting affects your shareholding and your vote is important.

VOTING ELIGIBILITY

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders at 5:00 pm (WST) (7:00 pm Sydney time)on Tuesday, 29 May 2012.

VOTING IN PERSON

To vote in person, attend the Annual General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, members are advised that:

• each member has a right to appoint a proxy;

• the proxy need not be a member of the Company; and

• a member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

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New sections 250BB and 250BC of the Corporations Act came into effect on 1 August 2011 and apply to voting by proxy on or after that date. Shareholders and their proxies should be aware of these changes to the Corporations Act, as they will apply to this Annual General Meeting. Broadly, the changes mean that:

• if proxy holders vote, they must cast all directed proxies as directed; and

• any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes is set out below.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

• the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and

• if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and

• if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and

• if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

• an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and

• the appointed proxy is not the chair of the meeting; and

• at the meeting, a poll is duly demanded on the resolution; and

• either of the following applies:

• the proxy is not recorded as attending the meeting;

• the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

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BUSINESS OF THE M E E T I N G

Notice is given that the Annual General Meeting of Shareholders will be held at 10.00 am (WST) on Thursday, 31 May 2012 at BDO Kendalls, Ground Floor, 38 Station Street, Subiaco WA 6008.

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the Annual General Meeting. The Explanatory Statement and the Proxy Form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders of the Company at 5:00 pm (WST) (7:00 pm Sydney time)on Tuesday, 29 May 2012.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

AGENDA

ORDINARY BUSINESS

Financial Statements and Reports

To receive and consider the annual financial report of the Company for the financial year ended 31 December 2011 together with the declaration of the directors, the directors’ report, the remuneration report and the auditor’s report.

1. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a non-binding resolution :

“That, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company’s annual financial report for the financial year ended 31 December 2011.”

Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Prohibition Statement:

A vote on this Resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

• (a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or

• (b) a Closely Related Party of such a member.

However, a person described above may vote on this Resolution if:

• (a) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on the Resolution; and

• (b) the vote is not cast on behalf of a person described in sub-paragraphs (a) or (b) above.

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2. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – PETER TORRE

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Clause 35(c) of the Constitution and for all other purposes, Peter Torre retires by rotation, and being eligible, is re-elected as a Director.”

3. RESOLUTION 3 – PLACEMENT – SHARES

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue up to that number of Shares, when multiplied by the issue price, will raise up to $20,000,000 (twenty million) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

DATED: 23 APRIL 2012

BY ORDER OF THE BOARD

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PETER TORRE COMPANY SECRETARY

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E X P L A N A T O R Y S T A T E M E N T

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

1. FINANCIAL STATEMENTS AND REPORTS

In accordance with the Constitution, the business of the Annual General Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 31 December 2011 together with the declaration of the directors, the directors’ report, the remuneration report and the auditor’s report.

The Company will not provide a hard copy of the Company’s annual financial report to Shareholders unless specifically requested to do so. Shareholders can view the Annual Report, which contains the Financial Report for the year ended 31 December 2011, on the Company's website - www.mncom.com.au

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

2.1 General

The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the Directors or the Company.

Under recent changes to the Corporations Act which came into effect on 1 July 2011, if at least 25% of the votes cast on Resolution 1 are voted against adoption of the Remuneration Report at the Annual General Meeting, and then again at the Company's 2012 annual general meeting, the Company will be required to put to Shareholders a resolution proposing the calling of a general meeting to consider the appointment of directors of the Company ( Spill Resolution ).

If more than 50% of Shareholders vote in favour of the Spill Resolution, the Company must convene the general meeting ( Spill Meeting ) within 90 days of the Company's 2012 annual general meeting. All of the Directors who were in office when the Company's 2012 Directors' report was approved, other than the managing director of the Company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting. Following the Spill Meeting those persons whose election or re-election as Directors is approved will be the Directors of the Company.

The remuneration report sets out the Company’s remuneration arrangements for the Directors and senior management of the Company. The remuneration report is part of the Directors’ report contained in the annual financial report of the Company for the financial year ending 31 December 2011.

A reasonable opportunity will be provided for discussion of the remuneration report at the Annual General Meeting.

2.2 Proxy Restrictions

Pursuant to the Corporations Act, if you elect to appoint the Chair, or another member of Key Management Personnel or any Closely Related Party as your proxy to vote on this Resolution 1, you must direct the proxy how they are to vote. Where you do not direct the Chair, or another member of Key Management Personnel or Closely Related Party on how to vote on this

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Resolution 1, the proxy is prevented by the Corporations Act from exercising your vote and your vote will not be counted in relation to this Resolution 1.

3. RESOLUTION 2– RE-ELECTION OF DIRECTORS

Clause 35(c) of the Constitution requires that at the Company's annual general meeting in every year, one-third of the Directors for the time being, or, if their number is not a multiple of 3, then the next highest number nearest one-third (rounded upwards in case of doubt), shall retire from office, provided always that no Director (except a Managing Director) shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself or herself for reelection.

The Directors to retire at an annual general meeting are those who have been longest in office since their last election, but, as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots.

A Director who retires by rotation under clause 35(c) of the Constitution is eligible for re-election.

Peter Torre, the Director longest in office since his last election, retires by rotation and seeks re-election.

4. RESOLUTION 3 – PLACEMENT – SHARES

4.1 General

Resolution 3 seeks Shareholder approval for the allotment and issue of up to that number of Shares, when multiplied by the issue price, will raise up to $20,000,000 (twenty million) ( Placement ). The Company intends to use the funds raised from the Placement towards development of the Company’s Tormin Mineral Sands Project in South Africa, which is nearing completion of all necessary approvals to proceed with full-scale development.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

The effect of Resolution 3 will be to allow the Directors to issue the Shares pursuant to the Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

4.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Placement:

• (i) the maximum number of Shares to be issued is up to that number of Shares which, when multiplied by the issue price, equals $20,000,000 (twenty million);

• (ii) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;

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• (iii) the issue price will be not less than 80% of the average market price for Shares calculated over the 5 days on which sales in the Shares are recorded before the day on which the issue is made or, if there is a prospectus, over the last 5 days on which sales in the securities were recorded before the date the prospectus is signed;

• (iv) the Shares will be issued to investors identified by the Company in consultant with a broker or brokers to be appointed by the Company. The Directors will determine to whom the Shares will be issued but these persons will not be related parties of the Company;

• (v) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and

• (vi) the Company intends to use the funds raised from the Placement towards development of the Company’s Tormin Mineral Sands Project in South Africa. Further details are set out in section 4.3 of this Explanatory Statement.

4.3 Use of funds

The Company intends to apply funds raised from the Placement, together with existing cash reserves, to develop the Tormin Mineral Sands Project for hydraulic mining and processing (which is detailed at item 2 of the table below). The Company estimates that this development will be undertaken in 12 months accordingly, the intended use of funds raised from the Placement in the 12 months following completion of the Placement as follows:

Funds available	Full Subscription ($)	Percentage of Funds (%)
Existing cash reserves (including liquid investments)	1,000,000	4.76
Funds raised from the Placement	20,000,000	95.24
Total	21,000,000	100
Allocation of funds
Expenses of the Placement1	1,200,000	5.71
Development /Project expenditure2	16,000,000	76.19
Administration costs3	2,000,000	9.52
Working capital4	1,800,000	8.57
Total	21,000,000	100

Notes

1. The expenses of the offer are based on an estimate of broker fees which may be payable in relation to the Placement. Assuming the broker fees is 6% of the total funds raised.

2. A Definitive Feasibility Study ( DFS ) commissioned by MRC demonstrated that Tormin can produce an enriched non-magnetic saleable concentrate containing predominately zircon and rutile. The base case derived from the DFS provides for hydraulic mining and primary concentration of the deposit through spiral plants on the beach. Thereafter, the concentrate will be transferred to a secondary concentration plant ( SCP ) where it will be further upgraded by spirals, wet magnetic separation (LIMS and WHIMS), and screens before being bagged prior to shipment to destination markets. Tailings from the SCP will be subsequently transferred back to the beach for deposition.

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Perth-based MSP Engineering Pty Ltd (MSP Engineering) completed the process engineering, including PFD’s, P&ID’s, Mass Balances and Process Design Criteria, based on the DFS and submitted designs for the primary wet concentrators based on the beach and the SCP. MSP Engineering also prepared scope specifications and distributed tender documents. The following capital cost summary estimate has been derived:

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The scope of work includes provision for the following items:

• Upgrade of existing roads;

• Bulk earthworks for the proposed SCP;

• All concrete works;

• Fabrication and construction of the beach concentrators and the SCP;

• All equipment, storage and process facilities;

• Installation of equipment and mechanical and piping services; and

• Electrical and instrumentation scope and installation.

• The estimate of administration costs are based on existing annual general administration expenses including salaries, fees and general overheads for both the Australian and South African offices along with payments for existing creditors.

• The estimate of working capital relates only to general working capital associated with the start up of the development of the Company’s Tormin Mineral Sands Project.

Board anticipates that the expenditure of $16,000,000 on development or project expenditure will bring the Tormin Project into production with necessary works to commence hydraulic mining and processing of concentrate with the installation of primary processing facilities. On completion of the Placement, the Board believes the Company will have sufficient working capital to achieve these objectives.

The above table is a statement of current intentions as of the date of this Notice of Meeting. As with any budget, intervening events and new circumstances have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

If the Company is not successful in raising the proposed $20,000,000 pursuant to the Placement, which it estimates is required for the development of the Company’s Tormin Mineral Sands Project in South Africa, the Company will consider alternate sources of funding such as quasi debt via the issue of convertible notes and funding alternatives from potential off-take partners.

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4.4 Dilution

The closing market price for Shares on 17 April 2012 was $ 0.0840. The lowest issue price (i.e. maximum discount) of not less than 80% of this market price would be $0.0672 per Share.

Accordingly set out below is a worked example of the number of Shares that may be issued under Resolution 3 based on an assumed issue price of $0.065, $0.070 and $0.075.

Assumed issue price	Maximum number of Shares which the Company could issue (rounded up to the nearest whole number) pursuant to Resolution 3	Current Shares on issue as at the date of this Notice	Increase in the number of Shares on issue assuming the Company issued the maximum amount pursuant to Resolution 3	Dilution effect on existing Shareholders
$0.065	307,692,308	153,393,021	461,085,329	67%
$0.070	285,714,286	153,393,021	439,107,307	65%
$0.075	266,666,667	153,393,021	420,059,688	63%

The Company notes that the above workings are an example only and the actual issue price may differ. This will result in the maximum number of Shares to be issued and the dilution percentage to also differ.

4. ENQUIRIES

Shareholders are requested to contact the Company Secretary on (+ 61 8) 6143 4100 if they have any queries in respect of the matters set out in these documents.

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5. GLOSSARY

• $ means Australian dollars.

Annual General Meeting or Meeting means the meeting convened by the Notice of Meeting.

ASX means ASX Limited.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Days means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Closely Related Party of a member of the Key Management Personnel means:

• (a) a spouse or child of the member;

• (b) a child of the member’s spouse;

• (c) a dependent of the member or the member’s spouse;

• (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;

• (e) a company the member controls; or

• (f) a person prescribed by the Corporations Regulations 2001 (Cth

Company means Mineral Commodities Limited ACN 008 478 653.

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice of Meeting.

Key Management Personnel has the same meaning as in the accounting standards and broadly includes those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.

Notice of Meeting or Notice of Annual General Meeting means this notice of annual general meeting including the Explanatory Statement.

Option means an option to acquire a Share.

Placement has the meaning given to that term in section 4.1 of the Explanatory Statement.

Proxy Form means the proxy form accompanying the Notice.

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Remuneration Report means the remuneration report set out in the Director’s report section of the Company’s annual financial report for the year ended 31 December 2012.

Resolutions means the resolutions set out in the Notice of Meeting, or any one of them, as the context requires.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

WST means Western Standard Time as observed in Perth, Western Australia.

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