MINERAL COMMODITIES LTD — Annual Report 2010

Mar 31, 2010

MINERAL COMMODITIES LIMITED

ABN 39 008 478 653

ANNUAL FINANCIAL REPORT

31 DECEMBER 2009

Mineral Commodities Limited Annual Financial Report for the year ended 31 December 2009

Corporate Directory

Directors	Joseph Anthony Caruso - Non-Executive Chairman
	Mark Victor Caruso - Non-Executive Director
	Gregory Hugh Steemson - Managing Director
Company Secretary	Peter Torre
Registered Office	Unit 15, Level 1
	51-53 Kewdale Road
	Welshpool,
	Western Australia 6106
	Telephone: (61 8) 9353 4890
	Facsimile: (61 8) 9353 4894
	Email: info@mncom.com.au
	Website: www.mncom.com.au
Solicitors	Steinepreis Paganin
	Level 4, Next Building
	16 Milligan Street
	Perth WA 6000
Auditors	BDO Audit (WA) Pty Ltd
	38 Station St
	Subiaco, Western Australia 6008
Share Registry	Advanced Share Registry Ltd
	150 Stirling Highway
	Nedlands, Western Australia 6009
	Telephone: (61 8) 9389 8033
	Facsimile: (61 8) 9389 7871
Stock Exchange Listing	The Company is Listed on the Australian Stock
	Exchange Limited under ASX Code - MRC

Mineral Commodities Limited Annual Financial Report for the year ended 31 December 2009

Contents

DIRECTORS’ REPORT	2
STATEMENTS OF COMPREHENSIVE INCOME	11
STATEMENTS OF FINANCIAL POSITION	12
STATEMENTS OF CASH FLOWS	13
STATEMENTS OF CHANGES IN EQUITY	14
NOTES TO THE FINANCIAL STATEMENTS	16
DIRECTORS’ DECLARATION	45
AUDITOR’S INDEPENDENCE DECLARATION	47
INDEPENDENT AUDITOR’S REPORT	48

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Directors Report

The Directors present their report together with the financial report of Mineral Commodities Limited (“the Company”) and its controlled entities (the “Group”) for the year ended 31 December 2009.

DIRECTORS

The Directors of the Company in office during or since the end of the financial year are:

. Mr Joseph A Caruso – Non Executive Chairman

• . Mr Mark V Caruso – Non Executive Director

• . Gregory Hugh Steemson – Managing Director

Directors have been in office since the start of the financial year to the date of this report.

DIRECTORS’ INFORMATION

Joseph Anthony Caruso (64 Years of Age)

Non-Executive Chairman

Mr Caruso is a Director of Zurich Bay Holdings Pty Ltd and Construction Manager of Simto Australia Pty Ltd, both of which are involved in mining, earthmoving and civil engineering construction earthworks. Mr Caruso has considerable experience in managing and administration of engineering, mining, raw materials production operations, earthmoving and related infrastructure utilities services resource contracts. Mr Caruso has been a director of Mineral Commodities Limited since September 2000.

Mark Victor Caruso (48 Years of Age)

Managing Director

Mr Caruso is a Director of Zurich Bay Holdings Pty Ltd and Simto Australia Pty Ltd, both of which are involved in mining, earthmoving and civil engineering construction earthworks. Mr Caruso has been a director of Mineral Commodities Limited since September 2000. He is also a Director of Allied Gold Limited. Former directorships of public listed companies in the last 3 years are CI Resources Limited from October 2003 to May 2007.

Gregory Hugh Steemson (56 Years of Age)

Non Executive Director

Mr Steemson is a qualified Geologist and Geophysicist with an extensive background in exploration, development and management of mining projects. Mr Steemson has been a Director of the Company since April 2001. Mr Steemson is also a Director of Allied Gold Limited. Former directorships of public listed companies in the last 3 years include Sandfire Resources Limited from June 2003 to August 2007 and Carbine Resources Limited from December 2008 to March 2010.

Due to the size of the Company, all directors consider matters which would normally be dealt with by Audit and Remuneration Committees.

COMPANY SECRETARY

Peter Torre CA, ACIS, MAICD

Mr Torre was appointed Company Secretary of Mineral Commodities Limited in July 2006. He is a Chartered Accountant and a Chartered Secretary. He was previously a partner of an internationally affiliated firm of Chartered Accountants. Mr Torre is the Company Secretary of several ASX listed companies and is a Director of ORT Limited.

PRINCIPAL ACTIVITIES

The principal activity of the Group during the year was undertaking procedures for the development of mineral sands projects and investigations into other mineral resources. This has mainly involved the evaluation of the Xolobeni Mineral Sands Project in the Eastern Cape Province of South Africa and the Tormin Mineral Sands Project in the Western Cape Province of South Africa.

There were no significant changes in the nature of activities of the Group during the year.

• 2 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Directors Report (continued)

CONSOLIDATED RESULTS

The loss of the group after income tax and non-controlling interests was $642,991 (2008: Loss of $1,515,661).

DIVIDENDS

No dividends have been paid, declared or recommended for payment, in respect of the current financial year.

REVIEW OF OPERATIONS AND FUTURE DEVELOPMENTS

Highlights of the Company’s operations for the period under review are as follows:

South African Projects

Xolobeni Mineral Sands Project

In March 2007, Mineral Commodities Limited’s (“MRC’s”) majority owned South African subsidiary Transworld Energy and Minerals Resources SA Pty Ltd (“TEM”) lodged the Mining Right Application for the Xolobeni Project with the Department of Minerals and Energy (“DME”).

On 4 August 2008 MRC announced that it had received notification from the DME that the Mining Right for the Kwanyana block within the Xolobeni Project area would be granted. The remaining blocks (Sikombe, Mnyameni and Mpahlane) would then be held under a Prospecting Right valid to 2010 which could be extended until applications are made to convert each block into a Mining Right.

The Kwanyana block represents approximately 30% of the mining area and contains around 46% of the total insitu ilmenite resource.

However, in September 2008, the Company was advised that, on behalf of the AmaDiba Crisis Committee (“ACC”) and its members, the Grahamstown office of the Legal Resources Centre filed a Notice of Appeal (“the Appeal”) with the Minister of the DME. The ACC requested the Minister to suspend and then appeal the decision to grant the Mining Right.

MRC believes that due to the importance of the Xolobeni Project to the area, the Minister will continue to support the issuing of the Xolobeni Mining Right, however, the issue date has been deferred pending the outcome of the Appeal. The Company has therefore taken steps to minimise expenditure on the project pending a resolution of the Appeal.

Tormin Mineral Sands Project

The Tormin Mineral Sands Project is located on the west coast of South Africa, approximately 400km north of Cape Town. The main minerals of interest are zircon and rutile which are contained in a high grade beach placer deposit north of the Oliphants River outfall. Previous studies have demonstrated that the Tormin Project can produce an enriched non-magnetic saleable concentrate containing predominately zircon and rutile. The base case production model consists of an annual production of 30,000 to 40,000 tonnes of concentrates grading up to 80% zircon and 10% rutile.

As announced on the 24[th] of June 2009, the Company commissioned K’Enyuka, a South African engineering firm, to undertake a Definitive Feasibility Study for the Project. The results of the study have been incorporated in a financial model developed on behalf of the Company by MSP Engineering Pty Ltd, a Perth based resource consultancy firm specialising in industrial minerals.

The Base Case investigated by K’Enyuka is based on hydraulic mining of the beach deposits and hydraulically transferring the sand from the beach to a stockpile ahead of a primary gravity circuit. Mining operations are to be conducted on a day shift basis only and surplus mining and stockpile capacity has been incorporated to accommodate for tidal and adverse weather events.

The primary spiral plant is designed for a nominal throughput capacity of 1.6 Mtpa and comprises a primary spiral circuit for removal of silica and light heavies followed by a wet high intensity magnetic separation (WHIMS) circuit for removal of magnetic minerals including ilmenite and garnet which are subsequently hydraulically transferred back to the beach for deposition as tailings with the silica fraction.

The resultant non-magnetic concentrates, rich in zircon and rutile, are exported as a combined concentrate.

• 3 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Directors Report (continued)

The salient results of the K’Enyuka study were released in the quarterly reports lodged during the period. During the course of the study there was a number of value adding opportunities identified which have been modelled at desktop level by MSP as part of trade off and optimisation studies.

The trade off and optimisation studies considered the following two primary opportunities being an optimisation of the Base Case and a beach concentrator model. Both of these options showed favourable economics. The Project also has substantial garnet resources. The plant design allowed for the extraction of the +200 micron fraction garnet but this aspect was not included in the operating costs and the operating synergies arising.

The Company is currently in discussions with potential investors and its existing Black Empowerment Partner to determine the economics of an upfront divestment of this Project versus the risk/reward to the Company of its development.

Investment in Africa Uranium Limited

As advised during the period, MRC elected to not proceed to stage 2 funding of Africa Uranium’s (“AUL”) exploration activities in Africa. During the period, MRC was issued with a further 10% interest in AUL as compensation for the exploration undertaken by MRC during the stage 1 funding.

During the period, Cape Lambert Resources Limited obtained a 10% beneficial interest in AUL and in late 2009 undertook two drilling programmes on AUL’s Hoasib Project. In its ASX release on 20 January 2009, Cape Lambert Resources Limited advised that the results from the programmes were promising and in line with expectations.

In March 2010, Oklo Uranium Limited announced that it had entered into a transaction with Africa Uranium Limited to acquire its 70% interest in the Hoasib project for an estimated value of approximately $20 million.

Investment in Petro Ventures International Limited

The Company holds a 9.31% interest in Petro Ventures International Limited (“Petro Ventures”). Petro Ventures has interests in two project areas which are located in offshore Romania and onshore Hungary. Petro Ventures’ working interest in the projects is 20% and 10% respectively.

Petro Ventures and its partners continue to develop these projects. Based on results to date, the Romanian project is likely to be commercial. The project in Hungary is in the early stages of exploration.

Investment in Allied Gold Limited (ASX listed: ALD)

MRC currently holds approximately 9.5 million shares of ALD’s issued fully paid ordinary shares.

Allied Gold undertook a significant level of corporate activity during the second half of the year with the successful takeover of Australian Solomons Gold Limited, the listing of its securities on the Toronto Stock Exchange and the completion of a $150 million capital raising to undertake the expansion initiatives at its Simberi Oxide Project and the Development of the Gold Ridge Project in the Solomon Islands.

During the period, the Company divested certain parcels of shares held in Allied in order to assist with working capital funding.

FINANCIAL POSITION

The net assets of the group have decreased by $1,495,460 from $21,339,716 at 31 December 2008 to $19,844,256 at 31 December 2009.

FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES

The company will continue the process of development of both the Tormin and Xolobeni projects in South Africa. The Board will continue to review other projects and opportunities in the interest of increasing shareholder value.

ENVIRONMENTAL REGULATIONS

The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report annual greenhouse gas emissions and energy use in Australia. For the first measurement period the directors have assessed that there are no current reporting requirements, but may be required to do so in the future.

• 4 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Directors Report (continued)

In the course of its normal mining and exploration activities, the Company adheres to environmental regulations imposed upon it by the relevant regulatory authorities, particularly those regulations relating to ground disturbance and the protection of rare and endangered flora and fauna.

SCHEDULE OF MINING TENEMENTS

Mining tenements currently held by the economic entity are:

Area	Entity holding the interest	% Held	Title	Status
Xolobeni – South Africa	Transworld Energy & Minerals Resources	100	New order Prospecting Right and Mining Right over Kwinyana Block	Granted – subject to appeal
Tormin – South Africa	Mineral Sands Resources	100	Mining Right	Granted

SIGNIFICANT CHANGES IN STATE OF AFFAIRS AND LIKELY DEVELOPMENTS

The following significant changes in the state of affairs of the Consolidated Entity occurred during the year:

OPTIONS

• In July 2009, 57,357,208 listed options to acquire shares at 20cents with an expiry date of 31 December 2012 were issued under the terms of a non-renounceable entitlement at an issue price of $0.005 per option to raise $286,786 excluding costs.

• 2,250,000 unlisted options over ordinary shares were not exercised and expired during 2009.

Options do not entitle the holder to receive a dividend paid to ordinary shareholders.

New issues of options and options exercised in the period are as follows:

Listed options	No of Options	Exercise Price	Expiry date
Opening Balance 31 December 2008	-	-	-
- Options issued	57,357,208	20 cents	31 December 2012
- Options Exercised	-
Balance at 31 December 2009	57,357,208	-	-

Unlisted Options	No of Options	Exercise Price	Expiry date
Opening Balance 31 December 2008	2,250,000	Various	Various
- Options Exercised	-	-	-
- Options Lapsed	(2,250,000)	Various	Various
Balance at 31 December 2009	-	-	-

• 5 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Directors Report (continued)

DIRECTORS’ SHAREHOLDING INTERESTS

The relevant interest of each director in the share capital of the Company, shown in the Register of Directors’ Shareholding at the date of the Directors’ Report is:

of the Directors’ Report is:
2009
	Balance at	Received as	Options		Net change	Balance
Ordinary Shares	1 January ‘09	Remuneration	Exercised		other	31 Dec ‘09
Mark Caruso -Indirect	18,450,988	-		-	600,000	19,050,988
- Direct	12,627	-		-	-	12,627
Joseph Caruso	18,450,988	-		-	600,000	19,050,988
Greg Steemson	1,510,000	-		-	-	1,510,000

J A Caruso and M V Caruso are both directors of and have a relevant interest in Zurich Bay Holdings Pty Ltd, which holds 19,050,988 shares in the Company.

2009
Listed Options	Balance at 1 January '09	Granted as Remuneration	Options Exercised	Options Lapsed		Net change other	Balance at 31 Dec '09
Mark Caruso	-	-	-		-	7,380,396	7,380,396
Joseph Caruso	-	-	-		-	7,380,396	7,380,396
Greg Steemson	-	-	-		-	604,000	604,000

MEETINGS OF DIRECTORS

The number of directors meetings and number of meetings attended by each of the directors of the Company during the financial year are:

	Meetings Held	Meetings Attended
J A Caruso	3	3
M V Caruso	3	3
G H Steemson	3	3

Other many matters of board business have been resolved by circular resolutions of directors, which are a record of decisions made at a number of informal meetings of the directors held to control, implement and monitor the Company’s activities throughout the year.

• 6 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Directors Report (continued)

REMUNERATION REPORT (Audited)

The remuneration report is set out under the following main headings:

• A. Principles used to determine the nature and amount of remuneration

• B. Details of remuneration

• C. Service Agreements

• D. Share-based compensation

• E. Additional Information

The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.

A. Principles used to determine the nature and amount of remuneration

In order to retain and attract executives of sufficient calibre to facilitate the efficient and effective management of the Company’s operations, the board reviews the remuneration packages of all directors and executive officers on an annual basis and makes recommendations. Remuneration packages are reviewed with due regard to performance and other relevant factors.

Remuneration packages may contain the following key elements:

• (a) Directors Fees;

• (b) Salary & Consultancy; and

• (c) Benefits – including provision of motor vehicle, superannuation.

Fees payable to non-executive directors reflect the demands which are made on, and the responsibilities of the directors. The Board reviews non-executive directors’ fees and payments annually.

Executives are offered a competitive base pay that consists of fixed components. Base pay for senior executives is reviewed annually to ensure the executives pay is competitive with the market. Total Base Pay can be structured as a total employment package which may be delivered as a combination of cash and prescribed non-financial benefits at the executives’ discretion.

There were no short or medium term cash incentives provided to any executives of the company during the financial year. Short or medium term cash incentives are not incorporated into any executives salary packages at the time of this report.

The directors are not required to hold any shares in the company under the constitution of the company; however, to align directors’ interests with shareholders interests the directors are encouraged to hold shares in the company.

Remuneration is not directly related to company performance or key performance indicators.

The board has no separate remuneration committee due to the size of the company. The directors perform the role of a remuneration committee as disclosed in the Corporate Governance statement.

B. Details of Remuneration

The key management personnel of Mineral Commodities Ltd Group are the directors of Mineral Commodities Ltd and the Company Secretary Mr Peter Torre who reported directly to the Managing Director. The amounts disclosed are therefore applicable for both Mineral Commodities Limited and the Mineral Commodities Limited Group.

Details of the remuneration of directors and the key management personnel (as defined in AASB 124 Related Party Disclosures) of Mineral Commodities Limited and the Mineral Commodities Limited Group are set out in the following tables.

There are no long term benefits amounts due to Directors and key management personnel.

• 7 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Directors Report (continued)

			Post	Share- based payments		Percentage performanc e based
		Short-term bfit	employment
		enes	benefits
		$	$	$	Totals $
Non Executive Directors
Joe Caruso	2009 44,037 2008 44,037		3,963 3,963	- -	48,000 48,000	- -
Mark Caruso	2009 48,000		-	-	48,000	-
	2008 48,000		-	-	48,000	-
Sub-total non executive directors	2009 2008 92,037 92,037		3,963 3,963	-	96,000 96,000	- -
Executive Directors
Greg Steemson	2009 188,200 2008 68,200		- -	- -	188,200 68,200	- -
Other Key Management Personnel
Peter Torre	2009 72,000 2008 72,000		- -	- -	72,000 72,000	- -
Total Key management personnel compensation	2009 2008 352,237 232,237		3,963 3,963	- -	356,200 236,200	- -

No options were issued to Directors or other Key Management Personnel during 2009 or the previous year as part of their remuneration.

C. Service Agreements

Mr Gregory Steemson was appointed as Managing Director of Mineral Commodities Limited in May 2009.

In accordance with the terms of the agreement with Mr Steemson, he was paid a fix sum of $20,000 per month. There are no short or long term incentives to be provided to Mr Steemson and there is no specific term to his tenure.

The Company may terminate the contract by the provision of a 1 month notice period. Mr Steemson may terminate the contract by the provision of two months notice. There are no payments upon termination of the contract.

There were no other service agreements.

D. Share Based Compensation

No options or shares were issued to Directors or other Key Management Personnel during 2009 or the previous year as part of their remuneration.

• 8 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Directors Report (continued)

E. Additional Information

There is no additional information to be provided in respect to the remuneration of the directors.

End of the Audited Remuneration Report

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Mineral Commodities Limited adhere to strict principles of corporate governance. The Company’s Corporate Governance statement will be included before the Additional ASX Information section of the Annual Financial Report.

SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

No event or transaction has arisen in the interval between the end of the financial year and the date of this report of a material and unusual nature likely other than what has been disclosed elsewhere in this financial report, in the opinion of the Directors of the Company, to affect significantly the operations of the Company or the Consolidated Entity, the results of those operations or the state of affairs of the Company or the Consolidated Entity in future financial years unless otherwise disclosed in this Directors Report.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

INSURANCE OF OFFICERS

During the financial year the Company has paid an insurance premium to insure the directors and secretaries of the company and its controlled entities. The premium paid was $34,300 representing $11,433 per director. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the company.

AUDITOR’S INDEPENDENCE DECLARATION

The Auditor’s Independence Declaration as required by Section 307(C) of the Corporations Act 2001 is set out on page 46 and forms part of this report.

NON-AUDIT SERVICES

The company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the company and/or the group are important.

There were no non–audit services provided by BDO Audit (WA) Pty Ltd in the year.

• 9 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Directors Report (continued)

During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non related firms:

Audit Services:	$
BDO Audit (WA) Pty Ltd
Audit and review of financial reports	48,752
Non BDO audit firm (Tuffias Sandberg)	6,364
Total remuneration for audit services	55,116

BDO Audit (WA) Pty Ltd continues in office.

This report has been made in accordance with a resolution of the Directors.

==> picture [139 x 40] intentionally omitted <==

Gregory Steemson Perth, Western Australia 31 March 2010

• 10 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Statements of Comprehensive Income

For the year ended 31 December 2009

	Note	Consolidated	Consolidated		Company
		2009	2008	2009	2008
		$	$	$	$
Revenue from continuing operations	2	995,439	609,221	1,621,539	1,104,875
Administration expenses		(567,677)	(715,165)	(542,129)	(798,978)
Employees and consultants remuneration		(270,906)	(209,772)	(270,906)	(209,772)
Depreciation and amortisation		(14,356)	(17,942)	(12,226)	(16,399)
Exploration and evaluation costs	12	(133,783)	(157,663)	(133,783)	(157,663)
Finance costs		(16,239)	(3,157)	(15,926)	(3,157)
		(1,002,961)	(1,103,699)	(974,970)	(1,185,969)
(Loss) / Profit from continuing operations		(7,522)	(494,478)	646,569	(81,094)
Income tax expense	4	-	-	-	-
(Loss) Profit from continuing operations		(7,522)	(494,478)	646,569	(81,094)
Loss from discontinued operations	5	(635,469)	(1,021,183)	(554,862)	(655,597)
(Loss) / Profit for the year		(642,991)	(1,515,661)	91,707	(736,691)
Other comprehensive income
Changes in the fair value of available-for- sale financial assets		(1,165,147)	2,859,509	(1,165,147)	2,859,509
Exchange differences on translation of foreign operations		(173,901)	578,059	(28,116)	(112,659)
Other comprehensive income for the year net of tax		(1,339,048)	3,437,568	(1,193,263)	2,746,850
Total comprehensive income for the year		(1,982,039)	1,921,907	(1,101,556)	2,010,159
Loss / Profit is attributable to:
Owners of Mineral Commodities Ltd		(642,991)	(1,515,661)	91,707	(736,691)
Non-controlling interest		-	-	-	-
		(642,991)	(1,515,661)	91,707	(736,691)
Total comprehensive income for the year is
attributable to
Owners of Mineral Commodities Ltd		(1,982,039)	1,921,907	(1,101,556)	2,010,159
Non-controlling interest		-	-	-	-
		(1,982,039)	1,921,907	(1,101,556)	2,010,159
Earnings/(Loss) per share from continuing operations		attributable to the	ordinary equity holders of the company.
Basic Loss per share		cents	cents
From continuing operations attributable to
the ordinary shareholders of the company		0.01	0.040
(cents per share)
From discontinued operations (cents per share)		0.45	0.82
Total basic loss per share attributable to the
ordinary equity holders of the company		0.046	1.2
(cents per share)

The above statements of comprehensive income should be read in conjunction with the accompanying notes.

• 11 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Statements of Financial Position as at 31 December 2009

Note CURRENT ASSETS Cash and cash equivalents 7 Trade and other receivables 8 Available for sale financial assets 9 Other current assets 10 Non - current asset held for sale Total Current Assets NON-CURRENT ASSETS Property, plant and equipment 11 Exploration & development expenditure 12 Other financial assets 13(b) Trade and other receivables 15 Total Non-Current Assets Total Assets CURRENT LIABILITIES Trade and other payables 16 Provisions Total Current Liabilities Total Liabilities NET ASSETS EQUITY Contributed equity 17 Reserves 18 Accumulated losses Parent entity interest Non-controlling interest 14 TOTAL EQUITY	Consolidated Company 2009 2008 2009 2008 $ $ $ 153,566 797,328 151,739 256,698 539,358 2,242,278 28,524 2,088,241 6,070,777 6,957,094 6,070,777 6,957,094 13,351 13,145 13,351 13,145 165,639 - 165,639 -
	6,942,691 10,009,845 6,430,030 9,315,178
	26,515 373,060 22,664 367,316 13,159,249 12,026,008 - - 6 6 1,450,003 1,451,001 - - 14,240,022 11,841,568
	13,185,770 12,399,074 15,712,689 13,659,885
	20,128,461 22,408,919 22,142,719 22,975,063
	251,699 1,041,056 180,648 402,374 32,506 28,147 32,506 28,147
	284,205 1,069,203 213,154 430,521
	284,205 1,069,203 213,154 430,521
	19,844,256 21,339,716 21,929,565 22,544,542
	40,004,350 39,804,350 40,004,350 39,804,350 3,672,977 4,917,465 1,753,115 2,738,300 (24,011,920) (23,516,439) (19,827,900) (19,998,108)
	19,665,407 21,205,376 21,929,565 22,544,542 178,849 134,340 - - 19,844,256 21,339,716 21,929,565 22,544,542

The above statements of financial position should be read in conjunction with the accompanying notes.

• 12 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Statements of Cash Flows

For the year ended 31 December 2009

Note CASH FLOWS FROM OPERATING ACTIVITIES Exploration and development expenditure Interest received Payments to suppliers & employees Interest paid Sundry income Net cash (outflows) / inflows from operating activities 23(a) CASH FLOWS FROM INVESTING ACTIVITIES Payment for plant and equipment 11(a) Purchase of investments Proceeds from sales of investments Loans advanced to controlled entities Loans repaid by other entities Loans to other entities Net cash inflow/(outflow) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the issue of shares and options 17, 18 Net cash inflow from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year 7	Consolidated Company 2009 2008 2009 2008 $ $ $ $ (1,307,142) (1,882,412) (133,783) (157,663) 50,937 89,995 22,943 74,739 (494,587) (1,320,262) 1,057,226 (573,188) (16,239) (3,157) (15,926) (3,157) 100 2,664 100 2,664
	(1,766,931) (3,113,172) 930,560 (656,605)
	(28,942) (7,946) (28,704) (5,445) (1,488,644) (14,826) (1,488,644) (14,826) 2,154,216 1,387,407 2,154,216 1,387,407 - - (2,158,965) (2,972,460) - 1,070,000 - 1,070,000 - (1,070,000) - (1,070,000)
	636,630 1,364,635 (1,522,097) (1,605,324)
	486,578 368,000 486,578 368,000
	486,578 368,000 486,578 368,000
	(643,761) (1,380,537) (104,959) (1,893,929) 797,328 2,177,864 256,698 2,150,627
	153,566 797,327 151,739 256,698

The above statements of Cash Flows should be read in conjunction with the accompanying notes.

• 13 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Statements of Changes in Equity

Consolidated Entity For the year ended 31 December 2009 Balance at 1 January 2009 Loss for the year Exchange differences on translation of foreign operations Transfer to profit and loss on shares sold Changes in the fair value of available for sale financial assets Transfer from reserve – on expiry of options Total comprehensive income for the year Transactions with owners in their capacity as owners Contributions of equity net of transaction costs Issue of listed options net of costs Increase in non controlling interest Balance at the end of the year Parent Entity For the year ended 31 December 2009 Balance at 1 January 2009 Loss for the year Exchange differences on translation of foreign operations Transfer to profit and loss on shares sold Change in the fair value of available for sale financial assets Total comprehensive income for the year Contributions of equity net of transaction costs Issue of listed options net of costs Transfer from reserve – on expiry of options Balance at the end of the year	Contributed Equity Listed options reserve Accum- ulated Losses General Reserve Currency Translation Reserve Share Based Payments Reserve Financial Asset Revaluation Reserve Total Non-controlling interest Total Equity $ $ $ $ $ $ $ $ $ 39,804,350 - (23,516,438) 2,551,100 (584,211) 78,500 2,872,076 21,205,377 134,340 21,339,717 (642,991) (642,991) (642,991)) - - - (173,901) - - (173,901) - (173,901) (955,187) (955,187) (955,187) - - - - - (209,960) (209,960) - (209,960) - 78,500 - - (78,500) - - - - - (564,491) - (173,901) (78,500) (1,165,147) (1,982,039 - (1,982,039 - - - - - - - 200,000 - - - - 200,000 - 200,000 286,578 - - - - - 286,578 - 286,578 69,009 (113,518) (44,509) 44,509 - 40,004,350 286,578 (24,011,920) 2,437,582 (758,112) - 1,706,929 19,662,407 178,849 19,844,256 Contributed Equity Listed options Reserve Accumulated Losses Share Based payments Reserve Currency Translation Reserve Financial Asset Revaluation Reserve Total Equity $ $ $ $ $ $ 39,804,350 - (19,998,108) 78,500 (212,276) 2,872,076 22,544,542 - 91,707 91,707 - - - (28,116) (28,116) (955,186) (955,186) (209,960) (209,960) 91,707 (28,116) (1,165,147) (1,101,555) 200,000 200,000 286,578 286,578 - 78,500 (78,500) - - - 40,004,350 286,578 (19,827,900) - (240,392) 1,706,929 21,929,565	Contributed Equity Listed options reserve Accum- ulated Losses General Reserve Currency Translation Reserve Share Based Payments Reserve Financial Asset Revaluation Reserve Total Non-controlling interest Total Equity $ $ $ $ $ $ $ $ $ 39,804,350 - (23,516,438) 2,551,100 (584,211) 78,500 2,872,076 21,205,377 134,340 21,339,717 (642,991) (642,991) (642,991)) - - - (173,901) - - (173,901) - (173,901) (955,187) (955,187) (955,187) - - - - - (209,960) (209,960) - (209,960) - 78,500 - - (78,500) - - - -
		- (564,491) - (173,901) (78,500) (1,165,147) (1,982,039 - (1,982,039 - - - - - - - 200,000 - - - - 200,000 - 200,000 286,578 - - - - - 286,578 - 286,578 69,009 (113,518) (44,509) 44,509 -
		40,004,350 286,578 (24,011,920) 2,437,582 (758,112) - 1,706,929 19,662,407 178,849 19,844,256

• 14 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Statements of Changes in Equity

Consolidated Entity For the year ended 31 December 2008 Balance at 1 January 2008 Loss for the year Exchange differences on translation of foreign operations Transfer to profit and loss on shares sold Changes in the fair value of available for sale financial assets Total comprehensive income for the year Transactions with owners in their capacity as owners Contributions of equity net of transaction costs Balance at the end of the year Parent Entity For the year ended 31 December 2008 Balance at 1 January 2008 Loss for the year Exchange differences on translation of foreign operations Change in the fair value of available for sale financial assets Total comprehensive income for the year Contributions of equity net of transaction costs Balance at the end of the year	Contributed Equity Accum- ulated Losses General Reserve Currency Translation Reserve Share Based Payments Reserve Financial Asset Revaluation Reserve Total Non-controlling interest Total Equity $ $ $ $ $ $ $ $ 39,436,350 (22,000,777) 2,551,100 (1,162,270) 78,500 12,567 18,915,469 134,340 19,049,809 (1,515,661) (1,515,661) (1,515,661) - - - 578,059 578,059 - 578,059 - - - - 2,859,509 2,859,509 - 2,859,509
	- (1,515,661) - 578,059 - 2,859,509 1,921,907 - 1,921,907 - - - 368,000 - - 368,000 368,000
	39,804,350 (23,516,438) 2,551,100 (584,211) 78,500 2,872,076 21,205,376 134,340 21,339,716
	Contributed Equity Accumulated Losses Share Based payments Reserve Currency Translation Reserve Financial Asset Revaluation Reserve Total Equity $ $ $ $ $ $ 39,436,350 (19,261,417) 78,500 (99,617) 12,567 20,166,383 - (736,691) (736,691) - - - (112,659) (112,659) 2,859,509 2,859,509 (736,691) (112,659) 2,859,509 2,010,159 368,000 368,000 39,804,350 (19,998,108) 78,500 (212,276) 2,872,076 22,544,542

• 15 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Accounting

These financial statements are for Mineral Commodities Limited as the parent entity and Mineral Commodities Limited and controlled entities, as the consolidated entity. Mineral Commodities Limited is an Australian domiciled public listed company.

The general purpose financial statements for the year ended 31 December 2009 have been prepared in accordance with Australian Accounting Standards and Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

Compliance with IFRS

Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report of Mineral Commodities Limited as the Parent entity and Mineral Commodities Limited and controlled entities comply with International Financial Reporting Standards (IFRS).

Historical Cost Convention

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of available for sale financial assets for which the fair value basis of accounting has been applied.

The following significant accounting policies have been adopted in the preparation and presentation of the financial statements and have been consistently applied to all the years presented, unless otherwise stated.

(b) Principles of Consolidation

The consolidated financial report incorporates the assets and liabilities of all subsidiaries of Mineral Commodities Ltd (“Company” or “parent entity”) as at 31 December 2009 and the results of its subsidiaries for the year then ended. Mineral Commodities Ltd and its subsidiaries together are referred to in this financial report as the consolidated entity.

Intercompany transactions, balances and unrealised gains on transactions between parent and or subsidiary companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the parent company.

Subsidiaries are those entities over which the Parent company has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights.

Where control of an entity is obtained during a financial year, its results are included in the statements of comprehensive income from the date on which control commences. Where control of an entity ceases during a financial year, its results are included for that part of the year during which control existed.

The purchase method of accounting is used to account for the acquisition of subsidiaries – refer to note (f).

The Consolidated entity applies a policy of treating transactions with minority interests as transactions with external parties to the entity. Disposals to minority interests result in gains and losses for the Consolidated entity are recorded in the statement of comprehensive income. Purchases from minority interests result in goodwill, being the difference between any consideration paid and the relevant share acquired of the carrying value of identifiable net assets of the subsidiary.

• 16 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Principles of Consolidation (continued)

Investments in subsidiaries are accounted for at cost less impairment in the individual financial statements of Mineral Commodities Limited.

(c) Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Interest Income

Interest and other income is recognised as it accrues on a time proportion basis using the effective interest method.

(d) Taxes

Income taxes

The charge for current income tax expense or revenue is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the date of the Statements of Financial Position. Income tax expense is adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where this has no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions or deductibility imposed by the law.

The income tax expense for the year is calculated using the 30% tax rate (2008: 30%).

Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST except where the GST incurred on a purchase of goods & services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and where receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables in the Statements of Financial Position.

Cash flows are included in the Statements of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows.

• 17 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(e) Foreign Currency Transactions and Balances

Functional and presentation currency

The functional currency of each of the group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rated prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the profit for the year except where deferred in equity as a qualifying net investment hedge.

Subsidiary Companies

The financial results and position of subsidiary companies whose functional currency is different from the consolidated entities presentation currency are translated into the presentation currency as follows;

Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date.

Income and expenses are translated at average exchange rates for the period.

Hedge of a net investment in a foreign operation

The group applies hedge accounting to foreign currency differences arising between the functional currency of the foreign operation and the parent entity’s functional currency (AUD), regardless of whether the investment is held directly or through an intermediate parent.

Foreign currency differences arising on the retranslation of a financial liability designated as a hedge of a net investment in a foreign operation are recognised in other comprehensive income to the extent that the hedge is effective, and are presented within equity in the foreign currency translation reserve. To the extent that the hedge is ineffective, such differences are recognised in profit or loss. When the hedged part of a net investment is disposed of, the relevant amount in the foreign currency translation reserve is transferred to profit or loss as part of the profit or loss on disposal.

(f) Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Items of plant and equipment are initially recorded at cost and includes any expenditure that is directly attributable to acquisition of the items. Subsequent costs are included in the assets carrying amount or recognised as a separate asset as appropriate. All other repairs and maintenance are charged to the profit for the year in which they are incurred.

Depreciation of Plant and Equipment

Plant and equipment are depreciated at rates based upon the expected useful lives of these assets. The expected useful lives of these assets are 3-10 years.

The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An assets carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater than its estimated recoverable amount.

• 18 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Disposal of Assets

The gain or loss on disposal of assets is calculated as the difference between the carrying amount of the asset at the time of disposal and the proceeds on disposal and is included in profit for the year of disposal.

(g) Exploration and Development Expenditure

Costs incurred during the exploration and development stages of specific areas of interest are accumulated. Such costs are only carried forward if they are expected to be fully recouped through the successful development of the area, or where activities to date have not yet reached a stage to allow reasonable assessment regarding the existence of economically recoverable reserves, otherwise this expenditure is recognised in the profit for the year. Costs are written off as soon as an area has been abandoned or considered to be non-commercial or impaired where an area is considered non-commercial at the period end.

Once production commences, expenditure accumulated in respect of areas of interest is amortised on a unit of production basis over the life of the total proven economically recoverable reserves. Restoration costs recognised in respect of areas of interest in the exploration and evaluation stage are carried forward as exploration and evaluation expenditure. Costs recognised after the commencement of production in areas of interest will be charged to the profit for the year.

(h) Investments

Interests in Subsidiaries

Investments in subsidiaries are carried in the Company’s financial report at cost less any impairment losses. Dividends and distributions are brought to account in profit when they are declared by the subsidiaries.

Investments in associates

Associates are all entities over which the Consolidated entity has significant influence but not control, generally accompanying a shareholding of between 20%-50% of the voting rights. Investments in associates are accounted for in the parent entity financial statements using the cost method and in the consolidated financial statements using the equity method of accounting, after initially being recognised at cost. The Consolidated entity’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.

The Consolidated entity’s share of its associates post acquisition profits or losses is recognised in profit for the year, and its share of post acquisition movements in reserves is recognised directly in reserves. The cumulative post acquisition movements are adjusted against the carrying amount of the investment.

(i) Impairment of Assets

At each reporting date, the Consolidated entity reviews the carrying values of it tangible assets and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over it recoverable amount is expensed to the income statement.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

(j) Financial Instruments

The Consolidated entity classifies its financial instruments on initial recognition. The classification depends on the purpose for which the financial instrument was acquired.

• 19 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recognition and derecognition

Regular purchases and sales of financial assets are recognised on trade date; the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or been transferred and the Group has transferred substantially all the risks and rewards of ownership.

(k) Financial Instruments (continued)

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value of all unlisted securities, including recent arm’s length transactions, reference to similar instruments and other pricing models.

Loans and receivables

Loans and receivables are recognised initially at fair value and subsequently at amortised cost using the effective interest rate method. They are included within current assets, except for those with maturities greater than 12 months after the reporting date which are classified as non-current assets.

Available-for-sale financial assets

Available-for-sale financial assets are recognised at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity until the instrument is sold at which time any balance in equity relating to the instrument is recycled to the income statement as part of the profit or loss on sale.

Financial Liabilities

Financial liabilities are recognised initially at fair value and subsequently

at amortised cost, comprising original debt less principle payments and amortisation of transaction costs.

Impairment

At each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a significant or prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement. Impairment losses recognised on equity instruments classified as available for sale are not reversed through the income statement.

(l) Contributed Equity

Ordinary share capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(m) Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

(n) Earnings /(Loss) per Share

Basic Earnings /(Loss) per Share

Basic earnings per share is determined by dividing the profit after income tax attributable to members of Mineral Commodities Ltd by the weighted average number of ordinary shares outstanding during the financial year.

Diluted Earnings /(Loss) per Share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking into account amounts unpaid on ordinary shares and any reduction in earnings per share would arise from the exercise of options outstanding at the end of the financial year.

• 20 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(o) Employee Benefits

Wages and Salaries, Annual Leave and Sick Leave

Provision is made for the consolidated entity’s liability for employee entitlements arising from services rendered by employees to balance date. These benefits include annual leave. Sick leave is non-vesting and has not been provided for. Employee entitlements expected to be settled within one year have been measured at the amounts expected to be paid when the liabilities are settled and are recognised in other payables.

The contributions made to defined contribution superannuation funds by entities within the consolidated entity are charged against profits when due.

Share-Based Payments

Share-based compensation benefits are provided to employees via the Mineral Commodities Employee Incentive Option Scheme. Information relating to this scheme is set out in Note 26.

The fair value of options granted under the Mineral Commodities Employee Incentive Option Scheme is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employee becomes unconditionally entitled to the options.

The fair value at grant date is independently determined using a Binomial option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

(p) Leases

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised on a straight line basis.

(q) Segment reporting

The Group has applied AASB 8 “Operating Segments” from 1[st] January 2009. AASB 8 requires a “management approach” under which segment information is presented on the same basis as that used for internal reporting purposes. This has resulted in an increase in the number of reportable segments presented. The previously reported “Africa” segment has been disaggregated into the two areas of interest “Tormin” and “Xolobeni”.

Operating segments are now reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Directors that make strategic decisions. There is no goodwill attached to any of the segments. There has been no impact on the measurement of the assets and liabilities reported for each segment. Comparatives for 2008 have been restated on the new basis of reporting.

(r) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.

(s) Comparatives

Where required by Accounting Standards comparative figures have been adjusted to conform with changes in presentation for the current financial year.

• 21 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

(t) Non-current assets (or disposal groups) held for sale and discontinued operations

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale or transaction rather than continuing use. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets, investment property and non-current biological assets that are carried at fair value.

An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increase in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.

A discontinued operation is a component of the entity that has been disposed of or has been abandoned, or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single coordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of the income statement.

(u) Critical accounting estimates and judgements

The Group makes significant estimates and judgements concerning the future. The resulting accounting estimates may not equal the related actual results. The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Critical Accounting Estimates

The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Significant judgements and critical estimate in applying the entity’s accounting policies

Impairment

During the year, the consolidated entity impaired its property, plant and equipment (Note 11), in relation to the Sierra Leone assets as the directors have assessed that these amounts are no longer recoverable. In the parent entity, intercompany loans totalling $358,373 (2008: $1,446,278 ) (Note 15) have been impaired in the 2008 year as they have been assessed as non recoverable. Although the net assets of the group are less than the parent, the intercompany loans are considered to be recoverable through the future development of the tenements held by the subsidiaries or by sale.

Available for sale financial assets

During the year, the company sold 5 milllion shares in Allied Gold Limited, and in 2008 that company restructured their Board such that it is considered that MRC has lost significant influence (Note 13(a)). The Directors have reclassified the remaining investment in Allied Gold as “available for sale” financial assets because (they intend to hold the investments to earn benefits in the medium to long term increases in the value of these investments) or (they do not meet the criteria to be held as financial assets through profit and loss as they are not monitored and evaluated on a fair value basis).

Exploration and development expenditure

Recoupment of the capitalised exploration and evaluation expenditure is dependant on the successful development and commercial exploitation of the Xolobeni Mineral Sands and the Tormin Mineral Sands areas of interest in South Africa. The capitalised expenditure in relation to the Xolobeni project is expected to be fully recoverable once the grant of the mining right has been affirmed by the Minister of Minerals and Energy in South Africa and the Company proceeds to further develop this project.

• 22 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Investment in Unlisted Entities

Investments in unlisted entities have been measured using valuation models. Assumptions and estimates have been used in these valuations models. Should any of these assumptions or estimates change, this could significantly effect the carrying values of theses investments.

(v) Accounting Standards not yet effective

Australian Accounting Standards that have recently been issued or amended but are not yet effective for the parent and consolidated entity have not been adopted for the annual reporting period ended 31 December 2009.

Reference	Title	Summary	Application date of standard*	Impact on Group financial report	Application date for Group*
AASB 3 (Revised)	Business Combinations	The revised standard introduces a number of significant changes to the accounting for business combinations.	1 July 2009	Unless the Group enters into Business Combinations in the future, this standard is not applicable and will therefore have no impact.	1 January 2010
AASB 2008-3	Amendments to Australian Accounting Standards arising from AASB 3 and AASB 127	Amending standard issued as a consequence of revisions to AASB 3 and AASB 127.	1 July 2009	Unless the Group enters into Business Combinations in the future, this standard is not applicable and will therefore have no impact.	1 January 2010
AASB 9 (issued December 2009)	Financial Instruments	Amends the requirements for classification and measurement of financial assets	Periods beginning on or after 1 January 2013	Due to the recent release of these amendments and that adoption is only mandatory for the 31 December 2013 year end, the entity has not yet made an assessment of the impact of these amendments.	1 January 2010

• designates the beginning of the applicable annual reporting period unless otherwise stated.

No other standards, interpretations or amendments which have been issued are expected to have an impact on the group.

• 23 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

2. OTHER REVENUE FROM CONTINUING OPERATIONS

Interest Interest revenue from unrelated entities Interest revenue from controlled entity Other Income Profit from sales of investments in listed companies Management fees Miscellaneous and other income Total Revenue from continuing operations From discontinued operations Promet settlement Other income Note 5	Consolidated Company 2009 2008 2009 2008 $ $ $ $ 50,937 89,995 22,943 74,739 - - 553,453 415,225
	50,937 89,995 576,396 489,964
	944,402 471,562 944,402 471,562 - 45,000 100,641 140,685 100 2,664 100 2,664
	944,502 519,226 1,045,143 614,911
	995,439 609,221 1,621,539 1,104,875
	- 2,000,000 - 2,000,000 - 6,859 - -
	- 2,006,859 - 2,000,000

3. EXPENSES

	Consolidated	Consolidated		Company
	2009	2008	2009	2008
	$	$	$	$
Loss before income tax has been arrived at after
charging the following:
Exploration expenditure written off	133,783	157,663	133,783	157,663
Operating lease rentals	70,133	70,133	70,133	70,133
Depreciation - plant and equipment	14,356	17,942	12,226	16,399
Superannuation contributions	14,329	26,350	14,329	19,876
Movement in provision for employee entitlements	4,359	(60,336)	4,359	(60,336)

• 24 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

4. INCOME TAX

The components of current income tax expense comprise: Current taxation Income tax (benefit) reported in the income statement The prima facie tax on loss before income tax is reconciled to the income tax expense as follows: (Loss) / Profit before income tax Prima facie tax payable / (benefit) on loss @ 30% (2007:30%) Non allowable items Non-assessable income Net deferred tax assets not brought to account Benefit of losses not previously brought to account Income tax expense / (benefit) Future income tax benefit arising from un-recouped deductions at balance date, for Australian tax resident entities. Revenue losses Capital losses	Consolidated Company 2009 2008 2009 2008 $ $ $ $ - - - -
	- - - -
	(642,991) (1,515,661) 91,707 (736,691)
	(192,897) (454,698) 27,512 (221,007) (542,252) 427,222 (418,564) 917,548 (43,110) (43,110) (43,110) (43,110) 778,259 70,586 434,163 (653,430) - - - -
	- - - -
	3,984,681 3,644,600 1,934,806 1,726,016 4,689,637 4,689,637 4,689,637 4,689,637

In addition the economic entity has unconfirmed tax losses and accumulated exploration expenditure that gives rise to potential carry forward tax benefits in South Africa amounting to approximately Rand 86 million (approximately A$13m (2008: A$2m)). The benefit of these potential deferred tax assets has not been brought to account, and will only be realised if circumstances similar to those described above, also apply to the economic entity’s future operations in South Africa.

There are no franking credits available.

• 25 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

5 DISCONTINUED OPERATIONS

(a) Description

Kariba Kono (SL) Ltd

Following the ceasing of operations in 2008 and subsequent withdrawal from Sierra Leone further provisions have been made against the value of remaining plant and equipment held as available for sale.

(b) Financial performance and cash flow information

Revenue Promet settlement Other income Total revenue Expenses Site Operating expenses General & administration expenses Impairment of loans to subsidiaries Impairment of fixed assets Impairment of exploration asset Impairment of investment in Black hawk Oil & Gas Ltd Total expenses Loss before income tax Income tax expense (Loss after income tax from discontinued operations Net cash inflow/(outflow) from operating activities Net cash inflow /(outflow) from investing activities Net Cash used by discontinued operations (c) Carrying amounts of assets and liabilities Cash and cash equivalents Property plant and equipment Non – current assets held for sale Receivables & Prepayments Total Assets Trade Creditors Total Liabilities Net Assets	Consolidated Company 2009 2008 2009 2008 $ $ $ $ - 2,000,000 - 2,000,000 - 6,859 - -
	- 2,006,859 - 2,000,000 (314,220) (685,556) - (44,500) (125,758) (254,650) (998) (60,845) - (358,373) (1,446,278) (195,491) (1,104,766) (195,491) (1,003,974) - (983,070) - - - - - (100,000)
	(635,469) (3,028,042) (554,862) (2,655,597)
	(1,021,183) (554,862) (655,597) - - - -
	(635,469) (1,021,183) (554,862) (655,597)
	(439,978) (933,347) - (103,345) (195,491) (87,836) (554,862) (552,252)
	(635,469) (1,021,183) (554,864) (655,597)
	- 16,826 - - - 339,427 - 339,427 165,639 - 165,639 - 5 81,871 5 -
	165,644 438,124 165,644 339,427
	(46,024) (63,110) (46,024) -
	(46,024) (63,110) (46,024) 339,427
	119,620 375,014 119,620 339,427

• 26 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

5 DISCONTINUED OPERATIONS (cont’d)

Blackhawk Oil & Gas Ltd

This subsidiary company is dormant and has no assets, accordingly in 2008 a provision for impairment was made against the value of Mineral Commodities investment in and loans receivable from Blackhawk Oil & Gas Ltd.

		Company	Company
Amounts charged to the income statement		2009	2008
Impairment of the Investment in Blackhawk Oil & Gas Ltd		-	100,000
Impairment of Loan to Blackhawk Oil & Gas Ltd		-	34,708

6. SEGMENT INFORMATION

The Group has applied AASB 8 “Operating Segments” from 1[st] January 2009. AASB 8 requires a “management approach” under which segment information is presented on the same basis as that used for internal reporting purposes. This has resulted in an increase in the number of reportable segments presented. The previously reported “Africa” segment has been disaggregated into the two areas of interest “Tormin” and “Xolobeni”.

Operating segments are now reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors which makes strategic decisions. There is no goodwill attaching to any of the segments. There has been no impact on the measurement of the assets and liabilities reported for each segment. Comparatives for 2008 have been restated on the new basis of reporting.

There are two operating segments for South Africa, these are exploration and development projects one Tormin Mineral Sands held in Minerals Sands Resources Ltd and located on the West coast. The other is the Xolobeni Mineral Sands projected held in Transworld Energy and Minerals located on the East coast.

In Australia the Group operates in two segments, investing in the securities of unrelated entities and interest on the deposit of surplus funds. The other segment is the corporate overhead associated with the management and administration of the company’s projects and corporate administration.

- Revenue from operations Profit from sales of investments in listed companies Interest earned from unrelated entities Interest earned from controlled entity Management fees from controlled entity Other income Inter segment revenue Total segment revenue Segment results Profit / (Loss) before income tax	South Africa Australia Discontinued operations Totals Tormin Xolobeni Investing Corporate $ $ $ $ $ - - 944,402 - - 944,402 26,594 1,400 22,943 - - 50,937 - - - 553,453 - 553,453 - - - 100,641 - 100,641 - - - 100 - 100 - - - (654,094) - (654,094)
	26,594 1,400 967,345 100 - 995,439
	2 - 967,345 (974,869) (635,469) (642,991)

• 27 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

6. SEGMENT INFORMATION (Continued)

- Revenue from operations Gain from sales of investments in listed companies Interest earned from unrelated entities Interest earned from controlled entity Management fees from controlled entity Management fees from unrelated entity Other revenue Inter segment revenue Total segment revenue Segment results (Loss) / Profit before income tax Total segment assets 31 December 2009 31 December 2008	Africa Australia Discontinued operations Totals Tormin Xolobeni Investing Corporate $ $ $ $ $ - - 471,562 - - 471,562 7,316 7,316 75,363 - - 89,995 - - - 415,225 - 415,225 - - - 95,685 - 95,685 - - - 45,000 - 45,000 - - - 2,664 6,859 9,523 - - - (510,910) - (510,910)
	7,316 7,316 546,925 47,664 6,859 616,080
	1,383 (160) 546,925 (1,042,626) (1,021,183) (1,515,661) 1,383 (160) 546,925 (1,042,626) (1,021,183) (1,515,661) 3,953,063 9,722,704 6,070,777 216,278 165,639 20,128,461 2,962,423 9,665,306 6,957,094 2,725,400 98,697 22,408,920

• 28 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

7. CASH AND CASH EQUIVALENTS

Cash at Bank	Consolidated Company 2009 2008 2009 2008 $ $ $ $ 153,566 797,328 151,739 256,698
	153,566 797,328 151,739 256,698

The effective interest rate on cash at bank in 2009 was 3.00% (2008:6.38%)

(a) Interest rate risk exposure

The consolidated and parent entity’s exposure to interest rate risk is discussed in Note 24.

(b) Reconciliation to cash at the end of the year

The above figures represent the cash at the end of the financial year as shown in the Statement of Cash Flows.

8.

TRADE AND OTHER RECEIVABLES – CURRENT

Trade receivables Security deposits! Other receivables" Loans receivable from other entities	Consolidated Company 2009 2008 2009 2008 $ $ $ $ 167 54,026 167 54,026 423,352 12,934 - - 115,839 2,094,068 28,357 2,034,216 - 81,250 - -
	539,358 2,242,278 28,524 2,088,241

!

"

Includes a secured deposit of $410,574 with First Rand bank held as security for a performance guarantee issued by the Bank in favour of the South African Department of Minerals and Energy in respect of Mineral Sands Resources (Pty) Ltd obligations under the Tormin Mining right.

This amount includes a VAT refund of $69,629 due to Mineral Sands Resources from the South African Revenue Service.

(a) Fair Values and credit risk

Due to the short term nature of these receivables the carrying values represent their respective fair values as at 31 December 2009 and 2008.

The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above. Refer to Note 24 for more information on the risk management policy of the Group and the credit quality of the entity’s receivables.

(b) Foreign Exchange and Interest Rate Risk

Information about the Group’s and the parent entity’s exposure to foreign exchange and interest rate Risk in relation to trade and other receivables is provided in Note 24.

• 29 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

8. TRADE AND OTHER RECEIVABLES – CURRENT (Continued)

(c) Other Receivables

In 2008 an amount of $2,000,000 represented the settlement reached with Promet et al, which was received in January 2009. These amounts generally arise from transactions outside the usual operating activities of the Group and collateral is not normally obtained.

9. FINANCIAL ASSETS - CURRENT

Available for sale Investments Investments in companies listed on a recognised stock exchange - shares at fair value At the beginning of the year Re classify investment in Allied Gold Ltd from equity accounted investments Sales of shares in Allied Gold Ltd at FV 31/12/08 5 mill @ $0.42cents Disposal of other listed shares Fair value movement Total available for sale investments in companies listed on a recognised stock exchange Available for sale investment in companies not listed on a recognised stock exchanges At the beginning of the year Investment this year Fair value movement Total available for sale investments in companies not listed on a recognised stock exchange! Total Financial Assets - Current	Consolidated Company 2009 2008 2009 2008 $ $ $ 6,580,870 75,000 6,580,870 75,000 - 6,524,439 - 6,524,439 (2,100,000) - (2,100,000) - (65,000) - (65,000) - (938,387) (18,569) (938,387) (18,569)
	3,477,483 6,580,870 3,477,483 6,580,870
	376,224 361,398 376,224 361,398 1,488,643 14,826 1,488,643 14,826 728,427 - 728,427 -
	2,593,294 376,224 2,593,294 376,224
	6,070,777 6,957,094 6,070,777 6,957,094

Available for sale financial assets comprise investments in the ordinary share capital of various entities. There are no fixed returns or fixed maturity dates attached to these investments.

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

• 30 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

9. FINANCIAL ASSETS – CURRENT (Continued)

2009 Available for sale financial assets Total 2008 Available for sale financial assets Total	Level 1 Level 2 Level 3 Total 3,477,483 2,593,294 - 6,070,777
	3,477,483 2,593,294 - 6,070,777
	Level 1 Level 2 Level 3 Total 6,580,870 376,224 - 6,957,094
	6,580,870 376,224 - 6,957,094

Fair Value of Investment in Allied Gold Limited

The market value of this investment in Allied Gold at balance date was $3,423,673 based on a price per share of 32.5 cents. The investment by Mineral Commodities Ltd in Allied Gold Ltd was reclassified from equity accounted to fair value in 2008. refer note 13(a).

! Non listed investments have been valued as an approximate to their fair value using accepted valuation models. Inputs into the models have been based on market evidence where available, or on managements best estimate.

(a) Risk Exposure

Information about the Group’s and the parent entity’s exposure to credit risk, foreign exchange and interest rate risk is provided in Note 26.

10. OTHER – CURRENT

Prepayments 11. PROPERTY, PLANT AND EQUIPMENT (a) Plant and office equipment - at cost Accumulated depreciation Total property, plant and equipment Reconciliation of the carrying amount of plant & equipment at the beginning and end of the current and previous financial year Plant and office equipment Carrying amount at beginning of year Additions Impairment Depreciation Transferred to Available for sale assets Carrying amount at end of year	Consolidated Company 2009 2008 2009 2008 $ $ $ $ 13,351 13,145 13,351 13,145 307,753 663,628 178,312 530,425 (281,238) (290,568) (151,649) (163,109)
	26,515 373,060 26,663 367,316
	373,060 1,575,105 367,316 1,426,744 28,942 7,946 28,704 5,445 (195,491) (1,104,766) (195,491) (1,003,974) (14,356) (105,225) (12,226) (60,899) (165,639) - (165,639) -
	26,515 373,060 22,664 367,316

• 31 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

11. PROPERTY, PLANT AND EQUIPMENT (Continued)

(b) Non-current asset held for sale

Available for sale plant and equipment 165,639 - 165,639 -

During 2009 further adjustments to impairment losses of $195,491 (2008 $1,003,974) were brought to account in respect of the available for sale Plant and Equipment ex Sierra Leone. The impairment value has been calculated to write off the full carrying value less the estimated net sale value.

12. EXPLORATION AND DEVELOPMENT EXPENDITURE

	Consolidated	Consolidated		Company
	2009	2008	2009	2008
	$	$	$	$
Exploration expenditure - costs carried forward
in respect of areas of interest in:
Exploration and evaluation phases	13,159,249	12,026,008	-	-
Total exploration and evaluation expenditure	13,159,249	12,026,008	-	-
Reconciliation of the carrying amount of
exploration and development expenditure at the
beginning and end of the current and the
previous financial year.
Carrying amount at beginning of year	12,026,008	11,394,491	-	-
Expenditure during the year	1,394,052	2,505,464	133,783	157,663
Impairment of exploration expenditure	-	(983,069)	-	-
Foreign exchange movements	(127,028)	(733,215)	-	-
Write off discontinued projects	(133,783)	(157,663)	(133,783)	(157,663)
Carrying amount at end of year	13,159,249	12,026,008	-	-

In March 2007, Mineral Commodities Limited’s (“MRC’s”) majority owned South African subsidiary Transworld Energy and Minerals Resources SA Pty Ltd (“TEM”) lodged the Mining Right Application for the Xolobeni Project with the Department of Minerals and Energy (“DME”).

On 4 August 2008 MRC announced that it had received notification from the DME that the Mining Right for the Kwanyana block within the Xolobeni Project area would be granted. The remaining blocks (Sikombe, Mnyameni and Mpahlane) would then be held under a Prospecting Right valid to 2010 which could be extended until applications are made to convert each block into a Mining Right.

The Kwanyana block represents approximately 30% of the mining area and contains around 46% of the total insitu ilmenite resource.

However, in September 2008, the Company was advised that, on behalf of the AmaDiba Crisis Committee (“ACC”) and its members, the Grahamstown office of the Legal Resources Centre filed a Notice of Appeal (“the Appeal”) with the Minister of the DME. The ACC requested the Minister to suspend and then appeal the decision to grant the Mining Right.

MRC believes that due to the importance of the Xolobeni Project to the area, the Minister will continue to support the issuing of the Xolobeni Mining Right. The Company has therefore taken steps to minimise expenditure on the project pending a resolution of the Appeal.

• 32 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

12. EXPLORATION AND DEVELOPMENT EXPENDITURE (Continued)

Recoupment of carried forward exploration and evaluation expenditure is dependent upon the granting of mining rights and successful development and commercial exploitation of each area of interest, or otherwise by their sale at an amount not less than the carrying value.

The impairment loss of $983,069 in 2008 was brought to account in respect of the exploration assets contained within the Company’s Sierra Leone project. The impairment value was calculated to write off all the carrying value.

13(a) INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investment in companies accounted for using the equity method At the beginning of the year Equity accounting adjustments Reclassify to fair value investment	Consolidated 2009 2008 $ $ - 3,298,437 - - - (3,298,437)
	- -

13 (b) SUBSIDIARIES

Unquoted investments - at cost Shares in controlled entities Subsidiaries Class of Share Parent Entity Mineral Commodities Limited Controlled Entities Rexelle Pty Ltd Ord Queensland Minex NL Ord Q Smelt Pty Ltd Ord Mincom Waste Pty Ltd Ord MRC Resources (Pty) Ltd Ord MRC Africa Pty Ltd Ord Kariba Kono (S.L.) Ltd (refer note 1b) Ord Blackhawk Oil & Gas Ltd Ord Less Impairment	Consolidated 2009 2008 $ $ - -	Company 2009 2008 $ $ 1,451,001 1,451,001
	- -	1,451,001 1,451,001
	Place of Incorporation Equity Holding 2009 2008 % % Australia Australia 100 100 Australia 100 100 Australia 90 90 Australia 100 100 South Africa 100 100 Australia 100 100 Sierra Leone 100 100 Australia 100 100	Cost to Company 2009 2008 $ $ 1,450,001 1,450,001 4,718,302 4,718,302 - - - - - - 1,000 1,000 - - 100,000 100,000
		6,269,303 6,269,303 (4,818,302) (4,818,302)
		1,451,001 1,451,001

• 33 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

13 (b) SUBSIDIARIES (Continued)

Subsidiaries of MRC Resources (Pty) Ltd

		Place of
		Incorporation	Equity	Holding	Cost to	Company
			2009	2008	2009	2008
			%	%	$	$
Transworld Energy & Minerals Resources (SA) (Pty) Limited !	Ord	South Africa	56	56	2,500,000	2,500,000
Mineral Sands Resources (Pty) Ltd "	Ord	South Africa	50	50	-	-
Nyati Titanium Eastern Cape (Pty) Ltd	Ord	South Africa	100	100	-	-
MRC Metals (Pty) Ltd	Ord	South Africa	100	100	-	-
Skeleton Coast Resources (Pty) Ltd	Ord	Namibia	100	100	-	-

! In 2008 MRC Resources (Pty) Ltd shareholding reduced by 19% following the transfer to the Black Economic Enterprise partner.

" In 2008 MRC Resources (Pty) Ltd shareholding reduced by 50% following the transfer to the Black Economic Enterprise partner

14. NON-CONTROLLING INTERESTS

Non-controlling interests in subsidiaries comprise: Interest in retained earnings at the beginning of the financial year after adjusting for outside equity interests in the entities acquired during the financial year Operating loss Share capital Reserves Total minority interests	Consolidated Entity 2009 2008 $ $ - - - - 54,748 54,710 124,101 79,630
	178,849 134,340

During 2008 two subsidiaries’ ownership interests were restructured to comply with South African legislation. Ordinary shares were issued to the Black Empowerment Parties to effect these changes in accordance with the respective agreements entered into with the Black Empowerment partners.

• 34 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

15. TRADE AND OTHER RECEIVABLES – NON-CURRENT

Opening Balance Loans and advances - controlled entities Interest on Loans Less movement in impairment Total Trade and other receivables	Consolidated Entity Parent Entity 2009 2008 2009 2008 - - 11,841,568 9,917,134 - - 2,203,374 2,955,487 - - 553,453 415,225
	- - (358,373) (1,446,278)
	- - 14,240,022 11,841,568

Recovery of the loans to controlled entities is dependent upon the commercial exploitation of mining tenements held by the controlled entities.

(a) Impaired receivables and receivables past due

As at 31 December 2009 non current loans and advances with a nominal value of $1,804,651 (2008: $1,446,278) were impaired.

This related to the following loans:

(i) $1,773,619 (2008:1,415,246) advanced to Kariba Kono (SL) Ltd. It is expected that the sale of the assets of this entity will not generate sufficient funds in order for this receivable to be repaid.

(ii) $31,033 (2008: $31,033) advanced to Blackhawk Oil & Gas Ltd and Queensland Minex NL were also considered to be impaired.

.

(b) Risk Exposure

Information about the Group’s and the parent entity’s exposure to credit risk, foreign exchange and interest rate risk is provided in Note 24.

16. TRADE AND OTHER PAYABLES - CURRENT

Trade payables - unsecured Other payables and accruals - unsecured	Consolidated Company 2009 2008 2009 2008 $ $ $ $ 67,488 704,742 42,461 129,170 184,211 336,314 138,187 273,204
	251,699 1,041,056 180,648 402,374

(a) Fair Values and credit risk

Due to the short term nature of these payables the carrying values represent their respective fair values as at 31 December 2009 and 2008.

(b) Foreign Exchange and Interest Rate Risk

Information about the Group’s and the parent entity’s exposure to foreign exchange and interest rate Risk in relation to trade and other payables is provided in Note 24 .

• 35 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

17. CONTRIBUTED EQUITY

Balance at beginning of financial year Consideration for shares in Africa Uranium Ltd Costs of capital raising Balance at end of financial year	2009 Number of shares 2008 Number of shares 2009 $ 2008 $ 141,393,385 122,993,385 39,804,350 39,436,350 2,000,000 18,400,000 200,000 368,000 - - - -
	143,393,385 141,393,385 40,004,350 39,804,350

• In June 2009 the Company issued 2 million shares as part consideration to acquire a 10% interest in Africa Uranium Ltd

(a)

Ordinary Shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

(b) Capital risk management

The Group’s and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may issue new shares or sell assets in order to maintain sufficient funds necessary to continue its operations.

As a junior mineral explorer debt financing is not an option until such time at the Company’s projects have reached a stage at which debt financing can be obtained, therefore the company considers its contributed equity as it’s capital during this period. Investments such as the shareholding in Allied Gold Ltd are also regarded as part of the capital base and sold as required to fund ongoing operations.

18. RESERVES

General Reserve Financial asset revaluation reserve Listed options reserve Share based payments reserve Foreign currency translation reserve	Consolidated Company 2009 2008 2009 2008 $ $ $ $ 2,437,582 2,551,100 - - 1,706,929 2,872,076 1,706,929 2,872,076 286,578 - 286,578 - - 78,500 - 78,500 (758,112) (584,211) (240,392) (212,276)
	3,672,977 4,917,465 1,753,115 2,738,300

• 36 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

18. RESERVES (Continued)

Nature and purpose of reserves

General Reserve

The General Reserve arose from the issue of shares in MRC Resources Pty Ltd to an entity outside the economic entity.

Financial asset revaluation reserve

The financial asset revaluation reserve arises from the revaluation at balance sheet date of available for sale financial assets.

Foreign Currency Translation reserve

The foreign currency translation reserve records the unrealised foreign currency differences arising from the translation of operations into the presentation currency of the group. Refer to accounting policy Note 1 (e).

Share Based Payments Reserve

The share based payments reserve was used to recognise the fair value of options issued to employees but not exercised and the fair value of shares issued to employees. These options were not been exercised by the expiry date of 30 September 2009 and have thus lapsed.

Listed Options Reserve

Proceeds form the issue of 57,357,208 listed options pursuant to an entitlement issue.

19. LOSS PER SHARE

PER SHARE
	Consolidated
	2009		2008
(a) Basic loss per share	cents		cents
From continuing operations attributable to the ordinary shareholders of the company (cents per share)	0.005		0.040
From discontinued operations (cents per share)	0.445		0.82
Total basic loss per share attributable to the ordinary equity holders of the company (cents per share)	.045		1.2
Weighted average number of ordinary shares outstanding during the year used in calculation of basic loss per share	142,434,481	124,098,533
Loss used in the calculation of basic loss per share from continued operations	(7,522)	(494,478)
Loss used in the calculation of basic loss per share from discontinued operations	(635,469)	(1,021,183)

There are 57,357,208 options with an exercise price of 20 cents and an expiry date of 31 December 2012 on issue as at 31 December 2009. These potential ordinary shares are not considered dilutive and accordingly have not been used to calculate dilutive earnings per share.

20.

AUDITORS’ REMUNERATION

During the year, the following fees were paid or payable for services provided by the auditor of the parent entity and nonrelated audit firms:

Amounts received or due and receivable by auditors for: Auditors of the parent entity Audit and review Non-related practice of the auditors Audit of subsidiaries	Consolidated Company 2009 2008 2009 2008 $ $ $ $ 48,752 70,421 48,752 70,421 6,364 5,832 - -
	55,116 76,253 48,752 70,421

• 37 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

21. KEY MANAGEMENT PERSONNEL DISCLOSURES

Key Management Personnel Compensation

Key Management Personnel Short-term employee benefits Post-employment benefits	Economic Entity Parent Entity 2009 2008 2009 2008 $ $ $ $ 352,237 232,237 352,237 232,237 3,963 3,963 3,963 3,963
	356,200 236,200 356,200 236,200

(c) Option holdings of key management personnel

The numbers of options over ordinary shares in the company held during the financial year by each director of Mineral Commodities Limited and other key management personnel of the Consolidated entity are set out below:

2009
Key Management Personnel	Balance at 1 January '09	Granted as Remuneration	Options Exercised	Options Lapsed	Net change other	Balance at 31 Dec '09	Vested and exercisable
Mark Caruso	-	-	-	-	7,380,396	7,380,396	7,380,396
Joseph Caruso	-	-	-	-	7,380,396	7,380,396	7,380,396
Greg Steemson	-	-	-	-	604,000	604,000	604,000
Peter Torre	250,000	-	-	(250,000)	-	-	-
2008
Key Management Personnel	Balance at 1 January '08	Granted as Remuneration	Options Exercised	Options Lapsed		Balance at 31 Dec '08	Vested and Exercisable
Mark Caruso	-	-	-	-		-	-
Joseph Caruso	-	-	-	-		-	-
Greg Steemson	-	-	-	-		-	-
Peter Torre	250,000	-	-	-		250,000	250,000

The net change other above was the take up of the entitlement issued undertaken by the Company during the period.

• 38 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

21. KEY MANAGEMENT PERSONNEL DISCLOSURES (Continued)

(d) Shareholdings of key management personnel

The numbers of ordinary shares in the company held during the financial year by each director of Mineral Commodities Limited and other key management personnel of the Consolidated entity are set out below:

2009
	Balance at	Received as	Options				Balance
Director	1 January ‘09	Remuneration	Exercised			Net change other	31 Dec ‘09
Mark Caruso	18,463,615	-			-	600,000	19,063,615
Joseph Caruso	18,450,988	-			-	600,000	19,050,988
Greg Steemson	1,510,000	-			-	-	1,510,000
Peter Torre	-	-			-	-		-
2008
	Balance at	Received as	Options				Balance
Director	1 January ‘08	Remuneration	Exercised			Net change other	31 Dec ‘08
Mark Caruso	11,569,353	-		-		6,894,262	18,463,615
Joseph Caruso	11,556,726	-		-		6,894,262	18,450,988
Greg Steemson	210,000	-		-		1,300,00	1,510,000
Peter Torre	-	-		-		-	-

Joseph and Mark Caruso are both directors of Zurich Bay Holdings Pty Ltd which has a relevant interest in 19,050,988 shares. The net change other above was the take up of the entitlement issued undertaken by the Company during the period.

All equity transactions with key management personnel, other than those arising from the exercise of remuneration options, have been entered into under terms and conditions no more favourable that those the Group would have adopted if dealing at arm’s length.

(e) Loans to key management personnel

There were no loans to key management personnel during the period.

(f) Other transactions and balances with key management personnel

There were no transactions or balances with key personnel except as disclosed in this note and Note 23.

22. RELATED PARTY TRANSACTIONS

There were no transactions with directors or director related entities during the financial period other than the payment of directors’ remuneration as is disclosed on note 21 and the payment of $642 for secretarial services provided by Minesite Constructions Ltd an entity in which Mr Joseph Caruso and Mr Mark Caruso are Directors and have a relevant interest in the Company.

Mineral Commodities Ltd is a shareholder in Allied Gold Ltd owning 10,534,379 shares or 1.02% of the issued share capital at balance date. Mark Caruso and Greg Steemson are also directors of Allied Gold Limited.

Wholly owned group

The group consists of Mineral Commodities Limited and its subsidiaries. Details of entities in the group are set out in Note 13.

Transactions between Mineral Commodities Limited and other entities in the group during the years ended 31 December 2009 and 31 December 2008 consisted of loans advanced and payments received and made on inter company accounts. These transactions were made on normal commercial terms and conditions and at market rates.

• 39 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

22. RELATED PARTY TRANSACTIONS (Continued)

During the financial year, the Company provided management, accounting and administration services to other entities in the wholly-owned group.

An impairment loss was booked on the receivable from Kariba Kono in 2009 and the loans from Kariba Kono and Blackhawk Oil & Gas Ltd in 2008, refer to Note 15 (a) for more information. All other inter company receivables are expected to be receivable in full.

Key management personnel

Disclosures relating to key management personnel are set out in Note 21.

23(a) RECONCILIATION OF LOSS FOR THE YEAR TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES

Profit/(loss) after income tax and outside equity interest Depreciation Non bank interest income not in cash Impairment losses Management fees not received in cash Provision for Employee Entitlements (Profit)/loss on sale of investment in listed companies Exploration expenditure written off Exploration expenditure capitalised Other non-cash items Changes in assets and liabilities during the year: Increase (decrease) in trade payables and other liabilities (Increase) decrease in trade and other receivables (Increase) decrease in prepayments Net cash inflow / (outflow) from operating activities

Consolidated Company 2009 2008 2009 2008 $ $ $ $ (642,991) (1,515,661) 91,707 (736,691) 14,356 105,225 12,226 60,899 - - (553,453) (430,049) 195,491 2,087,836 554,862 2,550,252 - (45,000) (100,641) (140,685) 4,359 (60,336) 4,359 (60,336) (944,402) (471,562) (944,402) (471,562) 133,783 157,663 133,763 157,663 (1,394,052) (2,505,464) (133,763) (157,663) (46,828) 93,520 28,119 60,852 (789,357) 778,017 (226,346) 308,013 1,702,916 (1,740,988) 2,064,335 (1,800,877) (206) 3,578 (206) 3,578

(1,766,931) (3,113,172) 930,560 (656,606)

23(b) Non-cash Investing and Financing Activities

The group has no available finance facilities as at balance date.

• 40 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

24. FINANCIAL RISK MANAGEMENT

The Group and the Parent entity hold the following financial instruments:

Financial Assets Cash and cash equivalents Trade and other receivables Available for sale investments Non current - inter company loans Financial Liabilities Trade Creditors Other payables	Consolidated Company 2009 2008 2009 2008 $ $ $ $ 153,566 797,328 151,739 256,698 539,400 2,242,279 28,524 2,088,241 4,682,136 6,957,094 4,682,136 6,957,094 - - 14,240,022 11,841,568
	5,375,102 9,996,701 19,102,421 21,143,601
	67,488 704,742 42,461 129,170 184,211 336,314 138,187 273,204
	251,699 1,041,056 180,648 402,374
	5,123,403 8,955,645 18,921,773 20,741,227

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the group. Risk management is carried out by the Board of Directors.

The Group does not hold any derivative financial instruments.

Financial Risk

The main risk the group is exposed to through its financial instruments are exchange rate risk, interest rate risk, liquidity risk, credit risk and price risk.

Foreign exchange risk

The Parent entity operates internationally and is exposed to foreign exchange risk arising from various currency exposures. The parent entity is primarily exposed with respect to the South African Rand arising from the investments in and loans to its South African subsidiaries.

Foreign exchange risk arises from assets and liabilities denominated in a currency that is not the Parent company’s functional currency and net investments in foreign operations.

The Group and the parent entity currently hold no derivatives or foreign exchange contracts to hedge their foreign exchange risk exposure.

Based on the financial instruments held by the parent as at the reporting date, the sensitivity of parent entities profits after tax for the year and equity at the reporting date to movements in the Australian Dollar to South African Rand was:

• Had the Australian Dollar weakened / strengthened by 5% against the South African Rand with all other variables remaining constant, the parent entities profit after tax would have been $678,702 lower / higher (2008: $558,779 lower / higher). The reasonable possible change is based on historical changes in rates estimated by management.

• 41 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

24. FINANCIAL RISK MANAGEMENT (Continued)

Credit Risk

Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents and deposits with banks, as well as credit exposures including outstanding receivables and investments in unlisted entities.

All cash balances held at banks are held at internationally recognised institutions. The majority of receivables held are with related parties and within the Group. Given this, the credit quality of financial assets that are neither past due or impaired can be assessed by reference to historical information about default rates.

The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses, represents the economic entity’s maximum exposure to credit risk without taking account of the value of any collateral or other security obtained.

Interest Rate Risk

The Company’s exposure to interest rate risk relates primarily to the Company’s floating interest rate cash balance which is subject to movements in interest rates. The Board monitors its cash balance on an ongoing basis and liaises with its financiers regularly to mitigate cash flow interest rate risk. Interest is charged on the loans from the parent company to the South African subsidiaries at rates permitted by the South African reserve bank. This interest is eliminated on consolidation.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash to meet commitments as and when they fall due. The Board monitors rolling cash flow forecasts to manage liquidity risk. The only financial liabilities of the Group at balance date are trade and other payables, these amounts are unsecured.

As at reporting date the Group had sufficient cash reserves to meet its requirements. Should additional cash be required to fund operations this may be raised from the sale of listed equities held as available for sale. The Group therefore had no other credit standby facilities or arrangements for further funding in place.

The only financial liabilities the Group had at reporting date were trade payables incurred in the normal course of the business. These were non interest bearing and were due within the normal 30 day terms of creditor payments.

Price Risk

The parent company has an exposure to equity securities price risk. This arises from investments held by the company and classified on the statement of financial position as available for sale financial assets. Neither the group nor the parent entity are exposed to commodity price risk.

The following table summarises the impact of any increases/decreases in the market price of available for sale equity investments. The percentage used is based on possible volatility of the share price of listed investments. The percentage used is based on possible volatility of the share price and market value of the investments held. The 30% reasonable movement is based on managements estimate of historical changes.

2009 Available for sale investments Listed Shares & Options Unlisted shares	Price Risk -30% +30% Carrying amount $ Profit $ Equity $ Profit $ Equity $ 3,477,483 - (1,043,245) - 1,043,245 1,204,651 - (361,395) - 361,395
	4,682,134 (1,404,490) 1,404,490

• 42 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

24. FINANCIAL RISK MANAGEMENT (Continued)

2008 Available for sale investments Listed shares Unlisted shares	Price Risk -20% +20% Carrying amount $ Profit $ Equity $ Profit $ Equity $ 6,580,870 - (1,316,174) - 1,316,174 376,224 - (75,245) - 75,245
	6,957,094 - (1,391,419) - 1,391,419

25. SHARE BASED PAYMENTS

(a) Employee Option Plan

The establishment of the Mineral Commodities Employee Incentive Option Scheme was approved by shareholders at the 2006 annual general meeting. The incentive scheme was designed to provide long term incentives for senior staff to deliver long term shareholder returns. Under the plan, participants are granted options which vested immediately but were not exercisable until 30 September 2009. Participation in the plan was at the Boards discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits. At the expiry date none of the options were exercised and consequently lapsed.

Options granted under the plan carry no dividend or voting rights.

When exercisable, each option was convertible into one ordinary share within 10 business days.

Set out below are summaries of options granted under the plan:

Consolidated and parent entity – 2009

Grant date Expiry date Exercise price 16-Nov-07 30-Sep-09 $0.30 23-Nov-07 30-Sep-09 $0.30 23-Nov-07 30-Sep-09 $0.40 Weighted average exercise price	Balance at start of the year Granted during the year Exercised during the year Forfeited during the year Balance at end of the year Vested and exercisable at end of the year 1,250,000 - - 1,250,000 - - 500,000 - - 500,000 - - 500,000 - - 500,000 - -
	2,250,000 - - 2,250,000 - -
	$0.322

The weighted average remaining contractual life of share options outstanding at the end of the period was nil (2008:0.75 years)

• 43 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

25. SHARE BASED PAYMENTS (Continued)

Consolidated and parent entity – 2008

Grant date Expiry date Exercise price 16-Nov-07 30-Sep-09 $0.30 23-Nov-07 30-Sep-09 $0.30 23-Nov-07 30-Sep-09 $0.40 Weighted average exercise price	Balance at start of the year Granted during the year Exercised during the year Forfeited during the year Balance at end of the year Vested and exercisable at end of the year 1,250,000 - - - 1,250,000 1,250,000 500,000 - - - 500,000 500,000 500,000 - - - 500,000 500,000
	2,250,000 - - - 2,250,000 2,250,000
	$0.322 - $0.322 $0.322

No options expired during the periods covered by the above table.

26 . COMMITMENTS

(a) Non- Cancellable Operating Leases

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

Within one year Later than one year but not later than five years Total	Consolidated Company 2009 2008 2009 2008 $ $ $ $ 76,444 78,297 76,444 78,297 9,572 79,000 9,572 79,000
	86,016 157,297 86,016 157,297

The operating lease is a rental agreement for the Company’s office premises in Welshpool. The lease is for a 3 year term expiring on 15 February 2011. The lease provides for annual rent reviews to the higher of CPI or market.

(b) Exploration Tenement Leases – Commitments for Expenditure.

In order to maintain current rights of tenure to exploration tenements, the Company and consolidated entity is required to outlay lease rentals and to meet the minimum expenditure requirements which are not considered to be material.

27 CONTINGENT LIABILITIES

There are no Contingent Liabilities.

• 44 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Notes to the Financial Statements (continued)

28. SUBSEQUENT EVENTS

No event or transaction has arisen in the interval between the end of the financial year and the date of this report of a material and unusual nature that is likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Company or the Consolidated Entity, the results of those operations or the state of affairs of the Company or the Consolidated Entity in future financial years.

• 45 -

Mineral Commodities Limited Annual Financial Statements for the year ended 31 December 2009

Directors’ Declaration

The Directors of the Company declare that:

1. The financial statements, comprising the statement of comprehensive income, statement of financial position, statement of cash flow, statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001 including;

2. (a) complying with Australian Accounting Standards, Corporations Regulations 2001; and other mandatory professional reporting requirements, and

3. (b) give a true and fair view of the company’s and consolidated entity’s financial position as at 31 December 2009 and of the performance for the year ended on that date.

4. In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

5. The remuneration disclosures set out on pages 7 to 9 of the Directors Report comply with S300A of the Corporations Act 2001.

The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of the Directors:

==> picture [139 x 40] intentionally omitted <==

Greg Steemson Managing Director

Dated at Perth, Western Australia this 31[st] day of March 2010

• 46 -

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