MINERAL COMMODITIES LTD

Mineral Commodities Ltd ACN: 008 478 653

APPENDIX 4E: PRELIMINARY FINAL REPORT

2016

MINERAL COMMODITIES LTD A.C.N. 008 478 653

APPENDIX 4E PRELIMINARY FINAL REPORT 31 DECEMBER 2016

RESULTS FOR ANNOUNCEMENT TO THE MARKET

This Preliminary Final Report is provided to the Australian Securities Exchange (ASX) under ASX Listing Rule 4.3A

Current Reporting Period: 31 December 2016 Previous Corresponding Period: 31 December 2015

For and on behalf of the Directors

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PETER TORRE COMPANY SECRETARY

Dated: 28 February 2017

RESULTS FOR ANNOUNCEMENT TO THE MARKET

RESULTS FOR ANNOUNCEMENT TO THE M	ARKET
Revenue and Net Profit				USD
				$’000’s
Revenue from ordinary activities	down	42%	to	27,118
Profit from ordinary activities after tax
attributable to members	down	64%	to	3,778
Net profit for the period attributable to
members	up	64%	to	3,778

COMMENTARY ON RESULTS AND OTHER SIGNIFICANT INFORMATION

COMMENTARY

The Directors’ Report accompanying this Preliminary Final Report contains a review of operations and commentary on the results for the year ended 31 December 2016.

MINERAL COMMODITIES LTD A.C.N. 008 478 653

APPENDIX 4E PRELIMINARY FINAL REPORT 31 DECEMBER 2016

Dividends

During the year, a final ordinary unfranked dividend for the financial year ended 31 December 2015 of 1 Australian cent per ordinary share was paid on 15 April 2016, representing a total distribution of A$4,049,416.

The directors are currently deliberating the declaration of a dividend for the financial year ended 31 December 2016 and as such, a dividend has not been declared as at the date of this report. Deliberations are expected to conclude within the next month.

NET TANGIBLE ASSET BACKING

NETTANGIBLEASSETBACKING

	31 Dec 2016 US$’000	31 Dec 2015 US$’000
Net assets	36,121	31,676

Lessintangible assets	-	-

Net tangible assets ofthe Company	36,121	31,676

Fully paid ordinary shares on issue at balance date	404,941,571	404,941,571

Net tangible asset backing per issued ordinary share	0.09	0.08
as at balance date
EARNINGSPERSHARE
Basic earnings per share (US cents)	0.93	2.61

Diluted earnings pershare (US cents)	0.93	2.57

AUDIT DETAILS

The accompanying financial report has been audited.

ABN 39 008 478 653

Financial Report

31 December 2016

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Corporate directory ....................................................................................................................................................................................... 2 Directors’ report ............................................................................................................................................................................................ 3 Auditor’s independence declaration ........................................................................................................................................................... 21 Financial statements .................................................................................................................................................................................. 22

The consolidated financial statements are presented in United States Dollars (“$”), unless otherwise stated, which is the Company’s presentation currency.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Corporate directory

Corporate directory
Directors	Mark Victor Caruso	Executive Chairman and Chief Executive Officer
	Joseph Anthony Caruso	Non-Executive Director
	Peter Patrick Torre	Non-Executive Director and Company Secretary
	Guy Redvers Walker	Senior Independent Non-Executive Director
	Colin Ross Hastings	Independent Non-Executive Director
Principal registered office in Australia	40 Murray Road North
	Welshpool WA 6106
	Telephone: +61 (8) 6253 1100
	Facsimile: +61 (8) 9258 3601
	Email: [email protected]
Auditors	BDO Audit (WA) Pty Ltd
	38 Station Street
	Subiaco WA 6008
Solicitors	Dominion Legal Pty Ltd	ENSafrica
	104 Edward Street	150 West Street
	Perth WA 6000	Sandown Sandton
		Johannesburg 2196
		South Africa
	Steinepreis Paganin
	Level 4, Next Building
	16 Milligan Street
	Perth WA 6000
Bankers	National Australia Bank
	Suite 7, 51 Kewdale Road
	Welshpool WA 6106
Share registry	Link Market Services Limited
	Level 4, Central Park
	152 St Georges Terrace
	Perth WA 6000
Stock exchange listing	The Company’s shares are listed on the Australian Securities Exchange (ASX)
	under ASX Code MRC
Website address	www.mineralcommodities.com

Competent Person Statement

The information, if any, in this report which relates to exploration results, mineral resources or ore reserves for Xolobeni Mineral Sands Project is based on information compiled by Mr Allen Maynard, who is a Member of the Australian Institute of Geosciences (“AIG”), a corporate member of the Australasian Institute of Mining & Metallurgy (“AusIMM”) and independent consultant to Mineral Commodities Ltd. Mr Maynard is the director and principal geologist of Al Maynard & Associates Pty Ltd and has over 36 years’ of exploration and mining experience in a variety of mineral deposit styles. Mr Maynard has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for reporting of Exploration Results, Exploration Targets, Mineral Resources and Ore Reserves” (JORC Code). This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. Mr Maynard consents to inclusion in the report of the matters based on this information in the form and context in which it appears.

The information, if any, in this report which relates to exploration results, mineral resources or ore reserves for Tormin Mineral Sands Project is based on information compiled by Mr Adriaan du Toit, who is a Member of the AusIMM and an independent consultant to Mineral Commodities Ltd. Mr du Toit is the director and principal geologist of AEMCO PTY LTD and has over 24 years’ of exploration and mining experience in a variety of mineral deposits and styles. Mr du Toit has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the JORC Code. The information from Mr du Toit was prepared under the JORC Code 2012 Edition. Mr du Toit consents to inclusion in the report of the matters based on this information in the form and context in which it appears.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report

Your Directors present their report on the consolidated entity (referred to hereafter as the “Group”) consisting of Mineral Commodities Ltd (the “Company”) and the entities it controlled at the end of, or during, the year ended 31 December 2016. The consolidated financial statements are presented in United States Dollars (“$”), unless otherwise stated, which is the Company’s presentation currency.

Directors

The following persons were Directors of the Company during the whole of the financial year and up to the date of this report:

Mark Victor Caruso Joseph Anthony Caruso Peter Patrick Torre Guy Redvers Walker Colin Ross Hastings

Principal activities

The principal activities of the Group during the year were mineral sands mining and processing at the Group’s Tormin Mineral Sands Project (“Tormin” or the “Tormin Project”) in the Western Cape Province of South Africa, undertaking procedures and evaluation for the future development of the Xolobeni Mineral Sands Project (“Xolobeni” or the “Xolobeni Project”) in the Eastern Cape Province of South Africa, and investigations into other mineral resources.

Dividends

During the year ended 31 December 2016, the Directors declared a final unfranked dividend for the year ended 31 December 2015 of 1 Australian cent per ordinary share, for a total distribution of A$4,049,416 based on the number of ordinary shares on issue as at 31 December 2015. As the dividend is unfranked, there are income tax consequences for the owners of the Company relating to this dividend.

Review of operations

The operations and financial position of the Group and its business strategies is set out below.

The following key production and sales metrics were achieved by the Tormin Project in 2016.

Production – Full Year
*Mining*_:_1,807,750 tonnes mined at a grade of 45.96% Heavy Mineral Concentrate (“HMC”) consisting of:
• 29.21% Garnet;
• 12.97% Ilmenite;
• 2.78% Zircon;
• 0.62% Rutile; and
• 0.38% Leucoxene
*Production and Processing*_:_658,857 tonnes, including 49,581 tonnes of high zircon content Ilmenite concentrate refeed and
16,109 tonnes of Garnet concentrate refeed, processed through the Garnet Stripping Plant / Secondary Concentrator Plant
(“GSP/SCP”) to produce:
• 270,802 tonnes Garnet concentrate;
• 211,704 tonnes Ilmenite concentrate; and
• 35,813 tonnesZircon/Rutile concentrate.
Sales – Full Year:$26.9m
*Zircon/Rutile concentrate*: 38,408 wet metric tonnes
*Ilmenite concentrate*: 4,070 wet metric tonnes
*Garnet concentrate*: 130,308wetmetric tonnes
Corporate and Cash
*Cash*_:_Cash balance of $2.9 million as at 31 December 2016, plus $8.0 million in trade and other receivables.
*Debt*: $1.1 million of shareholder loans repaid immediately subsequent to year end;
$4.5 million debt facility obtained from GMA Garnet Group (“GMA”) to finance the Garnet Stripping Plant (“GSP”) fully drawn
down; and
US$1.1 million overdraft facility unutilised as at 31 December 2016. The facility limit was reduced to US$0.5 million subsequent to
yearend.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Review of operations (continued)

Safety and environment

During the year, the Company celebrated 1.5 million lost time injury (“LTI”) free hours. By the end of the 2016 year, the Company had worked in excess of 1.7 million man hours without any LTI being incurred since operations commenced in October 2013.

The Company’s safety record continues to be industry best standard.

The Company operates its Tormin mining operation under the South African Government’s One Environmental System, which came into effect on 8 December 2014. This legislation provides that the competent authority for all matters relating to environmental authorisations and compliance of the National Environmental Management Act, 1998 (‘NEMA”) is the Department of Mineral Resources (”DMR”).

Despite the legislative and vested authority resting with the DMR and ongoing compliance inspections by the DMR and the Department of Water Affairs (“DWA”), the Company received an unsolicited inspection by the Department of Environmental Affairs (“DEA”) ïn September 2016.

The Company sought legal advice and commenced proceedings to seek a declaratory order from the Court confirming the DMR as the competent authority, and to overturn the issuance of the search and seizure warrant and its validity. The matter is being heard in the High Court of South Africa (Cape Town).

The Company completed its annual independent Environmental Authorisation Compliance Audit. Tormin achieved 92% in compliance with the relevant conditions contained in the two Environmental Authorisations and their associated Environmental Management Programmes, with only two minor instances of non-compliance, and in relation to its Environmental Mitigation Compliance the Company scored in excess of 91%.

The Company has enjoyed an unblemished, fully compliant environmental record in relation to its regulatory compliance since its Tormin mining operation commenced in 2013, and continues to manage its operations environmentally responsibly and aligned with industry best practise.

Community

The Company worked closely with its joint shareholder in its South African subsidiary Mineral Sands Resources (Pty) Ltd (“MSR”) and Black Economic Empowerment (“BEE”) partner, Blue Bantry Investments 255 (Pty) Ltd (“Blue Bantry”), in continuing to assist in bridging the cultural divide that can sometimes exist in managing the expectations of interests and effected parties and communities.

The Company continues its commitment to community investment and BEE ownership and participation. During the year the Company has spent in excess of Rand 7 million on Social Labour Plan initiatives, including approximately Rand 5 million on human resources development initiatives, incorporating bursaries, scholarships, traineeships, apprenticeships and adult basic education programs. In addition, Local Enterprise Development investment in community infrastructure exceeded Rand 2 million.

The Company actively continues to support social and economic upliftment and the principles of the Historically Disadvantaged South Africans (“HDSA”) by the employment of 40 local members of the Eastern Cape Xolobeni community at Tormin. The Xolobeni employees have been progressively trained in all aspects of mine development and operations. The proactive and interactive programme the Company has adopted in relation to Xolobeni has resulted in direct education, via tangible economic and social upliftment, of the benefits of mining being balanced with responsible environmental management being communicated via those employees to the local community.

The Company’s BEE preferential procurement and economic empowerment of Historically Disadvantaged South African’s expenditure in 2016 was approximately Rand 326 million.

Xolobeni Mineral Sands Project

The Company advised midway through the 2016 year that it had entered into a Memorandum of Understanding (“MOU”) for the Xolobeni Mineral Sands Project (“Xolobeni Project”) with its BEE Partner, Keysha Investments 178 Pty Ltd (“Keysha”), to divest its 56% interest in Transworld Energy and Resources (SA) Pty Ltd (“TEM”), the entity which owns the Xolobeni Project, to Keysha on terms to be agreed between the parties.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Review of operations (continued)

Xolobeni Mineral Sands Project (continued)

The Company continues to engage with Keysha, related stakeholders and relevant authorities to facilitate and finalise the sale process. The Company fully supports the ongoing development of the Xolobeni Project and its decision to divest is in no way a reflection of its commitment to its mining interests in South Africa. It is expected that this due process will take some time to finalise to ensure all stakeholders are fully appraised of the related issues.

Tormin - Mining

For the full year to 31 December 2016, 1,807,750 Run of Mine (“ROM”) ore tonnes was mined at the Tormin Project, being approximately 3.8% above budget, with an overall HMC grade of 45.96%.

The above budget performance of the mining operations continued throughout the year, dealing with the nature of mining a beach subject to tides and surf. Mining rates increased throughout the year consistent with a falling ROM Valuable Heavy Mineral (“VHM”) grade.

Towards the end of the year, the Company purchased specialised amphibious excavation equipment which will allow it to mine the seaward extremities of its current Mining Rights resource boundaries. The equipment is due to arrive on site in the first quarter of 2017, and will allow almost continuous mining in the inter-tidal high and low water zones. This equipment will also be used for resource sampling and grade control in previously inaccessible areas.

Tormin - Processing

The two Tailings Scavenger Plants (“TSPs”) and the GSP were commissioned midway through the year on scheduled time and budget, with all plants achieving above design throughput and availability shortly thereafter.

The Primary Beach Concentrators (“PBCs”) feed rate and operating hours were both above budget for the year. However, total HMC produced through the two PBC’s of 482,383 tonnes was below budget due to lower ROM feed grade and recoveries. The two TSPs produced an additional 104,653 tonnes of HMC, being 57% above budget for the year.

The Company processed 658,857 tonnes through the GSP/SCP for the year, which was slightly below budget.

During the year, the Company re-treated 49,581 tonnes of previously stockpiled Ilmenite concentrate to extract excess Zircon and to upgrade the final Ilmenite concentrate product. The Company also trialled the refeed of 16,109 tonnes of Garnet concentrate to extract excess Zircon content.

GSP/SCP plant feed grade and recoveries were below budget, resulting in lower than budget non-magnetic Zircon/Rutile concentrate production of 35,813 tonnes. The reduction in non-magnetic Zircon/Rutile concentrate production is directly related to the diminishing grade of Zircon in the ROM VHM grade.

Annual Ilmenite and Garnet concentrate production to 31 December 2016 was 211,704 tonnes and 270,802 tonnes respectively.

Tormin - Cash Costs

The following key summary of unit costs and revenue is presented:

SUMMARY OF UNIT COSTS & REVENUE PER TONNE (US$)	2016 Full Year $/t	2015 Full Year $/t
Unitproduction cash costsper tonne of final concentratesproduced	27.03	38.47
Unit cost ofgoods soldper tonne of final concentrates sold(1)	99.29	72.16
Unit revenueper tonne of final concentrates sold	163.27	111.26

Note 1:- Cost of goods sold includes production cash costs, product handling, transport and selling costs, royalties, stock movements, and depreciation and amortisation. Excludes corporate and financing costs.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Review of operations (continued)

Tormin - Cash Costs (continued)

Production cash costs per tonne of zircon/rutile, ilmenite and garnet concentrate produced for the 2016 year was $27.03/t, and an improvement on the 2015 year’s cost of $38.47/t. The decrease in unit production cash costs for the 2016 year was predominantly due to the additional final concentrates produced as a consequence of the GSP being commissioned in July 2016.

Cost of goods sold (incorporating production cash costs, product handling, transport and selling costs, royalties, stock movements, and depreciation and amortisation) per tonne of concentrate sold was $99.29/t for the 2016 year, as compared to $72.16/t for the 2015 year. The unit cost of goods sold was higher in 2016 due to the product mix sold.

Tormin - Sales and Marketing

Sales revenue for the year was $26.9m, based on the sale of the following products:

Zircon/Rutile concentrate: 38,408 wet metric tonnes
Ilmenite concentrate: 4,070 wet metric tonnes
Garnet concentrate: 130,308 wet metric tonnes

Revenue per tonne of all concentrates sold was $163.27/t for the 2016 year compared to $111.26/t for the 2015 year.

Revenue to cost of goods sold ratio for the 2016 year was 1.64, an improvement over the 2015 year’s result of 1.54.

The Company saw incremental strengthening for its non-magnetic Zircon/Rutile concentrate towards the end of the year and expects pricing to continue to strengthen during the course of 2017.

The Company also recommenced stockpile sales of Garnet concentrate during the second half of the year, delivering 130,000 tonnes of the minimum 210,000 tonners per annum (July to June) contracted under the GMA life of mine Off-take Agreement.

As at the end of the year, the Company holds a further 120,000 tonnes of stockpiled Garnet concentrate, that is in addition to that sold under bill and hold arrangements to GMA.

The Company is also starting to receive independent third-party enquiries for its non-contracted Garnet concentrate. This enquiry triggers a First Right of Refusal option under the GMA Offtake Agreement. Accordingly the Company is confident that it will realise additional sales revenue for uncommitted Garnet concentrate in the first half of 2017.

As announced immediately following year end, the Company continues its strong relationship with its existing customer base for its nonmagnetic Zircon/Rutile concentrate, with existing customers taking shipments of up to 83,000 tonnes of Ilmenite concentrate in Q1 2017.

There is an evident increasing demand for Ilmenite concentrate and finished Ilmenite products due to a combination of the tightening of the global ilmenite supply chain, increase in Titanium pigment pricing, as well as the curtailing of domestic Sulphate Ilmenite production within China and India, due to environmental and economic cost of production factors.

Since the commencement of mining operations in 2014, the Company has stockpiled approximately 200,000 tonnes of Ilmenite concentrate in anticipation of increased pricing.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Review of operations (continued)

Tormin - Resources

The annual Tormin Resource Review work was completed during February 2017, with results as follows:

Category	Resource Million tonnes	Total Heavy Mineral %	Ilmenite	Zircon	Rutile	Garnet
			(% in	(% in	(% in	(% in
			Resource)	Resource)	Resource)	Resource)
Indicated Resources – Dec 2013	2.70	49.4%	10.6%	3.4%	0.7%	25.3%
Tonnes Mined - 2014	1.07	53.83%	17.26%	4.76%	0.65%	31.16%
Indicated Resources – Dec 2014	2.70	38.14%	10.05%	2.21%	0.46%	25.22%
Tonnes Mined - 2015	1.62	49.57%	16.15%	3.88%	0.60%	28.94%
Indicated Resources – Dec 2015	2.70	28.01%	6.97%	1.56%	0.55%	18.54%
Tonnes Mined - 2016	1.81	45.97%	12.97%	2.78%	0.61%	29.21%
Indicated Resources – Dec 2016	1.80*	28.8%	6.15%	1.65%	0.53%	18.99%

*0.5% Zircon cut-off grade used

Since commencement, the Company has mined in excess of 4.5 million tonnes which represents almost 60% more than the stated original Indicated Resource. The Heavy Mineral (“HM”) grade has been higher than the original stated resource grade in every year of operation.

The reported resource audit for 2016 has shown a reduction in the resources from 2.7 million tonnes to 1.8 million tonnes. This represents for the first time a reduction in the quantity of remaining resources against the original resource.

Given the unique placer beach dynamic of the deposit, the Company is unable to determine with certainty the exact replenishment cycle in terms of quantity and grade. However, it should be noted that both grade and replenishment has consistently been evidenced by historical mining and processing information.

The Company is confident that with the grant of additional identified onshore and northern beach mining and prospecting areas currently under application, that the additional mining areas will allow the current beach mining areas to replenish.

Tormin - Prospecting Activities

The Company had intended to undertake offshore sampling of its Offshore Prospecting Right during the 2016 year. However, the work was delayed due to delays in mobilisation by the original contracted service provider, the most recent being the requirement to modify sample collection equipment and equipment failure of the contractor. It is planned that this sampling programme will take place in Q1 2017.

As advised on 30 June 2016, the application for Prospecting Rights, WC30/5/1/2/10226PR along the beach and surf zone north of its current mining operation and WC30/5/1/1/2/10229PR adjacent and inland from the current mining operations, were refused by the DMR. The Company lodged an Appeal against these decisions to the DEA in relation to the environmental authorisation aspects of the application.

The Company received formal notification in respect to the Prospecting Rights Appeal from the DEA advising that the Appeal had been upheld. The Company will consider a further Judicial Appeal process on the upholding of the Prospecting Rights by the DEA, as it believes that the decision is based on environmental concerns that are without basis.

The final decision in relation to the ultimate rejection of the Prospecting Rights applications now rests with the DMR. The Company is yet to be advised by the DMR.

In anticipation of the Appeal refusal, the Company had previously commenced, in consultation with the DMR, the preparation of an Environmental Management Program (“EMP”) 102 Amendment Application covering 28.7ha of the northern beach area and 75ha of area on the Geelwal farm that is partly covered by the Prospecting Rights.

The Company is well advanced with this EMP 102 Amendment Application and, if granted, will provide a much shorter timeline to access and mining of the applicable areas. An EMP 102 Amendment allows the applicant to expand its existing mining operations based on its current approved mining tenure.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Tormin - Prospecting Activities (continued)

As another precautionary measure, and in order to protect the tenure of the two Prospecting Rights that were refused by the DEA Appeal decision, the Company is entitled to submit new prospecting rights applications over these respective prospecting areas. These second Prospecting Rights applications (WC30/5/1/1/2/10261PR over the beaches north of Tormin and WC30/5/1/1/2/10262PR over the farm Geelwal Karoo) were lodged on 22 December 2016.

Despite the ongoing issues which the Company has experienced in securing additional prospecting tenure, the Company is confident that underlying fundamental requirements of social and economic upliftment can be managed with environmental responsibility to provide sustainable mine operations at the Tormin site.

In addition, the Company has also made a prospecting rights application for further onshore areas at Klipvley Karookop, to the north of its Geelwal Karoo farm.

The Company initiated an aerial survey of the entire Tormin beach deposit, targeted to determine resource changes over the entire mining area, volumetrically. This will allow the Company to better understand and quantify the total beach deposition tonnages, grade, and its exact location of deposition.

Corporate and Financial

At 31 December 2016, the Company had US$2.9 million in cash, with trade and other receivables of US$8.0 million.

Immediately following the year end, the Company advised that shareholder loans from two of its largest shareholders, Au Mining Ltd and Regional Management Pty Ltd, totalling approximately US$1.1 million were repaid in full.

The US$4.5 million loan facility obtained from GMA to finance the GSP was fully drawn by year end. Repayments on and interest charges against the facility will not commence until such time as GMA takes continuous shipment of its 210,000 tonnes per annum off-take commitment.

The Company’s overdraft facility limit of US$1.1 million was undrawn as at 31 December 2016. The facility limit was reduced to US$0.5 million subsequent to year end.

The Company continues to assess alternate financing arrangements albeit cognizant of the nature of the type of resources and assets held by the Company. Based on current Ilmenite and Garnet concentrate pricing, the Company has in excess of US$25 million in unrealised net cash value (revenue at current concentrate prices less expected transport, selling and royalty costs and amounts paid to date under bill and hold arrangements) in its garnet and ilmenite concentrate stockpiles. Accordingly, the Company is looking at unlocking this value by the provision of a stockpile financing facility.

Consolidated result and financial position

The profit of the Group after income tax and non-controlling interests was $3.8m (2015: $10.6m).

Revenue for the year was $27.1m (2015: $46.4m), with profit before income tax expense of $6.6m (2015: $12.9m).

The variance in reported revenue was pre-dominantly due to lower Garnet concentrate sales in the 2016 year, and lower Zircon/ Rutile concentrate production and sale prices achieved. Profitability in 2016 was impacted by the lower revenue, offset in part by operating cost saving and the Rand depreciation in the 2016 year.

The net assets of the Group have increased from $31.7m as at 31 December 2015 to $36.1m as at 31 December 2016.

Outlook

Work will continue on the Tormin on the Mineral Separation Plant (“MSP”) expansion initiative with ongoing process design test work being undertaken in the last quarter of the year as well as freshwater washing quantification testing of Ilmenite and Garnet concentrates for final product processing through the MSP.

The MSP plant site location and scope of works have been advanced and the proposed MSP plant is anticipated to be capable of processing up to 300,000 tonnes per annum of Ilmenite / Garnet concentrate to produce 150,000 tonnes of finished Ilmenite product and 100,000 tonnes of finished Garnet product per annum. Additionally, a further 5,000 to 7,000 tonnes per annum of finished Zircon product could also be produced from the processing of the Ilmenite and Garnet concentrate currently being produced.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Outlook (continued)

The current Ilmenite pricing strength supports the MSP project and will allow the Company to extract full value from its existing Ilmenite and Garnet concentrate stockpiles, which currently total some 750,000 tonnes cumulatively, in addition to future Ilmenite and Garnet concentrate production.

The Company recognises it will need to continue to work with the issues surrounding mining a replenishing beach and the uncertainties relating to replenishment quantities and grade. Mitigation management includes the adjustment of mining rates to allow sufficient time for the active beach mining areas to replenish, which may result in the scaling back of operations at various periods throughout the year and the adoption of specialised mining equipment that will allow access to the previously unmined portions of the resource which sit within the perimeter of the lower tidal boundaries and surf zone.

A strong concerted focus continues to work through the necessary permitting approvals to secure the granting of Prospecting Rights and Mining Rights which will allow access to known and potential resources and extend the mine life of the Tormin operation substantially into the future.

The Company continues to advance with other greenfield and brownfield project identification and business development opportunities.

Significant changes in the state of affairs

Details of the year’s operational performance and the resulting financial impact is set out in the review of operations above.

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 Group, the results of those operations or the state of affairs of the Company or the Group in future financial years unless otherwise disclosed in this Directors’ Report

Events since the end of the financial year

Other than disclosed in the review of operations above, there have been no other material matters arising subsequent to the end of the financial year.

Likely developments and expected results of operations

Likely developments in the operations of the Group that were not finalised at the date of this report are included in the review of operations above and as detailed in the Outlook section.

The Board will continue to review other projects and opportunities in the interests of increasing shareholder value.

Environmental regulation

The Group is subject to various environmental regulations in respect to its exploration, development and production activities.

In the course of its normal mining and exploration activities, the Group adheres to all 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 and prospecting tenements

Mining and prospecting tenements currently held or under application by the Group are:

Country	Location	Number	Type of	Status	Beneficial
			Right		Interest
South Africa	Tormin	(WC) 30/5/1/1/2/10261 PR	Prospecting	Under Application	100%
South Africa	Tormin	(WC) 30/5/1/1/2/10262 PR	Prospecting	Under Application	100%
South Africa	Tormin	(WC) 30/5/1/2/2/163 MR	Mining	Approved	100%
South Africa	Tormin	(WC) 30/5/1/1/2/10259 PR	Prospecting	Under Application	100%
South Africa	Tormin	(WC) 30/5/1/2/2/162 MR	Mining	Approved	100%

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Schedule of mining and prospecting tenements ( continued )

Country	Location	Number	Type of	Status	Beneficial
			Right		Interest
South Africa	Tormin	(WC) 30/5/1/1/2/10036 PR	Prospecting	Under Application	100%
South Africa	Tormin	(WC) 30/5/1/1/2/10199 PR	Prospecting	Under Application	100%
South Africa	Tormin	(WC) 30/5/1/1/2/10226 PR	Prospecting	To be subject to Judicial Review	100%
South Africa	Tormin	(WC) 30/5/1/1/2/10229 PR	Prospecting	To be subject to Judicial Review	100%
South Africa	Tormin	(WC) 30/5/1/1/2/10240 PR	Prospecting	Under Application	100%
South Africa	Xolobeni	(EC) 30/5/1/1/2/6 PR	Prospecting	Converting to Mining Right	100%
South Africa	Xolobeni - Kwanyana block	(EC) 30/5/1/1/2/10025 PR	Prospecting	Converting to Mining Right	100%
South Africa	Xolobeni	(EC) 30/5/1/1/2/10025 MR	Mining	Converting to Mining Right	100%

Greenhouse gas and energy data reporting requirements

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 measurement period, the Directors have assessed that there are no current reporting requirements, but may be required to do so in the future.

Information on Directors

Mark Victor Caruso	Executive Chairman and Chief Executive Officer	Age 55
*Experience and expertise*
Mr Caruso has extensive experience in mining, earthmoving and civil engineering construction earthworks. He has been a Director
of the Company since September 2000. He was previously Chairman of Allied Gold Mining PLC (AGMP), responsible for the
delivery of the Gold Ridge Project in the Solomon Islands and the Simberi Gold Project in Papua New Guinea. After resigning from
AGMP, he transitioned into the position of Executive Chairman of the Company in August 2012.
*Other current directorships*
Perpetual Resources Limited
*Former directorships in the last 3 years*
None
*Special responsibilities*
Chairman of the Board
Chief Executive Officer
*Interests in shares and options*
78,554,014 ordinary shares in the Company – indirect holding ¹
15,784 ordinary shares in the Company – direct holding
5,000,000 options over ordinary shares in the Company
Joseph Anthony Caruso	Non-Executive Director	Age 71

Experience and expertise

Mr Caruso was appointed as Non-Executive Director of the Company in September 2000. He 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. He has considerable experience in managing and administration of engineering, mining, raw materials production operations, earthmoving and related infrastructure utilities services resource contracts. Other current directorships None Former directorships in the last 3 years None Special responsibilities

Member of the Remuneration and Nomination Committee

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Information on Directors (continued)

Joseph Anthony Caruso(continued)	Non-Executive Director	Age 71
*Interests in shares and performance rights*

77,007,485 ordinary shares in the Company ¹
1,000,000 performance rights over ordinary shares in the Company
¹ J A Caruso and M V Caruso are both directors of and have a relevant interest in Zurich Bay Holdings Pty Ltd, which holds 77,007,485 shares in the Company. Mr Mark Caruso also holds shares indirectly through Regional Management Pty Ltd.

Peter Patrick Torre CA, AGIA, MAICD Non-Executive Director and Company Secretary Age 45 Experience and expertise Mr Torre was appointed Company Secretary of the Company in July 2006, and as a Director of the Company on 1 April 2010. He is a Chartered Accountant, a Chartered Secretary and a member of the Australian Institute of Company Directors. He was previously a partner of an internationally affiliated firm of Chartered Accountants. Mr Torre is the Company Secretary of several ASX listed companies.

Other current directorships

None

Former directorships in the last 3 years WestStar Industrial Ltd

Special responsibilities Company Secretary and member of the Audit, Compliance and Risk Committee Interests in shares and performance rights

625,000 ordinary shares in the Company

1,000,000 performance rights over ordinary shares in the Company

Guy Redvers WalkerBCA, CA, CFA, CMInstD	Senior Independent Non-Executive Director		Age 47
*Experience and expertise*
Mr Walker is a highly accomplished director and senior investment management executive with over 20		years’ financial markets
experience. He currently and in the past has sat on the boards of listed mining companies including exploration, development and
production companies. He has extensive experience in capital raising through both traditional banks and		alternative lenders.
*Other current directorships*
Metals Exploration plc
*Former directorships in the last 3 years*
Bacanora Minerals Ltd
ENK plc
Navigator Resources Limited
*Special responsibilities*
Senior Independent Non-Executive Director, Chairman of the Audit, Compliance and Risk Committee			and member of the
Remuneration and Nomination Committee
*Interests in shares and performance rights*
125,000 ordinary shares in the Company
1,000,000 performance rights over ordinary shares in	the Company

Colin Ross HastingsBSc (Geology), Independent Non-Executive Director Age 66
MSc (Economic Geology), MAusIMM
*Experience and expertise*
Mr Hastings was appointed as a non-executive Director in April 2015. He is a geologist with over 30 years’ experience in mining
and exploration, project generation and project development, covering Australia and overseas. He has a strong geotechnical
background with 10 years’ experience in this field and has extensive experience in mining related disciplines and processes. From
1996 to 2014, Mr Hastings was involved with Allied Gold PLC’s Simberi Gold Project where his roles included management of
exploration and the feasibility and pre-development studies for mine construction. Mr Hastings then progressed to General
Manager Resource Development and concluded his tenure at St Barbara subsequent to the merger between it and Allied Gold
Mining PLC.
*Other current directorships*
Perpetual Resources
*Former directorships in the last 3 years*
None

Special responsibilities

Chairman of the Remuneration and Nomination Committee and member of the Audit, Compliance and Risk Committee Interests in shares and performance rights

1,000,000 performance rights over ordinary shares in the Company

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Information on directors (continued)

Directors and key management personnel shareholdings

The relevant interest of each Director and key management personnel in the share capital of the Company, shown in the Register of Directors’ and Key Management Personnel Shareholding at the date of the Directors’ Report is as follows:

			Balance as at		Increase as a		Balance as at
			1 January	Received as	result of options	Net	31 December
			2016	remuneration	exercised	change	2016
Mark Caruso	•	Indirect	78,554,014	-	-	-	78,554,014
	•	Direct	15,784	-	-	-	15,784
Joseph Caruso			77,007,485	-	-	-	77,007,485
Peter Torre			625,000	-	-	-	625,000
Guy Walker			125,000	-	-	-	125,000
Ross Hastings			-	-	-	-	-
Tony Sheard			150,000	-	-	-	150,000

Meetings of directors

The number of meetings of the Company’s Board of Directors and each of the Board committees held during the year ended 31 December 2016, and the number of meetings attended by each Director were:

Name	Directors’ Meetings	Directors’ Meetings	Meetings of committees	Meetings of committees	Meetings of committees	Meetings of committees
			Audit, Compliance and Risk		Remuneration and Nomination
Number of meetings held A being total of meetings eligible to attend B being total of meetings actually attended	A	B	A	B	A	B
Mark Victor Caruso	9	8	0	0	0	0
Joseph Anthony Caruso	9	7	0	0	4	4
Peter Patrick Torre	9	9	4	4	0	0
Guy Redvers Walker	9	9	4	4	4	4
Colin Ross Hastings	9	9	4	4	4	4

Other 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.

Remuneration report (Audited)

This remuneration report sets out the remuneration information for the Company’s non-executive Directors, executive Directors, other key management personnel and the key executives of the Group and the Company. 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
F. Other transactions with key management personnel

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 key management personnel, if any, on an annual basis and makes recommendations. Remuneration packages are reviewed with due regard to performance and other relevant factors.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Remuneration report (Audited) (continued)

Remuneration packages may contain the following key elements:

(a) Directors’ fees;
(b) Salary and consultancy; and
(c) Benefits, including the provision of a motor vehicle and 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 on annual basis. The non-executive Directors fee pool was set at $500,000 on 30 May 2008 at the Annual General Meeting. Non-executive director fees are paid with an aggregate limit (currently $500,000) which is approved by the shareholders from time to time. Non-executive directors serve in accordance with a standard letter of appointment which sets out the remuneration arrangements.

Executives are offered a competitive base pay which is reviewed annually to ensure the pay is competitive with the market.

There were short term cash incentives provided to both the Executive Chairman and Chief Financial Officer (“CFO”). Long-term incentives are provided to Directors and other key management personnel to incentivise them to deliver long-term shareholder returns.

These are determined based on what the Board views as reasonable based on market conditions. Any grant of securities to Directors of the Company must be approved by shareholders in a general meeting.

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.

As at 31 December 2016, the short term cash bonus incentives are up to 25% of base pay calculated on Company performance and other key performance indicators. Directors’ fees are fixed.

	2016	2015	2014	2013	2012	2011	2010
Profit /(loss) for the year after tax (USD)	3,777,834	10,576,785	8,376,344	(1,569,980)	(1,233,344)	(2,206,055)	(1,494,207)
Closing share price (AUD)	13.0 cents	10.0 cents	11.0 cents	18.5 cents	9.9 cents	7.5 cents	8.1 cents

Voting and comments made at the Company’s 2016 Annual General Meeting

The Company received the unanimous support of shareholders present on the remuneration report at the AGM for the 2015 financial year and 99.7% of proxy votes were in favour of the resolution to approve the remuneration report. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.

B. Details of Remuneration

The key management personnel of the Group are the Directors of the Company, Mr Logan Francis, the Chief Operating Officer (“COO”), and Mr Tony Sheard, the CFO. Mr Logan Francis was appointed on 17[th] October 2016. The amounts disclosed are applicable for the Company.

Details of the remuneration of Directors and the key management personnel (as defined in AASB 124 Related Party Disclosures) of the Company are set out in the following tables. There are no long term benefits amounts due to Directors and key management personnel, other than those disclosed. Non-cash benefits in the form of performance rights were provided to directors during the year. The following fees are applicable to Directors and key management personnel of the Company.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Remuneration report (Audited) (continued)

B. Details of Remuneration (continued)

Name	Year	Cash salary (A$)	Cash bonus (A$)	Annual and long service leave (A$)	Post- employment benefits (A$)	Share-based payments (Options & Performance rights) (A$)	Totals (A$)	Percentage performance based (%)	Share based payments as a percentage of remuneration (%)
Directors
Executive Chairman
Mark Caruso	2016	581,516	120,000	19,902	18,484	76,298	816,200	14.7	9.3
	2015	547,945	150,000	43,882	52,055	149,590	943,472	15.9	15.9
Joseph Caruso	2016	63,927	-	-	6,073	22,780	92,780	-	24.6
	2015	63,934	-	-	6,066	-	70,000	-	-
Peter Torre	2016	150,000	-	-	-	22,780	172,780	-	13.2
	2015	150,000	-	-	-	-	150,000	-	-
Guy Walker	2016	80,000	-	-	-	22,780	102,780	-	22.2
	2015	80,000	-	-	-	-	80,000	-	-
Ross Hastings (appointed 2 April 2015)	2016	71,324	-	-	8,676	22,780	102,780	-	22.2
	2015	52,311	-	-	4,828	-	57,139	-	-
James Leahy (resigned 27 May 2015)	2016	-	-	-	-	-	-	-	-
	2015	32,667	-	-	-	-	32,667	-	-
Total Director Remuneration	2016	946,767	120,000	19,902	33,233	167,418	1,287,320	9.3	13.0
	2015	926,857	150,000	43,882	62,949	149,590	1,333,278	11.3	11.2
Other Key Management Personnel
Tony Sheard	2016	252,288	55,344	2,827	21,548	13,384	345,391	16.0	3.9
	2015	251,142	59,813	9,981	23,858	26,182	370,976	16.1	7.1
Logan Francis (appointed 17 October 2016)	2016	56,503	-	5,289	4,099	-	65,891	-	-
	2015	-	-	-	-	-	-	-	-
Total Key Management Personnel Remuneration	2016	1,255,558	175,344	216,743	28,018	180,802	1,856,465	10.3	10.6
	2015	1,177,999	209,813	53,863	86,807	175,772	1,704,254	12.3	10.3

Other short and long term benefits forming part of the service agreements are detailed below:

Cash bonus

The Executive Chairman was entitled to an annual bonus of 25% of the Base Remuneration, measured against the following criteria, 20% weighting for each:

Mine production against budget;
Securing and entering into an offtake agreement for Ilmenite;
Achieving Budget Earnings before Interest, Tax, Depreciation and Amortisation (“EBITDA”) taking into account uncontrollable variables at the discretion of the Board;
Completion of a strategic review of the Xolobeni Project to determine and optimise the most appropriate economic project development timeline and structure; and
Completion and commissioning of the GSP on schedule and budget.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Remuneration report (Audited) (continued)

B. Details of Remuneration (continued)

Future bonuses of the Executive Chairman will be at the sole discretion of the Board.

The measurable objectives were chosen to ensure the Executive Chairman was incentivised to meet budgeted production and EBITDA; secure offtake agreements for the Company’s remaining product not currently being sold into the markets; to complete the expansion initiatives of the Company and to undertake a strategic review of the Company’s other mineral sands project in South Africa.

The Chairman of the Remuneration and Nomination Committee assessed the performance of the Executive Chairman, and reviewed his performance against the above set measurable objectives, taking into account other mitigating factors throughout the year. The Remuneration and Nomination Committee has reviewed the assessment and awarded 80% of the full bonus of 25% of the Base Remuneration.

As the COO only commenced employment on 17 October 2016, there is no entitlement to any cash bonus for the 2016 year.

The CFO was entitled to an annual bonus of 25% of the Base Remuneration, measured against the following criteria, one third weighting for each:

Performance against scope of services set out in the employment contract at the sole discretion of the Executive Chairman;
Board Reporting within set timing each month; and
Achieving EBTIDA against budget taking into account uncontrollable variables at the discretion of the Board.

Future bonus of the CFO will be at the sole discretion of the Board.

The measurable objectives were chosen to align the two key executives incentives in terms of meeting budgeted EBITDA; to ensure the CFO performed each of the tasks outlined in his employment contract which are typical of that for a CFO position, and timely reporting to the Board to ensure business decisions can be made on a timely and informed basis.

The Executive Chairman assessed the performance of the CFO against the above measurable objectives and awarded 80.5% of the full bonus of 25% of the Base Remuneration.

Relative proportions of fixed vs variable remuneration expense

The following table shows the relative proportions of remuneration that are linked to performance and those that are fixed, based on the amounts disclosed as statutory remuneration expense in the previous table:

Name	Fixed Remuneration	Fixed Remuneration	At Risk- STI	At Risk- STI	At Risk- LTI	At Risk- LTI
	2016	2015	2016	2015	2016	2015
Directors Executive Chairman Mark Caruso Non-Executive Directors Joseph Caruso Peter Torre Guy Walker Ross Hastings Other Key Management Personnel Tony Sheard Logan Francis	76% 75% 87% 78% 78% 80% 100%	68% 100% 100% 100% 100% 71% NA	15% 0% 0% 0% 0% 16% 0%	16% 0% 0% 0% 0% 23% NA	9% 25% 13% 22% 25% 4% 0%	16% 0% 0% 0% 0% 6% NA

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Remuneration report (Audited) (continued)

C. Service Agreements

C. Service Agreements
Mark Caruso
Commencement date	6 August 2012
Term	No fixed term
Total Remuneration package	A$600,000 per annum (inclusive of statutory superannuation), effective from 12 September 2014,
	and cash bonus as set out above
Termination benefits	12 months’ base salary plus any payment in lieu of notice
Peter Torre
Commencement date	1 November 2012
Term	No fixed term
Total Remuneration package	A$150,000 per annum
Termination benefits	12 months’ base salary plus any payment in lieu of notice
Tony Sheard
Commencement date	1 January 2015
Term	No fixed term
Total Remuneration package	A$275,000 per annum (inclusive of statutory superannuation) and cash bonus as set out above
Termination benefits	Nil unless constructive redundancy in which case 12 months’ salary
Logan Francis
Commencement date	17 October 2016
Term	No fixed term
Total Remuneration package	A$290,000 per annum (inclusive of statutory superannuation) and cash bonus as set out above
Termination benefits	Nil unless constructive redundancy in which case 12 months’ salary

There are no other service agreements.

D. Share Based Compensation

Employee Options

No options were granted as remuneration during the year ended 31 December 2016. Options vested during the year is:

Mark Caruso 1,666,668 Tony Sheard 333,333

The terms and conditions of each grant of options are as follows:

Grant Date Expiry date Exercise price Fair Value at grant date	Options at the start of the year Granted during the year Exercised during the year Forfeited during the year Lapsed during the year Balance at the end of the year Vested at the end of the year
27 May 2015 30 May 2018 20 cents 4.90 cents 07 Sept 2015 31 Mar 2018 20 cents 5.40 cents Total	5,000,000 - - - - 5,000,000 3,333,334 1,000,000 - - - - 1,000,000 666,667
	6,000,000 - - - - 6,000,000 4,000,001

Details of options over ordinary shares in the Company provided as remuneration to key management personnel are shown below:

	Balance as at 1 January 2016 Received as remuneration Options exercised Options lapsed Balance as at 31 December 2016
Mark Caruso Tony Sheard Total	5,000,000 - - - 5,000,000 1,000,000 - - - 1,000,000
	6,000,000 - - - 6,000,000

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Remuneration report (Audited) (continued)

D. Share Based Compensation (continued)

Grant of Performance Rights

The issue of Performance Rights was approved by shareholders at a general meeting of the Company held on 25 May 2016. The Incentive Performance Rights Plan is designed to provide long-term incentives for senior managers and above (including directors) to deliver long-term shareholder returns. Performance Rights granted under the plan carry no dividend or voting rights. The Performance Rights is exercisable on or before 30 May 2019 and will vest upon the closing Share price reaching $0.20 and remaining at or above $0.20 for a period of 5 consecutive trading days. The Performance Rights will only vest upon the satisfaction of the market based vesting conditions stated above and has no performance based conditions.

The following performance rights were issued to the non-executive directors during the year:

	Grant Date	Expiry Date	Exercise Price (A$)	No of Performance Rights
JosephCaruso	25May2016	30May2019	20 cents	1,000,000
Peter Torre	25May2016	30May2019	20 cents	1,000,000
GuyWalker	25May2016	30May2019	20 cents	1,000,000
RossHastings	25May2016	30May2019	20 cents	1,000,000

Details of performance rights over ordinary shares in the Company provided as remuneration to key management personnel are shown below:

	Balance as at 1 January 2016 Received as remuneration Performance rights vested Performance rights expired Balance as at 31 December 2016
Joseph Caruso Peter Torre Guy Walker Ross Hastings Total	- 1,000,000 - - 1,000,000 - 1,000,000 - - 1,000,000 - 1,000,000 - - 1,000,000 - 1,000,000 - - 1,000,000
	- 4,000,000 - - 4,000,000

E. Other transactions with key management personnel

Mine Site Construction Services (“MSCS”), a company associated with Mr Mark Caruso and Mr Joseph Caruso has provided the followings services to the Company during 2016:

• Provision of office space.

The amount paid by the Company to MSCS for the year ended 31 December 2016 was $90,199 (2015: $47,734). This is considered to be an arm’s length commercial rent. There is a formal sub lease in place.

• Provision of secretarial staff to the Executive Chairman.

The amount paid by the Company to MSCS for the year ended 31 December 2016 was $76,329 (2015: $57,784). The amounts payable are pursuant to an Executive Service Agreement and have been reimbursed on an arm’s length basis at normal commercial rates.

• Provision of technical staff.

The amount paid by the Company to MSCS for the year ended 31 December 2016 was $210,413 (2015: $299,422). The amounts payable have been in respect to the provision of technical staff at the Groups’ head office and at the Tormin project and have been reimbursed on an arms-length basis at normal commercial rates.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Remuneration report (Audited) (continued)

E. Other transactions with key management personnel (continued)
Others

The amount paid by the Company to MSCS for the year ended 31 December 2016 was $127,799 (2015:$128,259). The amounts payable have been in respect of telecommunication charges and miscellaneous payments made by MSCS on behalf of the Company. The amounts have been reimbursed on an arms-length basis at normal commercial rates.

As at 31 December 2016, amount payable to MSCS is $106,049.

Ross Hastings, one of the Directors has provided consulting services to one of the Company’s projects during the year ended 31 December 2016. The amount paid by the Company to Ross Hastings for the year ended 31 December 2016 was $6,306 (2015: $nil). The amounts payable have been reimbursed on an arm’s length basis at normal commercial rates.

As announced by the Company on 30 May 2014, the Company obtained an unsecured short term working capital facility of up to $4m from major shareholders. This included a A$2 million facility provided by Regional Management Pty Ltd (“RMS”), a related party of Mr Mark Caruso, the Executive Chairman of the Company.

Pursuant to the Loan Agreement entered into between the Company and RMS, the lender provided a finance facility capped at A$2 million on the following arm’s-length and commercial terms:

Loan was unsecured;
Interest of 13% per annum;
Line fee of 1% and establishment fee of 1%;
Repayment to take in three equal tranches on 31 January 2015, 28 February 2015 and 31 March 2015 (which was subsequently extended); and
Default interest of 10% if not repaid on the repayment date.

As at 31 December 2016, the balance (including interest payable) outstanding is $583,044. Interest paid amounted to $90,804 in 2016. The loan was fully repaid on 4 January 2017.

End of the audited remuneration report

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Insurance of officers

During the financial year, the Group has paid an insurance premium to insure the Directors and secretaries of the Company and its controlled entities. The provision of details in respect to the terms and conditions of the policy are prohibited from disclosure under the terms of the policy.

Proceedings on behalf of the Group

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

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.

Details of the amounts paid or payable to the auditor for audit and non-audit services provided during the year are set out below.

The Board of Directors has considered the position and, in accordance with advice received from the Audit, Compliance and Risk Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services have been reviewed by the Audit, Compliance and Risk Committee to ensure they do not impact the impartiality and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

During the year, the following fees were paid or payable for services provided by BDO Audit (WA) Pty Ltd and BDO Tax (WA) Pty Ltd, its related practices and related firms:

Audit services Audit and review of financial reports BDO Audit (WA) Pty Ltd BDO Johannesburg South Africa Non-audit services Taxation and company secretarial (South African entities) BDO Tax (WA) Pty Ltd BDO Johannesburg South Africa	31 Dec 2016 $ 31 Dec 2015 $
	44,020 60,790 23,597 48,588
	67,616 109,378
	71,552 80,366 - 6,964
	71,552 87,330

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 21 and forms part of this report.

Mineral Commodities Ltd Financial Report for the year ended 31 December 2016

Directors’ report (continued)

Auditor

BDO Audit (WA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001 .

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

==> picture [95 x 75] intentionally omitted <==

Mark Caruso Executive Chairman Perth, Western Australia 28 February 2017

Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

==> picture [77 x 30] intentionally omitted <==

DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF MINERAL COMMODITIES LTD

As lead auditor of Mineral Commodities Ltd for the year ended 31 December 2016, I declare that, to the best of my knowledge and belief, there have been:

No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Mineral Commodities Ltd and the entities it controlled during the period.

==> picture [102 x 38] intentionally omitted <==

Phillip Murdoch

Director

BDO Audit (WA) Pty Ltd

Perth, 28 February 2017

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for the acts or omissions of financial services licensees

Mineral Commodities Ltd Annual financial statements for the year ended 31 December 2016

Financial statements

Consolidated income statement ................................................................................................................................................................. 23 Consolidated statement of comprehensive income .................................................................................................................................... 24 Consolidated balance sheet ....................................................................................................................................................................... 25 Consolidated statement of cash flows ........................................................................................................................................................ 27 Consolidated statement of changes in equity ............................................................................................................................................. 28 Notes to the consolidated financial statements .......................................................................................................................................... 29 Directors’ declaration .................................................................................................................................................................................. 73 Independent auditor’s report to the members ............................................................................................................................................ 74

Mineral Commodities Ltd Annual financial statements for the year ended 31 December 2016

Consolidated income statement

For the year ended 31 December 2016

Notes Revenue from continuing operations Sale of product 2.2 Other revenue 2.2 Expenses Mining and processing costs 2.3(i) Other expenses from ordinary activities Administration expenditure 2.3(ii) Impairment charge Share based payment expenses 7.2 Finance costs 5.2 Profit before income tax Income tax (expense) / benefit 2.4(i) Profit after income tax Profit is attributable to: Owners of Mineral Commodities Ltd Non-controlling interest Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the Company: Basic earnings per share 2.5 Diluted earnings per share 2.5	31 Dec 2016 $ 31 Dec 2015 $
	26,872,575 46,180,153 245,900 259,625
	27,118,475 46,439,778 (17,322,306) (30,546,945) (3,074,049) (2,279,479)) - (172,398) (134,458) (132,251) (30,491) (377,556)
	6,557,171 12,931,149 (2,779,337) (2,354,364)
	3,777,834 10,576,785
	3,777,834 10,576,785 - -
	3,777,834 10,576,785
	Cents Cents 0.93 2.61 0.93 2.57

The above consolidated income statement should be read in conjunction with the accompanying notes.

Mineral Commodities Ltd Annual financial statements for the year ended 31 December 2016

Consolidated statement of comprehensive income

For the year ended 31 December 2016

onsolidated statement of comprehensive income or the year ended 31 December 2016
Profit for the year Other comprehensive income Changes in the fair value of available-for-sale financial assets 5.3 Exchange differences on translation of foreign operations 5.3 Other comprehensive income for the year, net of tax Total comprehensive income for the year Total comprehensive income for the year is attributable to: Owners of Mineral Commodities Ltd Non-controlling interest	31 Dec 2016 $ 31 Dec 2015 $
	3,777,834 10,576,785 (50,380) 6,387 3,496,590 (10,240,709)
	3,446,210 (10,234,322)
	7,224,044 342,463
	7,224,044 342,463 - -
	7,224,044 342,463

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

Mineral Commodities Ltd Annual financial statements for the year ended 31 December 2016

Consolidated balance sheet

as at 31 December 2016

Notes ASSETS Current assets Cash and cash equivalents 4.1 Trade and other receivables 4.2 Inventories 4.3 Available-for-sale financial assets Total Current Assets Non-current assets Trade and other receivables 4.2 Exploration expenditure 3.1 Mine development expenditure 3.2 Property, plant and equipment 3.3 Deferred tax assets 2.4(ii) Total Non-Current Assets Total Assets LIABILITIES Current liabilities Trade and other payables 4.4 Borrowings 5.1 Employee benefits 7.1 Current tax liabilities Total Current Liabilities Non-current liabilities Provisions 3.5 Long term borrowings 5.1 Employee benefits 7.1 Deferred tax liabilities 2.4(ii) Total Non-current Liabilities Total Liabilities NET ASSETS	31 Dec 2016 31 Dec 2015 $ $
	2,873,135 4,227,444 2,176,759 2,348,737 7,997,031 2,301,803 12,595 63,866
	13,059,520 8,941,850
	5,807,323 4,650,398 6,460,268 5,323,062 7,656,202 7,589,359 16,103,545 11,302,408 884,646 3,517,369
	36,911,984 32,382,596
	49,971,504 41,324,446
	3,445,086 3,153,297 2,452,592 2,970,210 326,347 252,938 66,849 -
	6,290,874 6,376,445
	152,016 63,000 4,937,073 988,584 49,198 15,086 2,421,766 2,204,851
	7,560,053 3,271,521
	13,850,927 9,647,966
	36,120,577 31,676,480

Mineral Commodities Ltd Annual financial statements for the year ended 31 December 2016

Consolidated balance sheet (continued)

as at 31 December 2016

onsolidated balance sheet(continued) s at 31 December 2016
Notes Equity Contributed equity 5.3 Reserves 5.3 Accumulated losses 5.3 Parent entity interest Non-controlling interest 5.3 TOTAL EQUITY	31 Dec 2016 31 Dec 2015 $ $
	63,437,092 63,437,092 (17,189,759) (20,508,920) (10,240,395) (11,365,331)
	36,006,938 31,562,841 113,639 113,639
	36,120,577 31,676,480

The above consolidated balance sheet should be read in conjunction with the accompanying notes.

Mineral Commodities Ltd Annual financial statements for the year ended 31 December 2016

Consolidated statement of cash flows

For the year ended 31 December 2016

Notes Cash flows from operating activities Receipts from customers (inclusive of goods and services tax) Payments to suppliers and employees Net cash inflow from operating activities 4.1(ii) Cash flows from investing activities Exploration expenditure Payments for property, plant and equipment Payments for development expenditure Advance to third parties Interest received Net cash outflow from investing activities Cash flows from financing activities Dividends paid to shareholders Proceeds from borrowings Repayment of borrowings Interest paid on borrowings Net cash inflow/ (outflow) from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of financial year 4.1 Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of financial year 4.1	31 Dec 2016 31 Dec 2015 $ $
	26,784,168 37,475,013 (22,345,049) (28,336,874)
	4,439,119 9,138,139
	(178,556) (845,318) (6,221,297) (3,356,090) (364,851) (1,869,848) (95,038) - - 8,113
	(6,859,742) (6,063,143)
	(2,914,405) - 5,835,124 3,203,052 (1,430,110) (5,139,048) (385,191) (669,586)
	1,105,418 (2,605,582)
	(1,315,205) 469,414 4,227,444 4,216,052 (39,104) (458,022)
	2,873,135 4,227,444

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

Mineral Commodities Ltd Annual financial statements for the year ended 31 December 2016

Consolidated statement of changes in equity

For the year ended 31 December 2016 At 1 January 2016 Profit for the year Other comprehensive income for the year Total comprehensive income / (loss) for the year Transaction with owners in their capacity as owners Issue of share based payments Transfer to retained earnings on expiry of unlisted options Dividends paid Balance at the end of the year For the year ended 31 December 2015 At 1 January 2015 Profit for the year Other comprehensive loss for the year Total comprehensive income / (loss) for the year Transaction with owners in their capacity as owners Issue of share based payments Balance at the end of the year	For the year ended 31 December 2016 At 1 January 2016 Profit for the year Other comprehensive income for the year Total comprehensive income / (loss) for the year Transaction with owners in their capacity as owners Issue of share based payments Transfer to retained earnings on expiry of unlisted options Dividends paid Balance at the end of the year For the year ended 31 December 2015 At 1 January 2015 Profit for the year Other comprehensive loss for the year Total comprehensive income / (loss) for the year Transaction with owners in their capacity as owners Issue of share based payments Balance at the end of the year	Contributed equity Reserves Accumulated losses Totals Non- controlling interest Total equity $ $ $ $ $ $
		63,437,092 (20,508,920) (11,365,331) 31,562,841 113,639 31,676,480 - - 3,777,834 3,777,834 - 3,777,834 - 3,446,210 - 3,446,210 - 3,446,210
		63,437,092 3,446,210 3,777,834 7,224,044 - 7,224,044 - 134,458 - 134,458 - 134,458 (261,507) 261,507 - - - - - (2,914,405) (2,914,405) - (2,914,405)
		63,437,092 (17,189,759) (10,240,395) 36,006,938 113,639 36,120,577
		Contributed equity Reserves Accumulated losses Totals Non- controlling interest Total equity $ $ $ $ $ $ 63,437,092 (10,402,894) (21,942,116) 31,092,082 113,639 31,205,721 - - 10,576,785 10,576,785 - 10,576,785 - (10,234,322) -(10,234,322) - (10,234,322) - (10,234,322) 10,576,785 342,463 - 342,463 - 128,296 - 128,296 - 128,296 63,437,092 (20,508,920) (11,365,331) 31,562,841 113,639 31,676,480

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements

Structure of the Financial Report

For the 2016 financial report, the Group has adopted AASB 2015-2 Disclosure Initiative: amendments to AASB 101 Presentation of Financial Statements. The amendments are designed to facilitate improved reporting.

To reduce complexity and increase relevance to users, the layout and wording of the notes to the consolidated financial statement in this financial report has been changed. The revised notes include information that is considered material and relevant to understanding the results of the Group. The notes are organised into key sections to provide an enhanced understanding of the Group’s performance that is aligned to management’s view of the business.

Significant and other accounting policies that summarise the measurement bases and that are relevant to the understanding of the financial statements are provided throughout the notes to the financial statements.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

1. Basis of Preparation

This section provides information about the overall basis of preparation that is considered to be useful in understanding these financial statements. Accounting policies specific to the various components of the financial statements are located within the relevant section of the report.

1.1 Corporate information

Mineral Commodities Ltd (the “Company”) is a company limited by shares, domiciled and incorporated in Australia. Its shares are publicly traded on the Australian Securities Exchange (“ASX”). The nature of the operations and principal activities of the Company and its controlled entities are described in the directors’ report and in the segment information in Note 2.1.

The financial report of the Company for the year ended 31 December 2016 was authorised for issue in accordance with a resolution of the directors on 28 February 2017.

1.2 Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board and the requirements of the Corporations Act 2001 . Mineral Commodities Ltd is a for-profit entity for the purpose of preparing the financial statements.

(i) Compliance with IFRS

The consolidated financial statements of the Group also comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

(ii) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the following:

available-for-sale financial assets, financial assets and liabilities (including derivative instruments)

(iii) Presentation currency

The consolidated financial statements are presented in United States (“USD”) dollars, which is the Company’s presentation currency.

(iv) New and amended standards adopted by the Group

The Group applied the following amendments to accounting standards applicable for the first time for the financial year beginning 1 January 2016.
AASB 2015-2 Disclosure Initiative: Amendments to AASB 101 Presentation of Financial Statements This Standard made amendments to AASB 101 Presentation of Financial Statements arising from the IASB’s Disclosure Initiative project. The amendments are designed to facilitate improved reporting, including emphasis on only including material disclosures, clarity on the aggregation and disaggregation of line items, the presentation of subtotals, the ordering of notes and the identification of significant accounting policies. The application of this Standard affects the presentation of the Group’s financial statements.

The accounting policies have been consistently applied by all entities included in the Group and are consistent with those applied in the prior year.

1.3 Comparative Information

Certain comparatives have been reclassified to conform to current year presentation.

1.4 Principles of consolidation

The consolidated financial statements include the financial statements of the parent entity, Mineral Commodities Ltd, and its controlled entities (together are referred to hereafter as the “Group”). A list of significant controlled entities is presented in Note 6.1.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

1. Basis of Preparation (continued)

1.4 Principles of consolidation (continued)

Control is achieved when the Group is exposed, or has the rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Specifically, the Group controls an investee if, and only if, the Group has all of the following:

power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
exposure, or rights, to variable returns from its involvement with the investee; and
the ability to use its power over the investee to affect its returns.

Non-controlling interests in the results and equity of the entities that are not controlled by the Group is shown separately in the Income Statement, Statement of Comprehensive Income, Balance Sheet and Statement of Changes in Equity respectively.

1.5 Foreign currency

(i) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in United States dollars, which is the Company’s presentation currency.

Assets and liabilities for each balance sheet presented have been translated at the closing rate at the date of balance sheet;
Results for the cash flow statement were translated at average daily exchange rates from 1 January 2016 to 31 December 2016; and
exchange differences on translating income, expenses and movements in equity and reserves at annual average exchange rates and assets and liabilities at closing exchange rates from functional currency to presentation currency are taken to the foreign currency translation reserve in the equity section and under other comprehensive income/(expense) in the statement of comprehensive income.

(ii) Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.

Foreign exchange gains and losses that relate to borrowings are presented in the income statement, within finance costs. All other foreign exchange gains and losses are presented in the income statement on a net basis within other income or other expenses.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equities classified as available-for-sale financial assets are recognised in other comprehensive income.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

1. Basis of Preparation (continued)

1.5 Foreign currency (continued)

(ii) Group companies The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
• income and expenses for each income statement and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

1.6 Goods and Services Tax (GST) and Value Added Tax (VAT)

Revenues, expenses and assets are recognised net of the amount of GST and VAT except where the GST and VAT incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST and VAT 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 and VAT included. The net amount of GST and VAT recoverable from, or payable to, the taxation authority is included as part of receivables in the consolidated balance sheet. Cash flows are included in the statements of cash flows on a gross basis and the GST and VAT 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. Commitments and contingencies are disclosed net of the amount of GST and VAT recoverable from, or payable to, the relevant taxation authority.

1.7 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.

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, estimates and assumptions made by management in the preparation of these financial statements are found in the following notes:

Note 2.2: Revenue recognition

Note 2.4: Recognition of deferred taxes

Note 3.1: Exploration and evaluation expenditure

Note 3.2: Development expenditure

Note 3.3: Property, plant and equipment

Note 3.5: Rehabilitation provisions

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

2. Financial Performance

This section highlights key financial performance of the Group for the reporting period including, where applicable, the accounting policies applied and the key estimates and judgements made.

2.1 Segment information

(i) Description of segments

Operating segments are 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.

The chief operating decision maker has identified three reportable segments to its business, being:

Mineral Sands mining and production (Tormin Mineral Sands project) – South Africa;
Mineral Sands exploration (Xolobeni Mineral Sands project) – South Africa; and
Corporate (management and administration of the Company’s projects and marketing and sales of finished products) – Australia and South Africa.

(ii) Segment results, segment assets and segment liabilities

The segment information provided to the chief operating decision maker for the reportable segments for the year ended 31 December 2016 is as follows:

2016 Total segment revenue Inter-segment revenue Revenue from external customers Adjusted EBITDA Depreciation and amortisation Total segment assets Total segment liabilities 2015 Total segment revenue Inter-segment revenue Revenue from external customers Adjusted EBITDA Depreciation and amortisation Total segment assets Total segment liabilities	Tormin Xolobeni Consolidation project project Corporate eliminations Total $ $ $ $ $ 27,008,143 - 26,872,498 - 53,880,641 (26,762,166) - - - (26,762,166)
	245,977 - 26,872,498 - 27,118,475
	4,214,093 5,429 10,147,054 (3,445,604) 10,920,972
	3,903,014 - 64,746 - 3,967,760 20,323,926 5,166,354 70,319,813 (45,838,589) 49,971,504
	11,655,529 5,061,222 41,214,209 (44,080,033) 13,850,927
	Tormin Xolobeni Consolidation project project Corporate eliminations Total $ $ $ $ $ 45,773,169 1 46,219,946 - 91,993,116 (45,534,579) - - - (45,534,579)
	238,590 1 46,219,946 - 46,458,537
	14,487,488 (6,147) (2,981,878) 6,390,035 17,889,498
	4,178,968 - 53,960 - 4,232,928 14,424,727 4,242,685 62,878,801 (40,221,767) 41,324,446
	6,932,933 4,154,609 37,552,832 (38,992,408) 9,647,966

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

2. Financial Performance (continued)

2.1 Segment information (continued)

(iii) Reconciliation of EBIT (segment result) to profit before tax

Adjusted EBITDA reconciles to operating profit before income tax as follows:

Adjusted EBITDA Interest expense Depreciation and amortisation Operating profit before income tax	31 Dec 2016 $ 31 Dec 2015 $
	10,920,972 17,889,498 (396,041) (725,421) (3,967,760) (4,232,928)
	6,557,171 12,931,149

2.2 Revenue

Accounting Policies

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:

Sale of goods

Revenue from the sale of goods is recognised when there is persuasive evidence indicating that there has been a transfer of risks and rewards to the customer, generally for the Group, this is based on free-on-board sales where transfer of risks and rewards passes at port of origin. Sales revenue comprises gross revenue earned from the provision of product to customers. Sales are initially recognised at estimated sales value when the product is delivered. Adjustments are made for variations in metals price, assay, weight and moisture content between the time of delivery and the time of final settlement of sales proceeds.

Revenue from the stockpiling of goods is recognised when there is evidence that there has been a transfer of risks and rewards to the customer. This is based on a contractual obligation of the customer to take final delivery and make full and final payment for all amounts delivered to the stockpile, which is clearly identified and available to the buyer.

From continuing operations Sales revenue Sale of product Other revenue Other	31 Dec 2016 $ 31 Dec 2015 $
	26,872,575 46,180,153
	245,900 259,625
	245,900 259,625

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

2. Financial Performance (continued)

2.3 Expenses

.3 Expenses
This note provides an analysis of expenses by nature. (i) Mining and processing costs Mining and processing costs include the following material expenditure items: Transport of product Fuel Wages and salaries Repairs and maintenance Depreciation and amortisation – mining and processing assets (ii) Administration expenses Administration expenses include the following material expenditure items: Directors and key management personnel remuneration Operating lease rentals Depreciation – corporate assets	31 Dec 2016 $ 31 Dec 2015 $
	2,462,420 4,743,839 3,734,952 3,499,106 4,974,410 5,558,319 2,244,966 3,637,970 3,913,249 4,178,968 1,132,807 1,704,254 1,012,643 68,073 64,706 53,960

.3
Expenses

This note provides an analysis of expenses by nature.
(i)
Mining and processing costs
Mining and processing costs include the following material
expenditure items:
Transport of product
Fuel
Wages and salaries
Repairs and maintenance
Depreciation and amortisation – mining and processing assets
(ii)
Administration expenses
Administration expenses include the following material expenditure items:
Directors and key management personnel remuneration
Operating lease rentals
Depreciation – corporate assets

31 Dec 2016
$
31 Dec 2015
$

2,462,420
4,743,839
3,734,952
3,499,106
4,974,410
5,558,319
2,244,966
3,637,970
3,913,249
4,178,968
1,132,807
1,704,254
1,012,643
68,073
64,706
53,960

2.4 Taxation

(i) Income tax expense/ (benefit)

Accounting Policies

The income tax expense / (benefit) for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

The Company and all of its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian taxation law. Mineral Commodities Ltd is the head entity in the tax-consolidated group. The head entity and the controlled entities in the tax-consolidated group continue to account for their own current and deferred tax amounts. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group).

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

2. Financial Performance (continued)

2.4 Taxation (continued)

(i) Income tax expense/ (benefit) (continued)

The Company and the other entities in the tax-consolidated group have entered into a tax funding agreement and a tax sharing agreement.

The following provides an analysis of the group’s income tax expense / (benefit), shows what amounts are recognised directly in equity and how the tax expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation to the Group’s tax position.

*The components of income tax expense / (benefit) comprise:* Current tax Deferred tax Adjustments for current tax of prior periods Income tax expense / (benefit) is attributable to: Profit from continuing operations Aggregate income tax benefit Deferred income tax benefit included in income tax expense / (benefit) comprises: (Decrease) / increase in deferred tax assets Decrease / (increase) in deferred tax liabilities *Numerical reconciliation of income tax expense / (benefit) to prima facia tax* Profit from continuing operations before income tax expense / (benefit) Prima facia tax payable on profit from ordinary activities before at a rate of 30% (2015: 30%) Foreign tax rate differential Tax at consolidated amount Tax effect of: Entertainment Legal fees Donations Amortisation of exploration and evaluation asset Consulting Assets written off Share based payment Other non-assessable income Utilisation of income tax losses Adjustment for current tax of prior period Income tax expense / (benefit)	31 Dec 2016 $ 31 Dec 2015 $
	301,814 - 2,793,034 2,385,999 (315,511) (31,635)
	2,779,337 2,354,364
	2,779,337 2,354,364
	2,779,337 2,354,364
	(2,632,723) 1,492,770 216,915 (128,263)
	(2,415,808) 1,364,507
	*expense / (benefit)* 31 Dec 2016 $ 31 Dec 2015 $
	6,557,171 12,931,149 1,967,151 3,879,345 (175,337) (53,892)
	1,791,814 3,825,453 3,559 1,886 40,877 182,628 3,595 943 74,475 97,448 - 726 - 27,572 40,337 39,676 1,086,755 (1,790,333) 53,436 - (315,511) (31,635)
	2,779,337 2,354,364

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

2. Financial Performance (continued)

2.4 Taxation (continued)

(i) Income tax expense/ (benefit) (continued)

Amounts recognised directly in equity Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss or other comprehensive income but directly debited or credited to equity: Current tax – credited directly to equity Net deferred tax – debited (credited) to equity	*31 Dec 2016* $ 31 Dec 2015 $ - - - -
	- -

(ii) Deferred tax assets and liabilities

Accounting Policies

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. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Significant Judgement – Deferred taxes recognised

Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses. As a result of this review, at balance date, it was determined that losses of $1,183,970 (2015: $Nil) at 30% have been bought to account as it is now probable that they will be recovered.

In 2015, estimated revenue tax losses not brought to account is A$ Nil and ZAR54,376,151 as their ultimate recoverability has not yet been assessed as probable. These losses are also subject to final verification in the relevant jurisdictions.

(a) Deferred tax assets Recognised deferred tax assets Tax losses Trade and other receivables Provisions/accrued expenditure Business related expenditure and borrowing costs Unrealised foreign exchange loss Set-off against deferred tax liabilities	31 Dec 2016 $ 31 Dec 2015 $ 756,058 1,842,733 97,607 - 151,479 142,773 31,797 75,412 - 1,646,220
	1,036,941 3,707,138 (152,296) (189,769)
	884,646 3,517,369

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

2. Financial Performance (continued)

2.4 Taxation (continued)

(ii) Deferred tax assets and liabilities (continued)
(a) Deferred tax assets (continued)

Movements At 1 January 2016 (charged) / credited - to profit or loss - to other comprehensive income At 31 December 2016	Tax losses Trade and other receivables Provisions/ accrued expenditure Business related expenditure and borrowing costs Unrealised foreign exchange losses Property, plant and equipment Total $ $ $ $ $ $ $ 1,842,733 - 142,773 75,412 1,646,220 - 3,707,138 (1,086,675) 97,607 8,706 (43,615) (1,646,220) - (2,670,197) - - - - - - -
	756,058 97,607 151,479 31,797 - - 1,036,941

Movements Tax losses Trade and other receivables Provisions/ accrued expenditure Business related expenditure and borrowing costs $ $ $ $ At 1 January 2015 3,158,290 - 58,082 235,828 (charged) / credited - to profit or loss (1,315,557) - 84,691 (160,416) - to other comprehensive income - - - - At 31 December 2015 1,842,733 - 142,773 75,412 (b) Deferred tax liabilities Unrealised foreign exchange gain Property, plant and equipment Prepayments Interest receivable Set-off against deferred tax assets	Tax losses Trade and other receivables Provisions/ accrued expenditure Business related expenditure and borrowing costs $ $ $ $ 3,158,290 - 58,082 235,828 (1,315,557) - 84,691 (160,416) - - - - 1,842,733 - 142,773 75,412	Unrealised foreign exchange losses Property, plant and equipment Total $ $ $ 440,212 495,631 4,388,043 1,206,008 (495,631) (680,905) - - -
		1,646,220 - 3,707,138
		31 Dec 2016 $ 31 Dec 2015 $ 190,408 1,761,557 2,362,399 443,295 21,255 2,462 - 187,306 2,574,062 2,394,620 (152,296) (189,769) 2,421,766 2,204,851

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

2. Financial Performance (continued)

2.4 Taxation (continued)

(ii) Deferred tax assets and liabilities (continued)

(c) Deferred tax liabilities (continued)

Movements At 1 January 2016 (charged) / credited - to profit or loss - to other comprehensive income At 31 December 2016 Movements At 1 January 2015 (charged) / credited - to profit or loss - to other comprehensive income At 31 December 2015	Unrealised foreign exchange gain Property, plant and equipment Prepayments Interest receivable Total $ $ $ $ $ 1,761,557 443,295 2,462 187,306 2,394,620 (1,571,149) 1,919,104 18,793 (187,306) 179,442 - - - - -
	190,408 2,362,399 21,255 - 2,574,062
	Unrealised foreign exchange gain Property, plant and equipment Prepayments Interest receivable Total $ $ $ $ $ - - 4,572 346,515 351,087 1,761,557 443,295 (2,110) (159,209) 2,043,533 - - - - -
	1,761,557 443,295 2,462 187,306 2,394,620

2.5 Earnings per share

(i) Basic earnings per share

Accounting Policies

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

d average number of ordinary shares outstanding during the financial year.
From continuing operations attributable to the ordinary equity holders of the Company Total basic earnings per share attributable to the ordinary equity holders of the Company	2016 US Cents 2015 US Cents
	0.93 2.61
	0.93 2.61

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

2.5 Earnings per share (continued)

(ii) Diluted earnings per share

Accounting Policies

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.

From continuing operations attributable to the ordinary equity holders of the Company Total diluted earnings per share attributable to the ordinary equity holders of the Company (a) Reconciliation of earnings used in the calculation of earnings per share Basic earnings per share Profit attributable to the ordinary equity holders of the Company used in calculating basic earnings per share: From continuing operations Diluted earnings/(loss) per share Profit attributable to the ordinary equity holders of the Company used in calculating diluted earnings per share: From continuing operations (b) Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share Adjustment for calculation of diluted earnings per share: Options Performance rights Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share	0.93 2.57
	0.93 2.57
	2016 $ 2015 $
	3,777,834 10,576,785
	3,777,834 10,576,785
	2016 Number 2015 Number
	404,941,581 404,941,581 - 6,000,000 - -
	404,941,581 410,941,581

The table below details the number of options and performance rights that have been granted and are on issue as at 31 December 2016. As the options are out of the money and the performance rights' vesting conditions have not been met as at 31 December 2016, these potential ordinary shares have not been included in the determination of dilutive earnings per share.

Number	Type of Security	Exercise price	Expiry date
5,000,000	Options	AUD $0.20	30 May 2018
1,000,000	Options	AUD $0.20	31 March 2018
4,000,000	Performance Rights	AUD $0.20	30 May 2019

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

2.6 Dividends

Accounting policies

Dividends are recognised as a liability at the time the Directors resolve to pay or declare the dividend.

Dividends recognised during the year 2016 Final 2015 ordinary 2015 Final 2014 ordinary	Dividend per share $ 2016 $
	0.72 2,914,405
	- -

3. Capital Expenditure, Operating Assets and Rehabilitation Obligations

This section includes information about the assets used by the Group to generate profits and revenue, specifically information relating to its exploration and evaluation assets, mine development expenditures, property, plant and equipment, associated rehabilitation obligations, and commitments for capital expenditure not yet recognised as a liability.

3.1 Exploration and evaluation assets

Accounting Policies

Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area of interest. Such expenditure comprises direct costs and does not include general overheads or administrative expenditure not having a specific nexus with a particular area of interest.

Exploration expenditure for each area of interest is carried forward as an asset provided the rights to tenure of the area of interest are current and one of the following conditions is met:

The exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; or
Exploration and evaluation activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interests is continuing.

Exploration expenditure is written off when it fails to meet at least one of the conditions outlined above or an area of interest is abandoned.

When a decision is made to develop an area of interest, all carried forward exploration expenditure in relation to the area of interest is transferred to development expenditure.

No amortisation is charged during the exploration and evaluation phase.

Please refer to note 3.4 for impairment of exploration and evaluation assets.

Significant judgement

Recoupment of the capitalised exploration and evaluation expenditure is dependent on either the successful development and commercial exploitation of the Xolobeni Mineral Sands area of interest in South Africa or the settlement of the proposed transaction, as announced to the Australian Securities Exchange (“ASX”) in July 2016, to divest of the Company’s interest in Transworld Energy and Resources (SA) Pty Ltd (“TEM”), which owns the Xolobeni Mineral Sands Project.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

3. Capital Expenditure, Operating Assets and Rehabilitation Obligations (continued)

3.1 Exploration and evaluation assets (continued)

Significant judgement (continued)

The proposed transaction has not resulted in Xolobeni being classified as held for sale in accordance with AASB 5 as at 31 December 2016, as it is not highly probable that the transaction will complete due to required regulatory approvals, stage of negotiation of the consideration and involvement of a third party who holds shares in TEM.

As at 1 January Expenditure during the year Re-classification: transfer from/ (to) property, plant and equipment 3.3 Exchange differences As at 31 December	31 Dec 2016 $ 31 Dec 2015 $
	5,323,062 6,019,727 229,333 876,641 303,752 - 604,121 (1,573,306)
	6,460,268 5,323,062

3.2 Development expenditure

Accounting Policies

Development expenditure

Development expenditure represents the accumulated exploration, evaluation, land and development expenditure incurred by or on behalf of the Group in relation to areas of interest in which mining of a mineral resource has commenced.

When further development expenditure is incurred in respect of a mine property after commencement of production, such expenditure is carried forward as part of the development expenditure only when substantial future economic benefits are thereby established, otherwise such expenditure is classified as part of the cost of production.

The estimated recoverable reserves and life of the mine and the remaining useful life of each class of asset are reassessed at least annually. Where there is a change in the reserves/resources amortisation rates are correspondingly adjusted. Please refer to the table in note 3.3 for basis of amortisation rates used.

Please refer to note 3.4 for impairment of development expenditure.

Significant judgement

Reserves and Resources

In order to calculate ore reserves and mineral resources, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates. The Group estimates its ore reserves and mineral resources based on information compiled by Competent Persons (as defined in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves as revised in 2012 (the JORC code).

As economic assumptions used to estimate reserves change and as additional geological data is generated during the course of operations, estimates of reserves and mineral resources may vary from period to period. Changes in reported reserves and mineral resources may affect the Group’s financial results and financial position in a number of ways, including the following:

Asset carrying values may be affected due to changes in estimated future cash flows;
Depreciation and amortisation charges in profit or loss may change where such charges are determined by the units of production basis, or where the useful economic lives of assets change; and
Restoration and rehabilitation provision may be affected due to changes in the magnitude of future restoration and rehabilitation expenditure.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

3. Capital Expenditure, Operating Assets and Rehabilitation Obligations (continued)

3.2 Development expenditure (continued)

As at 1 January Expenditure during the year Re-classification: transfer from/ (to) property, plant and equipment 3.3 Amortisation expense Exchange differences	31 Dec 2016 $ 31 Dec 2015 $ 7,589,359 9,621,206 364,263 918,578 - 718,806 (1,213,899) (1,125,089) 916,479 (2,544,142)
	7,656,202 7,589,359

3.3 Property, plant and equipment

Accounting Policies

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 include 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.

De-commissioning assets relates to capitalised restoration costs expected to be incurred.

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.

Depreciation of property, plant and equipment

Depreciation and amortisation is provided to expense the cost of property, plant and equipment, and de-commissioning assets and development, over its estimated useful life on a straight line or units of usage (activity) basis.

The basis of depreciation and amortisation of each asset is reviewed annually and changes to the basis of depreciation and amortisation are made if the straight line or units of production basis is no longer considered to represent the expected pattern of consumption of economic benefits.

The reserves and life of each mine and the remaining useful life of each class of asset are reassessed at regular intervals and the depreciation and amortisation rates adjusted accordingly on a prospective basis. The estimated useful lives for the main categories of assets are as follows:

Fixed Asset Category	Estimated Useful Life
Mine properties and development	The shorter of applicable mine life or generally 10 years
Land	Not depreciated
Mine buildings	The shorter of applicable mine life or generally 10 years
Heavy earth moving vehicles
Excavators and loaders working in significant salt exposed	Generally 12,000 hours operation
conditions
All other heavy earth moving vehicles	Generally 18,000 hours operation
Light and other mobile vehicles	Generally 5 years
Mine specific machinery, plant and equipment	The shorter of applicable mine life or generally 10 years
Other machinery, plant and equipment	Generally 10 years
Computer hardware	Generally 4 years
Software acquisitions and development	Generally 3 years

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

3. Capital Expenditure, Operating Assets and Rehabilitation Obligations (continued)

3.3 Property, plant and equipment (continued)

Depreciation of property, plant and equipment (continued)

Fixed Asset Category	Estimated Useful Life
Office leasehold fit-outs	Generally lease term, including extensions
Other office furniture and fittings	Generally 10 years

Note: For assets under a finance lease, if there is no reasonable certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of the lease term or its useful life.

Note: “Generally” implies that if a specific asset or class of assets useful life is reasonably able to be determined as less than that stipulated above, then the applicable lower estimated useful life is to be used.

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.

Significant judgement

Estimation of useful lives of assets

The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life mine development assets which requires significant estimation and judgement. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or nonstrategic assets that have been abandoned or sold will be written off or written down.

The estimated recoverable reserves and life of the mine and the remaining useful life of each class of asset is reassessed at least annually based upon latest resource information and replenishment rates. In circumstances where conversion of resources into reserves is expected, applicable resources are included in life of mine assessments and reassessments. In circumstances where there is reasonable evidence of natural replenishment of resources, the applicable natural replenishment resource estimates is included in the life of mine assessments and reassessments.

Where the life of the assets are shorter than the mine life, their costs are amortised based on the useful life of the assets. Where there is a change in the estimated life of mine, amortisation rates are correspondingly adjusted which may change the depreciation and amortisation charges in the statement of profit or loss and other comprehensive income.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

3. Capital Expenditure, Operating Assets and Rehabilitation Obligations (continued)

3.3 Property, plant and equipment (continued)

3.3 Property, plant and equip	ment(continued)
	Freehold land and buildings Furniture, fittings and equipment Plant and machinery Mine vehicles Decom- missioning asset Capex work in progress $ $ $ $ $ $	Total $
Year ended 31 December 2016
Cost at fair value As at 1 January 2016 Additions Re-classifications Exchange differences As at 31 December 2016 Accumulated depreciation and amortisation As at 1 January 2016 Depreciation and amortisation Exchange differences As at 31 December 2016 Net book amount Cost at fair value Accumulated depreciation and amortisation Net book amount	16,513 428,137 13,499,398 66,466 52,784 1,564,585 - - - - 86,845 6,170,301 482,784 127,659 6,253,505 47,471 - (7,214,991) 33,410 16,522 2,133,509 11,586 12,387 111,347 532,707 572,318 21,886,412 125,523 152,016 631,242 (555) (239,530) (4,053,546) (21,287) (10,557) - (8,028) (108,673) (2,598,707) (17,003) (31,645) - (591) (11,946) (687,375) (3,827) (3,403) - (9,174) (360,149) (7,339,628) (42,117) (45,605) - 532,707 572,318 21,886,412 125,523 152,016 631,242 (9,174) (360,149) (7,339,628) (42,117) (45,605) - 523,533 212,169 14,546,784 83,406 106,411 631,242 Freehold land and buildings Furniture, fittings and equipment Plant and machinery Mine vehicles Decom- missioning asset Capex work in progress $ $ $ $ $ $	15,627,883 6,257,146 (303,572) 2,318,761
		23,900,218
		(4,325,475) (2,764,056) (707,142)
		(7,796,673)
		23,900,218 (7,796,673)
		16,103,545
		Total $ 16,378,953 4,312,473 (109,412) (4,954,131) 15,627,883 (1,736,713) (3,088,841) 10,941 (718,806) 1,207,944 (4,325,475) 15,627,883 (4,325,475) 11,302,408
Year ended 31 December 2015
Cost at fair value As at 1 January 2015 Additions Re-classifications Exchange differences As at 31 December 2015 Accumulated depreciation and amortisation As at 1 January 2015 Depreciation and amortisation Disposal Re-classifications Exchange differences As at 31 December 2015 Net book amount Cost at fair value Accumulated depreciation and amortisation Net book amount	22,567 381,829 15,892,012 10,412 72,133 - - 111,536 2,271,263 41,698 - 1,887,976 - - (109,412) - - - (6,054) (65,228) (4,554,465) 14,356 (19,349) (323,391) 16,513 428,137 13,499,398 66,466 52,784 1,564,585 (795) (183,468) (1,536,079) (8,807) (7,564) - - (127,153) (2,943,844) (11,420) (6,424) - - - 10,941 - - - - (1,858) (716,948) - - - 240 72,949 1,132,384 (1,060) 3,431 - (555) (239,530) (4,053,546) (21,287) (10,557) - 16,513 428,137 13,499,398 66,466 52,784 1,564,585 (555) (239,530) (4,053,546) (21,287) (10,557) - 15,958 188,607 9,445,852 45,179 42,227 1,564,585

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

3. Capital Expenditure, Operating Assets and Rehabilitation Obligations (continued)

3.4 Impairment of non-current assets

Accounting Policies

The carrying amounts of the Group’s exploration and evaluation assets, development expenditure and property, plant and equipment are reviewed at each reporting date to determine whether there is any indication of impairment. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made.

Indicators of impairment – exploration and evaluation assets

The carrying amounts of the Group’s exploration and evaluation assets are reviewed at each reporting date, to determine whether any of the following indicators of impairment exists:

(i) Tenure over the licence area has expired during the period or will expire in the near future, and is not expected to be renewed; or
(ii) Substantive expenditure on further exploration for, and evaluation of, mineral resources in the specific area is not budgeted or planned; or
(iii) Exploration for, and evaluation of, resources in the specific area have not led to the discovery of commercially viable quantities of resources, and the Group has decided to discontinue activities in the specific area; or
(iv) Sufficient data exists to indicate that although a development is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or from sale.

Impairment testing – other assets

Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or Groups of assets (cash-generating units).

Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

3.5 Rehabilitation provisions

Accounting Policies

Provisions for environmental rehabilitation are recognised when the Group has a present legal or constructive obligation as a result of exploration, development, production activities undertaken and it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.

The estimated future obligations include the costs of removing facilities and restoring the affected areas and is the best estimate of the present value of the future expenditure required to settle the environmental rehabilitation at reporting date, based on current legal requirements. Any changes in the estimate are reflected in the present value of the environmental rehabilitation provision at the reporting date, with a corresponding change in the cost of the associated asset.

Significant judgement

A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or mined. The Group’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The Group recognises management's best estimate for assets retirement obligations and site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

3. Capital Expenditure, Operating Assets and Rehabilitation Obligations (continued)

3.5 Rehabilitation provisions (continued)

Non-current Environmental rehabilitation provision	31 Dec 2016 $ 31 Dec 2015 $ 152,016 63,000
	152,016 63,000

3.6 Commitments for expenditure

The Group has the following commitments for expenditure for which no liabilities have been recorded in the financial statements as the goods or services have not been received, including non-cancellable operating lease rentals:

a) Capital commitments Committed at the reporting date but not recognised as liabilities, payable: Property, plant and equipment b) Operating lease commitments	31 Dec 2016 $ 31 Dec 2015 $ 21,904 1,117,471

Accounting Policies

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.

Lease income from operating leases where the Group is a lessor is recognised in income on a straight-line basis over the lease term. The respective leased assets are included in the balance sheet based on their nature.

Non-cancellable operating leases contracted for but not capitalised in the accounts:

on-cancellable operating leases contracted for but not capitalised in the accounts:
Within one year Later than one year but no later than five years Greater than 5 years	947,782 741,445 1,815,084 2,166,578 - -
	2,762,866 2,908,023

Operating lease commitments includes contracted amounts for offices and plant and equipment under non-cancellable operating leases expiring within one to five years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.

4. Working Capital Management

This section provides information about the Group’s working capital balances and management, including cash flow information.

4.1 Cash and cash equivalents

Accounting Policies

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

4. Working Capital Management (continued)

4.1 Cash and cash equivalents (continued)

The carrying amounts of cash and cash equivalents represent fair value. Bank balances and deposits held at call earn interest at floating rates based upon market rates.

Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

Cash assets Cash at bank and in hand	31 Dec 2016 $ 31 Dec 2015 $
	2,873,135 4,227,444

(i) Interest rate risk exposure

The Group’s exposure to interest rate risk is discussed in note 5.4(a)(ii).

(ii) Reconciliation of profit after income tax to cash flow from operating activities

Profit for the year Depreciation and amortisation Interest income Assets written off Impairment loss Finance costs Share based payments Net exchange differences Change in operating assets and liabilities: Decrease / (increase) in trade debtors Decrease / (increase) in inventories (Decrease) / increase in trade payables and unearned revenue Increase in provisions	3,678,874 10,576,785 3,967,760 4,232,928 - (8,113) (216,267) 98,471 (150,898) 172,398 370,513 668,002 134,458 132,252 855,867 (6,466,633) 1,376,509 2,866,394 (5,075,478) 2,773,023 (355,982) (6,082,914) (146,237) 175,546
	4,439,119 9,138,139

(iii) Non-cash investing and financing activities

During the period the Group entered into Instalment Sale Agreements to acquire mobile mining equipment. Under the terms of these agreements the Group will become the owner of the mobile mining equipment on final payment under the agreement. Refer to note 5.1 for further details.

4.2 Trade and other receivables

Accounting Policies

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

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.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

4. Working Capital Management (continued)

4.2 Trade and other receivables (continued)

rade and other receivables(continued)
Current Trade receivables Less: Provision for impairment of receivables Other receivables(i) Prepayments Non-current Trade receivables(ii) Security deposits(iii) Advance to Blue Bantry(iv) Other receivables	31 Dec 2016 $ 31 Dec 2015 $
	1,079,530 1,842,030 (21,500) (172,398)
	1,058,030 1,669,632 1,031,062 654,389 87,667 24,716
	2,176,759 2,348,737
	4,896,142 3,937,487 211,205 182,088 598,777 530,823 101,199 -
	5,807,323 4,650,398

(i) Includes $497,664 (2015: $223,507) of VAT refundable from the South African Revenue Service.
(ii) The amount relates to bill and hold sales arising from an offtake agreement with a customer. It has been recorded at amortised cost as payment is expected when shipment occurs from January 2018.
(iii) Includes a secured deposit of $211,205 (2015: $182,088) 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.
(iv) An amount of ZAR 8.25 million (2015: ZAR 8.25 million) has been advanced to the BEE partner, Blue Bantry. Refer to note 8.2 for details.

Impairment of receivables

The Group has recognised a loss of $ NIL (2015: $172,398) in profit or loss in respect of impairment of receivables for the year ended 31 December 2016.

Fair values and credit risk

Except for the non-current trade receivables, due to the short term nature of these receivables the carrying values represent their respective fair values as at 31 December 2016 and 2015. The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables mentioned above. The non-current receivables have a fair value of $4,896,142 as at 31 December 2016, compared to a carrying amount of $5,200,000 (2015: fair value of $3,937,487 and carrying amount of $4,200,000).

The fair values were calculated based on cash flows discounted using a current lending rate. Refer to note 5.4 for more information on the risk management policy of the Group and the credit quality of the entity’s receivables.

Foreign exchange and interest rate risk

Information about the Group’s exposure to foreign exchange and interest rate risk in relation to trade and other receivables is provided in note 5.4.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

4. Working Capital Management (continued)

4.3 Inventories

Accounting Policies

Raw materials and stores, ore stockpiles and work in progress and finished stocks are physically measured or estimated and valued at the lower of cost and net realisable value. Net realisable value less costs to sell is assessed annually based on the amount estimated to be obtained from sale of the item of inventory in the normal course of business, less any anticipated costs to be incurred prior to its sale.

Weighted average cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure and depreciation and amortisation relating to mining activities, the latter being allocated on the basis of normal operating capacity. As a result of mineral sands being co-products from the same mineral separation process, costs are allocated to the various finished products on the basis of the relative sales value of the finished goods produced. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

Inventories of consumable supplies and spare parts expected to be used in production are valued at the lower of weighted average cost, which includes the cost of purchase as well as transportation and statutory charges, or net realisable value. Any provision for obsolescence is determined by reference to specific stock items identified.

Raw materials at cost Finished product at cost Spare parts and consumables at cost	31 Dec 2016 $ 31 Dec 2015 $
	69,464 84,121 5,888,188 857,157 2,039,379 1,360,525
	7,997,031 2,301,803

The costs of individual items of inventory are determined using weighted average cost.

4.4 Trade and other payables

Accounting Policies

Trade and other payables are recognised originally at fair value and subsequently measured at amortised cost using the effective interest rate method. Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of each reporting period that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date.

ithin 12 months from the reporting date.
Trade payables Other payables and accruals	31 Dec 2016 $ 31 Dec 2015 $
	2,596,770 2,310,593 848,316 842,704
	3,445,086 3,153,297

(i) 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 2016 and 2015.

(ii) Foreign exchange and interest rate risk

Information about the Group’s exposure to foreign exchange and interest rate risk in relation to trade and other payables is provided in note 5.4.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

5. Funding and Risk Management

This section provides information relating to the management of capital, credit, liquidity and market risks and the policies for measuring and managing these risks.

5.1 Interest bearing loans and borrowings

Accounting Policies

All loans and borrowings are initially recognised at cost, being fair value of the consideration received net of issue costs associated with the borrowing.

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.

Gains and losses are recognised in the income statement when the liabilities are derecognised and as well as through the amortisation process.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting periods.

Details of the contractual maturities can be found in Note 5.4.

Current

Current
Short term borrowings – unsecured (1) Amounts due under equipment acquisition agreements (2),(3) Non-current Long term borrowings – secured (4) Amounts due under equipment acquisition agreements (2),(3)	31 Dec 2016 $ 31 Dec 2015 $
	1,135,523 1,263,416 1,317,069 1,706,794
	2,452,592 2,970,210
	4,500,000 - 437,073 988,584
	4,937,073 988,584

(1) The short term borrowings at 31 December 2016 was in relation to shareholder loans (note 7.3). The amount has been fully repaid immediately after year end.
(2) The Group entered into Master Rental Agreements to acquire mobile mining equipment and generators. Under the terms of these agreements, there was an option to purchase which the Group exercised for the mobile mining equipment.
(3) The Group entered into Instalment Sale Agreements to acquire mobile mining equipment. Under the terms of these agreements, the Group will become the owner of the mobile mining equipment on final payment under the agreements.
(4) The Group entered into a $4.5 million financing arrangement with GMA for its Garnet Stripping Plant (“GSP”) expansion. Under the terms of the agreement, the borrowing is charged at Libor + 2% and repaid over three years from the repayment commencement date. The borrowings is secured by a special notarial bond over the GSP.

a) Bank Overdraft

The Group has available and unutilised, as at 31 December 2016, a United States denominated Foreign Currency Overdraft Facility of $1.1 million. The facility was reduced to $0.5 million subsequent to year end.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

5. Funding and Risk Management (continued)

5.1 Interest bearing loans and borrowings (continued)

b) Finance lease commitments

Accounting Policies

Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other short-term and long-term payables. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the asset’s useful life or over the shorter of the asset’s useful life and the lease term if there is no reasonable certainty that the Group will obtain ownership at the end of the lease term.

Commitments in relation to minimum lease repayments under equipment acquisition agreements:

Within one year Later than one year but no later than five years Greater than 5 years Minimum lease payments Less: Future Finance Charges	31 Dec 2016 $ 31 Dec 2015 $
	1,346,555 1,989,527 442,496 1,268,110 - -
	1,789,051 3,257,637 (139,473) (225,658)
	1,649,578 3,031,979

Finance lease commitments includes contracted amounts for various plant and equipment with a written down value of $1,949,556 (2015: $3,134,220) secured under finance leases expiring within one to five years. Under the terms of the leases, the Group will become the owner of the leased assets on the final payment under instalment sale agreements.

5.2 Net finance costs

Accounting Policies

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

Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.

Finance income Interest Income Total finance income Finance costs Interest paid to third parties Unwind of the effect of discounting on long term receivables Total finance costs Net finance costs	31 Dec 2016 $ 31 Dec 2015 $
	42,704 18,759
	42,704 18,759 189,529 396,315
	(116,334) -
	73,195396,315
	(30,491) (377,556)

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

5. Funding and Risk Management (continued)

5.3 Equity

(a) Contributed equity

Accounting Policies

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.

(i) Share capital Ordinary shares Fully paid	2016 2015 2016 2015 Number of shares Number of shares $ $ 404,941,581 404,941,581 63,437,092 63,437,092

(ii) Movements in ordinary share capital

Details At 1 January 2016 Conversion of listed options Placement of ordinary shares Proceeds from rights issue Share issue costs At 31 December 2016 Transaction costs arising on share issue At 31 December 2016	Number of shares $
	404,941,581 63,437,092 - - - - - - - -
	404,941,581 63,437,092 - -
	404,941,581 63,437,092

(iii) 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.

(iv) Capital risk management

The Group’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.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

5. Funding and Risk Management (continued)

5.3 Equity (continued)

(b) Reserves

The following table shows a breakdown of the balance sheet line item ‘other reserves’ and the movements in these reserves during the year. A description of the nature and purpose of each reserve is provided below the table.

	General reserve Financial asset revaluation reserve Foreign currency translation reserve Share based payment reserve Total $ $ $ $ $
At 1 January 2015 Issue of unlisted options Exchange differences on translation of foreign operations Change in fair value of available-for- sale financial assets At 1 January 2016 Issue of share based payments Transfer to retained earnings on expiry of unlisted options Exchange differences on translation of foreign operations Change in fair value of available-for- sale financial assets At 31 December 2016	1,363,393 (232,908) (11,850,427) 317,048 (10,402,894) - - - 128,296 128,296 - - (10,240,709) - (10,240,709) - 6,387 - - 6,387
	1,363,393 (226,521) (22,091,136) 445,344 (20,508,920) - - - 134,458 134,458 - - - (261,507) (261,507) - - 3,496,590 - 3,496,590 - (50,380) - - (50,380)
	1,363,393 (276,901) (18,594,546) 318,295 (17,189,759)

Nature and purpose of reserves

General reserve

The General reserve arose from the issue of shares in MRC Resources Proprietary Limited to an entity outside the economic entity.

Financial asset revaluation reserve

The financial asset revaluation reserve arises from the revaluation at reporting 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.

Share based payment reserve

Records the amounts received in a prior year together with the amounts amortised for employee options in the current year from the issue of listed options.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

5. Funding and Risk Management (continued)

5.3 Equity (continued)

(a) Accumulated losses

(a) Accumulated losses
At 1 January Profit for the year Dividend Distribution Transfer from reserves on expiry of unlisted options At 31 December (b) Non-controlling interest At 1 January Movement for the year At 31 December	31 Dec 2016 $ 31 Dec 2015 $
	(11,365,331) (21,942,116) 3,777,834 10,576,785 (2,914,405) - 261,507 -
	(10,240,395) (11,365,331)
	31 Dec 2016 $ 31 Dec 2015 $
	113,639 113,639 - -
	113,639 113,639

5.4 Financial risk management

Accounting Policies

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

(i) Recognition and de-recognition

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.

(ii) 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.

(iii) Financial Liabilities

Financial liabilities are recognised initially at fair value and subsequently at amortised cost, comprising original debt less principal payments and amortisation of transaction costs.

(iv) Impairment

At each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. Impairment losses are recognised in profit or loss. Impairment losses recognised on equity instruments classified as available for sale are not reversed through the income statement.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

5. Funding and Risk Management (continued)

5.4 Financial risk management (continued)

This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial performance. Current year profit or loss information has been included where relevant to add further context.

The Group’s activities expose it to a variety of financial risks, as detailed in the below table:

Risk	Exposure arising from	Measurement	Management
Market risk – foreign exchange risk	Future commercial transactions Recognised financial assets and liabilitiesnot denominatedinUSD	Cash flow forecasting Sensitivity analysis	Monitoring the prevailing exchange rates and entering into forward foreign exchange contracts, if deemed necessary by theBoard of Directors
Market risk – interest rate risk	The Company’s borrowings are at fixed interest rates, therefore, it is not exposed to changes in variable interestrates	N/A	N/A
Market risk – pricerisk	Investments in equity securities	Sensitivity analysis	NA
Market risk – commodity price risk	Sale of products	Cash flow forecasting Sensitivity analysis	Monitoring the prevailing commodity prices and entering into longer term fixed price sales contracts, if deemed necessary by theBoard of Directors
Credit risk	Cash and cash equivalents and trade and other receivables	Aging analysis Creditratings	Credit limits, retention of title over product sold andletters ofcredit
Liquidity risk	Borrowings and other liabilities	Rolling cash flow forecasts	Availability of committed credit lines and borrowingfacilities

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 with assistance from the Audit, Risk and Compliance Committee.

The Group does not hold any derivative financial instruments.

(a) Market risk

(i) Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures.

As detailed in note 1.5, items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in United States dollars, which is the Company’s presentation currency.

Subsequent to year-end, the Group has fully repaid its foreign currency borrowings and thus, the exposure to foreign currency risk at the end of the reporting period arising from the foreign currency borrowings is not considered material.

The Group does not hold any derivatives or foreign exchange contracts to hedge its foreign exchange risk exposure.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

5. Funding and Risk Management (continued)

5.4 Financial risk management (continued)

(a) Market risk (continued)

(i) Foreign exchange risk (continued)

Based on the financial instruments held at the reporting date, the sensitivity of the Group’s profits after tax for the year and equity at the reporting date to movements in the United States Dollar to South African Rand (ZAR) was:

Sensitivity

ensitivity
		Impact on	Impact	on other
	post tax profits		components of equity
	2016	2015	2016	2015
	$	$	$	$
USD/ZAR exchange rate – increase 10%	287,281	769,511	-	-
USD/ZAR exchange rate – decrease 10%	(287,281)	(769,511)	-	-

(ii) Interest rate risk

The Group’s exposure to interest rate risk relates primarily to the Group’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.

(iii) Price risk

The Group has an exposure to equity securities price risk. This arises from investments held by the Group and classified on the balance sheet as available-for-sale financial assets. However, the Company’s investment in equity securities (available-for-sale financial assets) is $12,595 (2015: $63,866), which is monitored by the Board of Directors. Any investment in equity securities, which formed part of any portfolio diversification strategy, would require approval by the Board of Directors.

The Group is also exposed to commodity price risk as a result of fluctuations in the market price of commodities, however, the commodities that the Company produces and sells are not quoted on any recognised exchange.

(iv) 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 Group has a strict code of credit and requires the majority of its customers to have letters of credit in place. The maximum exposure to credit risk at the reporting date to trade receivables is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance sheet and notes to the financial statements. The Group does not hold any collateral.

(v) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash to meet obligations when due. At the end of the reporting period, the Group held cash and cash equivalents totalling $2,873,135 (2015: $4,227,444). Management monitors rolling forecasts of the Group’s liquidity reserve (comprising of cash and cash equivalents, note 4.1) on the basis of expected cash flows. This is carried out at the corporate level for all active companies of the Group in accordance with practice and limits set by the Group.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

5. Funding and Risk Management (continued)

5.4 Financial risk management (continued)
(b) Market risk (continued)
(v) Liquidity risk (continued)

Financing arrangements

On 30 May 2014, the Company obtained an unsecured short term working capital facility of up to $4m from two major shareholders. Pursuant to the Loan Agreements entered into between the Company and the two major shareholders, the lenders provided a finance facility capped at $2.0m each on the following arm’s-length and commercial terms:

Loan is unsecured;
Interest of 13% per annum;
Line fee of 1% and establishment fee of 1%;
Repayment to take in three equal tranches on 31 January 2015, 28 February 2015 and 31 March 2015; and
Default interest of 10% if not repaid on the repayment date.

The above repayment dates were subsequently extended and the loans have been fully repaid immediately subsequent to year end.

On 2 February 2016, the Company announced debt funding arrangements for its expansion initiatives relating to a GSP at its Tormin mine. Under the terms of the agreement, the borrowing is charged at Libor + 2% and repaid over three years from the repayment commencement date. The borrowings is secured by a special notarial bond over the GSP.

Maturity of financial assets

The Group manages liquidity risk by maintaining sufficient cash reserves and through the continuous monitoring of budgeted and actual cash flows. At the reporting date there is no significant liquidity risk. The table below analyses the Group’s maturity of financial assets:

31 December 2016 Trade and other receivables Total financial assets 31 December 2015 Trade and other receivables Total financial assets	< 6 months 6 – 12 months 1 – 5 years 5+ years Total contractual cashflows Carrying amount $ $ $ $ $ $ 1,079,530 - 5,200,000 - 6,440,647 5,975,672
	1,079,530 - 5,2000,000 - 6,440,647 5,975,672
	< 6 months 6 – 12 months 1 – 5 years 5+ years Total contractual cashflows Carrying amount $ $ $ $ $ $ 2,240,647 - 4,200,000 - 6,440,647 6,178,134
	2,240,647 - 4,2000,000 - 6,440,647 6,178,134

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

5. Funding and Risk Management (continued)

5.4 Financial risk management (continued)

(a) Market risk (continued)
(v) Liquidity risk (continued)

Maturity of financial liabilities

31 December 2016 Trade and other payables Borrowings: • Short term borrowings • Equipment acquisition agreements • Long term borrowings Total financial liabilities 31 December 2015 Trade and other payables Borrowings: • Short term borrowings • Equipment acquisition agreements Total financial liabilities	< 6 months 6 – 12 months 1 – 5 years 5+ years Total contractual cashflows Carrying amount $ $ $ $ $ $ 3,445,087 - - - 3,445,087 3,445,087 1,135,522 - - - 1,135,522 1,135,522 673,277 673,277 442,496 - 1,789,050 1,754,143 - - 4,500,000 - 4,500,000 4,500,000
	5,253,886 673,277 4,942,496 - 10,869,659 10,834,752
	< 6 months 6 – 12 months 1 – 5 years 5+ years Total contractual cashflows Carrying amount $ $ $ $ $ $ 3,153,297 - - - 3,153,297 3,153,297 - 1,263,416 - - 1,263,416 1,263,416 994,764 994,764 1,268,110 - 3,257,638 2,695,378
	4,148,061 2,258,180 1,268,110 - 7,674,351 7,112,091

(vi) Fair value hierarchy

AASB 13 requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly (level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

The Group’s only assets and liabilities held at fair value are its available-for-sale financial assets with a current carrying value of $12,595 (2015: $63,866). These are measured using quoted active market prices and are therefore Level 1 instruments.

The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis as at 31 December 2016 and did not transfer any fair value amounts between the fair value hierarchy during the year ended 31 December 2016.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

5. Funding and Risk Management (continued)

5.4 Financial risk management (continued)

(a) Market risk (continued)

(vi) Fair value hierarchy (continued)

Valuation techniques used to derive level 2 and level 3 fair values

The fair value of financial instruments that are not traded in an active market (for example, over–the–counter derivatives) is determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. The Group did not have any level 2 instruments at year end.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Specific valuation techniques used to value financial instruments include:

The use of quoted market prices or dealer quotes for similar instruments;
The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves;
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the reporting date; and
• Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.

The Group does not have any level 3 assets or liabilities.

6. Group structure

6.1 Consolidated entities

Accounting Policies

Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

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

Associates

Associates are entities over which the group has significant influence but not control or joint control. This is generally the case where the group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting (see (iii) below), after initially being recognised at cost.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

6. Group structure

6.1 Consolidated entities (continued)

Equity method

Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the group’s share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.

When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity.

Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group.

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of the Company.

Non-controlling interests

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement, statement of comprehensive income, statement of changes in equity and balance sheet respectively.

The Company, via its wholly owned subsidiary MRC Resources Proprietary Limited (“MRCR”), has a 50% interest in the issued capital in Mineral Sands Resources Proprietary Limited (“MSR”). Whilst the Group controls 50% of the share voting power, it has been determined that the Group effectively has 100% control due to its control over the relevant activities for accounting purposes, controls the management of MSR, and also controls the Board of MSR due to provisions set out in the Shareholders Agreement entered into between the shareholders of MSR.

Therefore these financial statements include 100% of the results of MSR. In addition to the holding of the issued capital, the Group also holds Class A and B preference shares in MSR which effectively provides for the repayment of the capital investment and deemed investment by the Company’s Black Empowerment partner. Due to the terms attached to these A and B Preference Shares, they are categorised as an equity instrument. As the A preference shares and B preference shares would be redeemed out of distributable profits and net assets of MSR before all other ordinary shareholders, until such time as the net assets exceed the value of the unredeemed A and B preference shares, no value has been attributed to the non-controlling interest. Until that time, the non-controlling interest has no rights to the assets or results of the Company, and therefore has not been allocated any value in these financial statements.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

6. Group structure

6.1 Consolidated entities (continued)

(i) Material subsidiaries

The Group’s principal subsidiaries at 31 December 2016 are set out below. Unless otherwise stated, they have share capital consisting solely of ordinary shares that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the group. The country of incorporation or registration is also their principal place of business.

		Ownership	interest held by the	Ownership interest held by non-	Ownership interest held by non-
			Group	controlling interests
	Place of
	business /
	country of	2016	2015	2016	2015
Name of entity	incorporation	%	%	%	%
Rexelle Pty Ltd	Australia	100	100	-	-
MRC Trading (Aust) Pty Ltd	Australia	100	100	-	-
MRC Cable Sands Pty Ltd	Australia	100	100	-	-
Blackhawk Oil and Gas Ltd	Australia	100	100	-	-
Queensland Minex NL	Australia	100	100	-	-
Q Smelt Pty Ltd	Australia	90	90	10	10
Mincom Waste Pty Ltd	Australia	100	100	-	-
MRC Africa Pty Ltd	Australia	100	100	-	-
Skeleton Coast Resources (Pty) Ltd	Namibia	100	100	-	-
MRC Resources Proprietary Limited	South Africa	100	100	-	-
Mineral Sands Resources Proprietary Limited	South Africa	50	50	50	50
Tormin Mineral Sands Proprietary Limited(1)	South Africa	50	50	50	50
Nyati Titanium Eastern Cape Proprietary Limited	South Africa	100	100	-	-
MRC Metals Proprietary Limited	South Africa	100	100	-	-
Transworld Energy and Minerals Resources (SA)
Proprietary Limited	South Africa	56	56	44	44

(1) Tormin Mineral Sands Proprietary Limited is a wholly owned subsidiary of Mineral Sands Resources Proprietary Limited

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

6. Group structure

6.1 Consolidated entities (continued)

(ii) Non-controlling interest (“NCI”)

			Transworld Energy and Minerals Resources (SA) Proprietary Limited Mineral Sands Resources Proprietary Limited Tormin Mineral Sands Proprietary Limited Q Smelt Pty Ltd 2016 2015 2016 2015 2016 2015 2016 2015 $ $ $ $ $ $ $ $
Summarised balance sheet Current assets Current liabilities Current net assets Non-current assets Non-current liabilities Non-current net assets Net assets Accumulated NCI Summarised statement of comprehensive income			- 60,708 33,436,612 20,854,641 - - - 1 (16,737) - (23,807,550) (12,846,360) - - - -
			(16,737) 60,708 9,629,062 8,008,281 - - 1 1
			5,170,073 4,186,382 25,033,375 19,732,050 5,218,099 5,218,099 - - (5,004,491) (4,118,529) (24,797,349) (18,091,240) - - - -
			165,582 67,853 236,026 1,640,810 5,218,099 5,218,099 - -
			182,320 128,561 9,865,088 9,649,091 5,218,099 5,218,099 1 1
			- - - - - 39,933 39,933

Revenue Profit/ (loss) for the period Other comprehensive income Total comprehensive income Profit attributable to NCI Summarised cash flows			- - 27,036,542 45,773,169 - - - - 5,429 (6,147) 204,294 6,894,449 - - - - - - - - - - - -
			5,429 (6,147) 204,294 6,894,449 - - - -
			- - - - - - - -

Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net increase in cash and cash equivalents			43,890 (34,808) (19,141,614) (21,195,262) - - - - (43,851) 35,199 13,443,438 (5,189,526) - - - - - - 4,220,005 27,699,986 - - - -
			39 391 (1,478,171) 1,315,198 - - - -

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

6. Group structure

6.2 Parent entity financial information

The financial information for the parent entity, Mineral Commodities Ltd, has been prepared on the same basis as the consolidated financial statements, unless stated otherwise.

Accounting Policies

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

Investments in associates are accounted for in the parent entity financial statements using the cost method.

The individual financial statements for the parent entity show the following aggregate numbers:

Balance sheet Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets Shareholders’ equity Issued capital Reserves Accumulated losses Total equity (Loss)/ Profit for the year	31 Dec 2016 $ 31 Dec 2015 $
	1,744,251 546,439 39,063,074 35,327,540
	40,807,325 35,873,979
	1,717,286 1,840,821 15,859,771 7,425,240
	17,577,057 9,266,061

	23,230,268 26,607,918
	63,437,092 63,437,092 (28,200,926) (11,719,886) (12,005,898) (25,109,288)
	23,230,268 26,607,918
	(177,233) 2,170,337

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

7. People

This section provides information in relation to the Group employee benefits, share-based payment schemes and related party transactions.

7.1 Employee Benefits

Accounting policies

Provision is made for the Group’s liability for employee entitlements arising from services rendered by employees to reporting date. These benefits include annual and long service 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.

Current Annual leave provision Non-current Long service leave provision	31 Dec 2016 $ 31 Dec 2015 $
	326,347 252,938
	49,198 15,086
	49,198 15,086

7.2 Share based payments

Accounting policies

Equity-settled share-based compensation benefits are provided to certain senior employees.

Equity-settled transactions are awards of options over shares that are provided to employees in exchange for the rendering of services.

The cost of equity-settled transactions is measured at fair value at grant date. Fair value is independently determined using the Black-Scholes 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. No account is taken of any other vesting conditions.

The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative change to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

7. People (continued)

7.2 Share based payments (continued)

a) Employee Options

The issue of employee options was approved by shareholders at a general meeting of the Company held on 21 December 2012. The employee option plan (“the Plan”) is designed to provide long-term incentives for senior managers and above (including directors) to deliver long-term shareholder returns. Options granted under the plan carry no dividend or voting rights. When exercisable each option is convertible into one ordinary share at the predetermined exercise price.

On 27 May 2015, at the AGM of the Company, shareholders approved the issue of 5,000,000 employee options to the Executive Chairman, Mr Mark Caruso. The options were issued in three tranches exercisable at 20 cents each and subject to the following vesting conditions:

(i) 1,666,668 vesting immediately;
(ii) 1,666,666 vesting in 12 months; and
(iii) 1,666,666 vesting in 24 months.

On 7 September 2015, pursuant to his employment contract, the Board approved the issue of 1,000,000 employee options to the CFO, Mr Tony Sheard. The options were issued in three tranches exercisable at 20 cents each and subject to the following vesting conditions:

(i) 333,334 vesting immediately;
(ii) 333,333 vesting on 31 March 2016; and (iii) 333,333 vesting on 31 March 2017.

Set out below are summaries of options granted under the Plan and unexpired at 31 December 2016:

Grant date Expiry date Exercise price Fair Value at grant date	Options at the start of the year Granted during the year Exercised during the year Forfeited during the year Lapsed during the year Balance at the end of the year Vested at the end of the year
27 May 2015 30 May 2018 20 cents 4.90 cents 07 Sept 2015 31 Mar 2018 20 cents 5.40 cents	5,000,000 - - - - 5,000,000 3,333,334 1,000,000 - - - - 1,000,000 666,667
	6,000,000 - - - - 6,000,000 4,000,001

Set out below are summaries of options granted under the Plan and unexpired at 31 December 2015:

Grant date Expiry date Exercise price Fair Value at grant date	Options at the start of the year Granted during the year Exercised during the year Forfeited during the year Lapsed during the year Balance at the end of the year Vested at the end of the year
21 Dec 2012 31 Dec 2015 20 cents 3.35 cents 21 Dec 2012 31 Dec 2015 35 cents 2.23 cents 27 May 2015 30 May 2018 20 cents 4.90 cents 07 Sept 2015 31 Mar 2018 20 cents 5.40 cents	10,000,000 - - - (10,000,000) - - 1,000,000 - - - (1,000,000) - - - 5,000,000 - - - 5,000,000 1,666,668 - 1,000,000 - - - 1,000,000 333,334
	11,000,000 6,000,000 - - (11,000,000) 6,000,000 2,000,002

Fair value of options granted

The assessed fair value at grant date of options during the year ended 31 December 2016 was independently determined using a Black-Scholes 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. The total share based payment expense for the year ended 31 December 2016 was $66,693 (2015: $128,296).

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

7. People (continued)

7.2 Share based payments (continued)

a) Employee Options (continued)

Fair value of options granted (continued)

The model inputs for options granted during the period, as well as prior periods, included:

(a)	Options granted for no consideration with the expectation that the majority of the options would be exercised	Options granted for no consideration with the expectation that the majority of the options would be exercised	Options granted for no consideration with the expectation that the majority of the options would be exercised
	towards the end of the term of the options and there are no market based vesting conditions.
(b)	Exercise price (AUD)	20 cents	20 cents
(c)	Grant date	27 May 2015	7 September 2015
(d)	Risk-free interest rate	2.06%	1.77%
(e)	Exercise date	30 May 2018	31 March 2018
(f)	Share price at grant date (AUD)	11.0 cents	12.5 cents
(g)	Expected price volatility of the shares	90%	60%
(h)	Expected dividend yield	Nil	Nil

The expected price volatility is based on the historic volatility and the general trend in share prices of the companies in similar businesses and trading on the ASX over the past 12 months.

b) Performance Rights

The issue of Performance Rights was approved by shareholders at a general meeting of the Company held on 25 May 2016. The Incentive Performance Rights Plan are designed to provide long-term incentives for senior managers and above (including directors) to deliver long-term shareholder returns. Performance Rights granted under the plan carry no dividend or voting rights. The Performance Rights is exercisable on or before 30 May 2019 and will vest upon the closing Share price reaching $0.20 and remaining at or above $0.20 for a period of 5 consecutive trading days.

Set out below are summaries of all Performance Rights granted under the Plan and unexpired at 30 June 2016:

Grant date Expiry date Exercise price Fair Value at grant date	Options at the start of the year Granted during the year Exercised during the year Forfeited during the year Lapsed during the year Balance at the end of the year
25 May 2016 30 May 2019 20 cents 11.3 cents	- 4,000,000 - - - 4,000,000
	- 4,000,000 - - - 4,000,000

Fair value of Performance Rights granted

The assessed fair value at grant date of the Performance Rights issued during the period ended 31 December 2016 was determined using a trinomial option pricing model that takes into account the exercise price, the term of the Performance Right, 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 Performance Right. The total share based payment expense for the period ended 31 December 2016 was $67,764 (2015: $NIL).

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

7. People (continued)

7.2 Share based payments (continued)

b) Performance Rights (continued)

The model inputs for Performance Rights granted during the period, as well as prior periods, included:

(a)	Performance Rights granted for no consideration with the expectation that the majority of the Performance Rights	Performance Rights granted for no consideration with the expectation that the majority of the Performance Rights
	would be exercised on the Share price reaching $0.20 and remaining at or above $0.20 for a period of 5 consecutive
	trading days.
(b)	Exercise price (AUD)	0 cents
(c)	Share price barrier (AUD)	20 cents
(d)	5 day VWAP of underlying security	13.5 cents
(e)	Grant date	25 May 2016
(f)	Risk-free interest rate	1.62%
(g)	Exercise date	30 May 2019
(h)	Share price at grant date (AUD)	13.5 cents
(i)	Expected price volatility of the shares	60%
(j)	Expected dividend yield	Nil

The expected price volatility is based on the historic volatility and the general trend in share prices of the companies in similar businesses and trading on the ASX over the past 12 months.

7.3 Related party transactions

(i) Parent entity

Transactions between the Company and other entities in the Group during the years ended 31 December 2016 and 31 December 2015 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.

(ii) Key management personnel disclosures

Compensation

The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:

Short-term employee benefits Post-employment benefits Long-term benefits Share-based payments	31 Dec 2016 $ 31 Dec 2015 $
	933,726 1,387,810 43,787 86,808 20,836 53,863 134,458 175,773
	1,132,807 1,704,254

Detailed remuneration disclosures are provided in the remuneration report in the director’s report on page 12.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

7. People (continued)

7.3 Related party transactions (continued)

(iii) Transactions with other related parties

Mine Site Construction Services (“MSCS”), a company associated with Directors Mark Caruso and Joseph Caruso has provided the followings services to the Company during 2016 and 2015:

Provision of office space.
The amount paid by the Company to MSCS for the year ended 31 December 2016 was $90,199 (2015: $47,734). This is considered to be an arm’s length commercial rent. There is a formal sub lease in place.
Provision of secretarial staff to the Executive Chairman.
The amount paid by the Company to MSCS for the year ended 31 December 2016 was $76,329 (2015: $57,784). The amounts payable are pursuant to an Executive Service Agreement and have been reimbursed on an arm’s length basis at normal commercial rates.
Provision of technical staff.
The amount paid by the Company to MSCS for the year ended 31 December 2016 was $210,413 (2015: $299,422). The amounts payable have been in respect to the provision of technical staff at the Groups’ head office and at the Tormin project and have been reimbursed on an arms-length basis at normal commercial rates.
• Others
The amount paid by the Company to MSCS for the year ended 31 December 2016 was $127,799 (2015: $128,259). The amounts payable have been in respect of telecommunication charges and miscellaneous payments made by MSCS on behalf of the Company. The amounts have been reimbursed on an arms-length basis at normal commercial rates.

(iv) Receivable from and payable to related parties

The following balances are outstanding at the reporting date in relation to transactions with related parties:

MSCS (v) Loans to / from related parties	31 Dec 2016 $ 31 Dec 2015 $
	106,049 92,105

On 30 May 2014, the Company obtained an unsecured short term working capital facility of up to $4m from major shareholders. This included a A$2 million facility provided by Regional Management Pty Ltd (“RMS”), a related party of Mark Caruso, the Executive Chairman of the Company.

Pursuant to the Loan Agreement entered into between the Company and RMS, the lender provided a finance facility capped at A$2 million on the following arm’s-length and commercial terms:

Loan is unsecured;
Interest of 13% per annum;
Line fee of 1% and establishment fee of 1%;
Repayment to take in three equal tranches on 31 January 2015, 28 February 2015 and 31 March 2015; and
Default interest of 10% if not repaid on the repayment date.

The loan repayments dates were subsequently extended. As at balance sheet date, the amount owing is $583,044. The loan has been fully repaid immediately subsequent to year end.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

8. Other

This section provides information that is not directly related to the specific line items in the financial statements, including information about contingent assets and liabilities, other commitments, events after the end of the financial year, remuneration of auditors and changes to accounting policies and procedures.

8.1 Contingent assets and contingent liabilities

a) Contingent liabilities

Bank guarantees

FirstRand Bank Limited has issued a Bank Guarantee, in favour of the South African Department of Mineral Resources, in respect of MSR’s obligations under the Tormin Mining Right for an amount of ZAR2,730,000 (USD198,141) (2015: ZAR2,730,000 (USD175,539)).

Subordination of Shareholders Loan

With effect from 26[th] March 2015, MRC Resources Proprietary Limited (“MRCR”) has subordinated ZAR90,000,000 (USD5,790,798) (2015: ZAR90,000,000 (USD5,790,798)) of its inter-company loan account to FirstRand Bank Limited for the due payment by MSR of all monies owed to FirstRand Bank Limited.

Suretyship

With effect from 26[th] March 2015, MRCR has provided a surety to FirstRand Bank Limited of ZAR45,000,000 (USD3,266,055) (2015: ZAR45,000,000 (USD2,895,399)) for the due payment by MSR of all monies owed to FirstRand Bank.

With effect from 15th September 2016, MSR has provided a surety to FirstRand Bank Limited of ZAR4,614,788 (USD334,937) (2015: ZARNil (USDNil)) for the due payment by Z Square M.P Empowerment Company (Proprietary) Ltd of all monies owed to FirstRand Bank.

Others

Other contingent liabilities relate predominantly to actual or potential claims of the Group for which amounts are reasonably estimated but the liability is not probable and therefore the Group has not provided for such amounts in the financial report. This amounted to ZAR5,300,000 (USD384,669) (2015: ZAR Nil (USD Nil)).

Other than those mentioned above, there have been no other changes to contingent assets or liabilities since 31 December 2016.

8.2 Other Commitments

Blue Bantry funding support

The Company, via MRCR, and Blue Bantry are both 50% shareholders in MSR, the entity which owns the Tormin Project.

The Company agreed to provide Blue Bantry access to an amount of funding to support the original Tormin Project objectives by advancing through a loan, certain benefits Blue Bantry would expect to receive from the Tormin Project. Blue Bantry will repay the ZAR8,250,000 loan from dividend distributions that it will receive in the future from MSR.

8.3 Events since the end of the financial year

Other than disclosed in the financial report above, there have been no other material matters arising subsequent to the end of the financial year.

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Notes to the consolidated financial statements (continued)

8. Other (continued)

8.4 Remuneration of auditors

During the year, the following fees were paid or payable for services provided by BDO Audit (WA) Pty Ltd and BDO Tax (WA) Pty Ltd, its related practices and related firms:

Audit services Audit and review of financial reports BDO Audit (WA) Pty Ltd BDO Johannesburg South Africa Non-audit services Taxation and company secretarial (South African entities) BDO Tax (WA) Pty Ltd BDO Johannesburg South Africa	31 Dec 2016 $ 31 Dec 2015 $
	44,020 60,790 23,597 48,588
	67,617 109,378
	71,552 80,366 - 6,964
	71,552 87,330

8.5 Accounting Policies

a) New standards and interpretations not yet adopted

The Group has not elected to apply any pronouncements before their effective date for the annual reporting period ended 31 December 2016.

A number of new standards, amendments to standards and interpretations are effective for annual period beginning on or after 1 January 2017, and have not been applied in preparing these consolidated financial statements. The Group’s assessment of the impact of these new standards, amendments to standards and interpretations is set out below:

Reference	Title	Nature of Change	Application date of standard	Impact on entity financial statements	Application date for entity
AASB 9 (issued December 2014)	Financial Instruments	Amends the requirements for classification and measurement of financial assets. The available-for- sale and held-to-maturity categories of financial assets in AASB 139 have been eliminated. Under AASB 9, there are three categories of financial assets: • Amortised cost • Fair value through profit or loss • Fair value through other comprehensive income. AASB 9 requires that gains or losses on financial liabilities measured at fair value are recognised in profit or loss, except that the effects of changes in the liability’s credit risk are recognised in other comprehensive income.	Annual reporting periods beginning on or after 1 January 2018	Adoption of AASB 9 is only mandatory for the year ending 31 December 2018. The entity has not yet made an assessment of the impact of these amendments. The entity has financial assets classified as available-for-sale. When AASB 9 is first adopted, the entity will reclassify these into the fair value through profit or loss category. On 1 January 2018, the cumulative fair value changes in the available-for- sale reserve will be reclassified into retained earnings and subsequent fair value changes will be recognised in profit or loss. The change is applied retrospectively, however comparatives need not be retrospectivelyrestated.	1 January 2018

Mineral Commodities Ltd

Annual Financial Statements for the year ended 31 December 2016

Reference	Title	Nature of Change	Application date of standard	Impact on entity financial statements	Application date for entity
		Impairment The new impairment model in AASB 9 is now based on an ‘expected loss’ model rather than an ‘incurred loss’ model. A complex three stage model applies to debt instruments at amortised cost or at fair value through other comprehensive income for recognising impairment losses. A simplified impairment model applies to trade receivables and lease receivables with maturities that are less than 12 months. For trade receivables and lease receivables with maturity longer than 12 months, entities have a choice of applying the complex three stage model or the simplified model.		Instead, the cumulative effect of applying the change for the first time will be recognised as an adjustment to the opening balance of retained earnings on 1 January 2018. The entity has both long term and short term trade receivables. When this standard is adopted, the entity’s loss allowance on trade receivable will increase. The change is applied retrospectively, however comparatives need not be retrospectively restated. Instead, the cumulative effect of applying the change for the first time is recognised as an adjustment to the opening balance of retained earnings on 1 January 2018.
AASB15 IFRS 15 (issued June 2014)	Revenue from contracts with customers	An entity will recognise revenue to depict the transfer of promised good or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This means that revenue will be recognised when control of goods or services is transferred, rather than on transfer of risks and rewards as is currently the case under IAS 18 Revenue.	Annual reporting periods beginning on or after 1 January 2018.	The entity operates in the mining industry and recognises revenue for sale of mineral sands per note 2.2. When this standard is first adopted, revenue for sale of mineral sands will instead be recognised when control of goods is transferred. Preliminary assessment indicates no material impact on revenue recognition from the implementation of this standard. Comparatives will need to be retrospectively restated, either back to 1 January 2017 if the full retrospective transitional requirements are applied, or to 1 January 2018 if the modified retrospective transitional requirements are applied. Modified retrospective restatement requires that the cumulative effect of applying AASB 15 for the first time be recognised as an adjustment to the opening balance of retained earnings on 1 January2018.	1 January 2017

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

Mineral Commodities Ltd Annual Financial Statements for the year ended 31 December 2016

Directors’ declaration

The Directors of the Company declare that:

The financial statements, comprising the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, consolidated statement of cash flows, consolidated statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001 including;
(a) complying with Australian Accounting Standards and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(b) give a true and fair view of the consolidated entity’s financial position as at 31 December 2016 and of its performance for the year ended on that date.
The Company has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards.
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.

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:

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Mark Caruso Executive Chairman Dated at Perth, Western Australia this 28[th] day of February 2017

Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR'S REPORT

To the members of Mineral Commodities Ltd

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Mineral Commodities Ltd (the Company) and its subsidiaries (the Group), which comprises the consolidated balance sheet as at 31 December 2016, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration.

In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001 , including:

(i) Giving a true and fair view of the Group’s financial position as at 31 December 2016 and of its financial performance for the year ended on that date; and
(ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

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Carrying value of mine assets

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----- Start of picture text -----

Key audit matter How the matter was addressed in our audit
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For the year ended 31 December 2016 the Group had	Our procedures included, amongst others:	Our procedures included, amongst others:
property, plant and equipment of US$16.1 million (2015: US$11.3 million) and mine development of US$7.66 million (2015: US$7.59 million) as disclosed in Notes 3.3 and 3.2 respectively. Estimation and judgment is used in determining the useful life and	We reviewed and challenged management’s assessment of whether any internal or external indicators of impairment as per_AASB 136 Impairment_ _of Assets_existed including, but not limited to:
amortisation rates for mining assets. The company is	External
also required to assess for indicators of impairment at	•	Comparing of the carrying value of net assets
each reporting period.		to the market capitalisation of the company.
As the carrying value of mine assets represents a	•	Evaluating commodity prices with reference
significant asset of the Group, we considered it		to contractual arrangements, market prices
necessary to assess whether any facts or circumstances		(where available) and historical
exist to suggest that the carrying amount of this asset		performance.
may exceed its recoverable amount. As a result, the
mine assets were required to be assessed for	Internal
impairment indicators in accordance with AASB 136	•	Reviewing and assessing management’s
Impairment of Assets. This required critical analysis of		financial forecast against actual results for
the key estimates and judgements used in the		the year.
assessment of impairment indicators.	•	Comparing the projected forecast to the
		carrying value of assets for the Tormin
		mining project.
	•	Evaluating the impact of the updated
		mineral resource statement.
	•	Considering the impact of mining
		lease renewals.
	We also considered the impact of the updated mineral
	resource	statement against management’s assessment
	of the life of mine and the depreciation and
	amortisation of mining assets.

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Revenue Recognition

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Key audit matter How the matter was addressed in our audit
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For the year ended 31 December 2016 the Group	Our procedures included, amongst others:	Our procedures included, amongst others:
recognised US$26.87 million (2015: US$46.18 million) as disclosed in Note 2.2 of the financial report.	•	We discussed with management and critically assessed the Group’s revenue recognition
Revenue recognition was identified as a key audit		policy including enquiring with management
matter due to the significance of revenue to the		as to any changes to revenue recognition
financial report and the nature of a significant offtake		policies or practice during the year.
arrangement, which includes deferred delivery	•	We obtained and reviewed offtake
arrangements.		arrangements, including any variations and
		critically assessed the key terms against the
		revenue recognition policies adopted by the
		Group.
	•	We analytically reviewed revenue recorded
		during the year by setting expectations
		based upon internal production and survey
		volumes against average contract pricing
		received during the year.
	•	We assessed a sample of revenue
		transactions through comparison to sales
		contracts signed by the customer and bills of
		lading or final analysis certificates.
	•	We evaluated whether revenue had been
		recorded in the correct period based on
		contractual terms for a sample of sales
		around the reporting date.
	•	We evaluated the disclosures for revenue
		and revenue recognition accounting policies.

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Existence and valuation of Inventory

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Key audit matter How the matter was addressed in our audit
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As at 31 December 2016, the carrying value of the	Our procedures included, amongst others:	Our procedures included, amongst others:
Group’s inventory was US$7.997 million (2015: US$2.301 million) as disclosed in Note 4.3 of the financial report.	•	BDO network component auditors attended inventory counts at the Tormin mine site and counted a sample of inventory items and
Inventory was identified as a key audit matter due to		compared the quantities/volumes counted to
the significant increase in the finished goods from the		the quantities/volumes recorded.
prior period, the judgements by management in allocating costs to various products of the mining process and the significant balance of spares and	•	BDO network component auditors observed for potential obsolete or damaged items.
consumables at the mine site.	•	We obtained and reviewed an independent
		survey report of stockpiled finished goods
		and compared to volumes recorded. This
		included critically assessing the competence
		and objectivity of the expert used and the
		adequacy of their work.
	•	We reviewed management’s inventory model
		which allocates mining costs to finished
		product and critically assessed the
		methodology and compared to the
		accounting policy adopted by the Group.
	•	We re-performed the calculation and
		reconciled inputs used in the inventory
		model to survey results, production reports,
		mining costs and sales contracts.
	•	We tested a sample of finished product to
		assess whether they were recorded at a
		value higher than what they could be sold.

Other information

The directors are responsible for the other information. The other information comprises the unaudited information contained in directors’ report for the year ended 31 December 2016, but does not include the financial report and our auditor’s report thereon, which we obtained prior to the date of this auditor’s report, and the annual report, which is expected to be made available to us after that date.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.

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In connection with our audit of the financial report, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors and will request that it is corrected. If it is not corrected, we will seek to have the matter appropriately brought to the attention of users for whom our report is prepared.

Responsibilities of the directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:

http://www.auasb.gov.au/auditors_files/ar2.pdf

This description forms part of our auditor’s report.

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Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 12 to 18 of the directors’ report for the year ended 31 December 2016.

In our opinion, the Remuneration Report of Mineral Commodities Ltd, for the year ended 31 December 2016, complies with section 300A of the Corporations Act 2001 .

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

BDO Audit (WA) Pty Ltd

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Phillip Murdoch

Director

Perth, 28 February 2017

AI assistant

MINERAL COMMODITIES LTD — Annual Report 2017

65371_rns_2017-02-28_87df4511-d2f8-407d-a254-9b4749eadee8.pdf

APPENDIX 4E: PRELIMINARY FINAL REPORT

RESULTS FOR ANNOUNCEMENT TO THE MARKET

PETER TORRE COMPANY SECRETARY

RESULTS FOR ANNOUNCEMENT TO THE MARKET

COMMENTARY ON RESULTS AND OTHER SIGNIFICANT INFORMATION

COMMENTARY

Dividends

NET TANGIBLE ASSET BACKING

AUDIT DETAILS

Mineral Commodities Ltd

Financial Report

31 December 2016

Contents

Corporate directory

Competent Person Statement

Directors’ report

Directors

Principal activities

Dividends

Review of operations

Directors’ report (continued)

Review of operations (continued)

Safety and environment

Community

Xolobeni Mineral Sands Project

Directors’ report (continued)

Review of operations (continued)

Xolobeni Mineral Sands Project (continued)

Tormin - Mining

Tormin - Processing

Tormin - Cash Costs

Directors’ report (continued)

Review of operations (continued)

Tormin - Cash Costs (continued)

Tormin - Sales and Marketing

Directors’ report (continued)

Review of operations (continued)

Tormin - Resources

Tormin - Prospecting Activities

Directors’ report (continued)

Tormin - Prospecting Activities (continued)

Corporate and Financial

Consolidated result and financial position

Outlook

Directors’ report (continued)

Outlook (continued)

Significant changes in the state of affairs

Events since the end of the financial year

Likely developments and expected results of operations

Environmental regulation

Schedule of mining and prospecting tenements

Directors’ report (continued)

Greenhouse gas and energy data reporting requirements

Information on Directors

Experience and expertise

Directors’ report (continued)

Information on Directors (continued)

Other current directorships

Special responsibilities

Directors’ report (continued)

Information on directors (continued)

Directors and key management personnel shareholdings

Meetings of directors

Remuneration report (Audited)

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

Directors’ report (continued)

Remuneration report (Audited) (continued)

Voting and comments made at the Company’s 2016 Annual General Meeting

B. Details of Remuneration

Directors’ report (continued)

Remuneration report (Audited) (continued)

B. Details of Remuneration (continued)

Cash bonus

Directors’ report (continued)

Remuneration report (Audited) (continued)

B. Details of Remuneration (continued)

Relative proportions of fixed vs variable remuneration expense

MINERAL COMMODITIES LTD Annual Report 2017