Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Sign up Log in

MINERAL COMMODITIES LTD Annual Report 2022

Apr 27, 2023

65371_rns_2023-04-27_f6931095-5e5d-45ab-a2d8-9bee0755bd4e.pdf

Annual Report

Open in viewer

Opens in your device viewer

==> picture [160 x 64] intentionally omitted <==

==> picture [57 x 9] intentionally omitted <==

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

ASX: MRC
----- End of picture text -----

==> picture [419 x 113] intentionally omitted <==

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

ASX RELEASE
28 April 2023
----- End of picture text -----

ANNUAL MINERAL RESOURCES AND ORE RESERVES STATEMENT

Heavy Mineral Sands Projects – South Africa

  • At 31 December 2022, MRC’s total Mineral Resources of heavy mineral sands contained a combined estimate of 562 million tonnes at 6.6% THM, containing 37 million tonnes in situ heavy mineral.

  • Updated Tormin Ore Reserve of 60.3 million tonnes[1] at 3.7% VHM[2] (14.7% THM[3] containing 2.21 million tonnes of heavy mineral.

Graphite Projects – Australia and Norway

  • At 31 December 2022, MRC’s total Mineral Resources of graphite contained 9.78 million tonnes at 14.3% Total Graphitic Carbon (“TGC”), containing 1.39 million tonnes of graphite.

  • Total Group Ore Reserves of graphite contained 4.84 million tonnes at 14.3% TGC, containing 0.69 million tonnes of graphite.

Mineral Commodities Ltd (ASX: MRC) (“ the Company ” or “ MRC ”) is pleased to report its annual Mineral Resource and Ore Reserve Estimates as at 31 December 2022 pursuant to ASX Listing Rule 5.20 and 5.21. Summary of total Resource and Reserve estimates are set out below and full details of the Resource/Reserve estimates including JORC Code Table 1, can be found in the attached Annual Report.

Interim Chief Executive Officer Adam Bick commented: “ The 2022 Annual Mineral Resource and Ore Reserve Statement of the Company indicates an excellent portfolio of world-class Mineral Sands and Graphite deposits supporting our growth strategy. Furthermore, the recently announced Updated Ore Reserve for the Tormin Inland Strand, both within and outside the Expanded Mining Right, will underpin the long term profitability of Tormin and significantly enhances the asset value of our Heavy Minerals division.”

1 Refer ASX Announcement entitled ‘Significant Ore Reserve Increase for Tormin Inland Strands’ dated 5 April 2023. 2 VHM includes all currently sold minerals (zircon, rutile, ilmenite, magnetite, and garnet) that report as sink during heavy liquid separation at SG of 2.96 (bromoform) after desliming, within the 45 µm to 1mm size fraction as a percentage of the total material. 3 THM includes all minerals that report as sink during heavy liquid separation at SG of 2.96 (bromoform) after desliming, within the 45 micron to 1mm size fraction as a percentage of the total material.

T: +61 8 6373 8900 PO Box 91 BELMONT WA 6984

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 1

ASX: MRC ASX: MRC

28 April 2023

Group Mineral Resources

==> picture [121 x 112] intentionally omitted <==

As at 31 December 2022, Group Mineral Resources included:

  • 562 million tonnes at 6.6% THM including 37 million tonnes of in situ heavy mineral across its Tormin Mineral Sands Operation and Xolobeni Mineral Sands Project.

  • 9.78 million tonnes at 14.3% TGC and contained 1.39 million tonnes of graphite across its Munglinup Graphite Project and Skaland Graphite Operation.

There has been no material movement of heavy mineral resources compared with the estimate at the same time last year. Graphite resources have decreased by 0.01 million tonnes compared with the estimate at the same time last year due to depletion at the Skaland Graphite Operation. Mineral Resources are reported inclusive of Ore Reserves. The Group Mineral Resources estimates for the FY 2022 are set out in Tables 1 and 2.

Table 1 - Total Mineral Resources of Heavy Mineral Sand at 31 December 2022

Project Category Resource
(Mt)		 THM
(%)		 In Situ
THM(Mt)		 Zircon
(%HM)		 Garnet
(%HM)		 Ilmenite
(%HM)		 Rutile
(%HM)		 Anatase
(%HM)		 Magnetite
(%HM)
Tormin
Beaches		 Indicated 1.86 10.3 0.19 2.5 43.1 5.4 1.3 0.1 0.6
Inferred 0.19 10.1 0.02 2.3 48.9 5.0 1.2 0.1 0.7
Total 2.05 10.3 0.21 2.5 43.6 5.4 1.3 0.1 0.7
Northern
Beaches		 Indicated 1.49 17.2 0.26 2.6 49.6 6.8 1.3 0.1 0.6
Inferred 0.23 6.9 0.02 2.2 41.7 4.5 1.3 0.0 0.8
Total 1.72 15.8 0.27 2.6 48.6 6.5 1.3 0.1 0.6
Western
Strandline		 Measured 32.7 19.21 6.2 1.82 12.49 7.91 1.09 0.21 0.52
Indicated 39.7 9.48 3.7 1.05 14.77 3.80 0.84 0.21 0.74
Inferred 119.2 6.93 8.2 2.60 10.68 18.04 1.44 0.29 0.43
Stockpile 1.6 12.84 0.2 4.21 18.85 25.78 1.95 0.39 0.78
Total 193.2 9.58 18.5 2.16 11.89 13.46 1.26 0.25 0.51
Eastern
Strandline		 Indicated 1.9 5.34 0.1 6.12 15.71 35.44 7.73 0.92 0.89
Inferred 17.5 3.13 0.5 6.35 14.39 36.74 6.09 1.19 0.51
Total 19.5 3.36 0.6 6.32 14.52 36.60 6.25 1.16 0.57
Xolobeni Measured 224 5.7 12.76 54.5
Indicated 104 4.1 4.26 53.7
Inferred 18 2.3 0.41 69.4
Total 346.0 5.0 17.3 54
Grand Total 562.0 6.6 37 39

  • Mineral assemblage reported as in situ percentage of THM content.

  • Tonnes and grades numbers may not compute due to rounding.

  • 2% THM cut-off grade used for Tormin Beaches, Northern Beaches and Western and Eastern Strandline.

  • 1% THM cut-off grade used for Xolobeni.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 2

ASX: MRC ASX: MRC

28 April 2023

Table 2 - Total Mineral Resources of Graphite at 31 December 2022

==> picture [121 x 112] intentionally omitted <==

Project Category Resource
(Mt)		 Total Graphitic
Carbon (%)		 Contained
Graphite (Mt)
Munglinup Indicated 4.49 13.1 0.58
Inferred 3.50 11.0 0.38
Total 7.99 12.2 0.97
Skaland Measured 0.06 30.2 0.02
Indicated 0.68 25.2 0.17
Inferred 1.05 22.0 0.23
Total 1.79 23.5 0.42
Grand Total 9.78 14.3 1.39

  • Tonnes and grade numbers may not compute due to rounding.

  • 10% TGC cut-off grade used for Skaland.

  • 5% TGC cut-off grade used for Munglinup.

Group Ore Reserves

As at 31 December 2022, Group Ore Reserves included:

  • 60.3 million tonnes at 3.7% VHM (14.7% THM) containing 2.21 million tonnes of heavy mineral at the Tormin Western Strandline[1] .

  • 4.84 million tonnes at 14.3% TGC and contained 0.69 million tonnes of graphite across its Munglinup Graphite Project and Skaland Graphite Operation.

This represents an increase of approximately 0.65 million tonnes of heavy mineral reserves and a reduction of 0.04 million tonnes of graphite reserves compared with the estimate at the same time last year. The reduction in graphite reserves is due to mining depletion. The Group Ore Reserves estimates for the FY 2022 are set out in Tables 3 and 4.

Table 3 - Total Ore Reserves of Heavy Mineral Sands at 31 December 2022

Project Category Reserve
(Mt)		 Total VHM (%) Contained VHM
(Mt)
Western
Strandline		 Proven 21.5 5.4 1.17
Probable 38.8 2.7 1.05
Total 60.3 3.7 2.21
Grand Total 60.3 3.7 2.21

  • Tonnes and grade numbers may not compute due to rounding.

  • The economic cut-off is defined as positive cash flow grade per tonne.

  • Ore Reserves are a sub-set of Mineral Resources.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 3

ASX: MRC ASX: MRC

28 April 2023

Table 4 - Total Ore Reserves of Graphite at 31 December 2022

==> picture [121 x 112] intentionally omitted <==

Project Category Reserves
(Mt)		 Total Graphitic
Carbon (%)		 Contained
Graphite (Mt)
Munglinup Proven
Probable 4.24 12.8 0.54
Total 4.24 12.8 0.54
Skaland Proven 0.05 27.8 0.01
Probable 0.55 24.6 0.14
Total 0.60 24.8 0.15
Grand Total 4.84 14.3 0.69

  • Tonnes and grade numbers may not compute due to rounding.

  • Ore Reserve uses a variable cut-off grade.

  • Ore Reserves are a sub-set of Mineral Resources.

Refer to appendix of this release for the explanatory note for the annual updates of Mineral Resources and Ore Reserves.

ENDS

Issued by Mineral Commodities Ltd ACN 008 478 653 www.mineralcommodities.com Authorised by the Interim Chief Executive Officer and Company Secretary, Mineral Commodities Ltd

For further information, please contact:

INVESTORS & MEDIA Adam Bick Interim Chief Executive Officer T: +61 8 8 6373 8900 [email protected]

CORPORATE Katherine Garvey Company Secretary T: +61 8 6373 8900 [email protected]

About Mineral Commodities Ltd

Mineral Commodities Ltd is a global mining and development company with a primary focus on the production of high-grade Mineral Sands and Natural Flake Graphite from operations in South Africa and Norway.

The Company is a leading producer of zircon, rutile, garnet, magnetite, and ilmenite concentrates through its Tormin Mineral Sands Operation, located on the Western Cape of South Africa.

The Company owns and operates the Skaland Graphite Operation in Norway, the world’s highest-grade operating flake graphite mine and is the only producer in Europe. The planned development of the Munglinup Graphite Project, located in Western Australia,

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 4

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==

builds on the Skaland acquisition and is a further step toward an integrated, downstream value-adding strategy which aims to capitalise on the fast-growing demand for sustainably manufactured lithium-ion batteries.

In April 2022, the Company released its Five-Year Strategic Plan 2022-2026[4] to delineate and implement its aspiration to become a leading vertically integrated diversified producer of graphitic anode materials and value added mineral products with a commitment to operate with a focus on the Environment, Sustainability and Governance.

Cautionary Statement

This announcement contains forward-looking statements. Any forward-looking statements reflect management’s current beliefs based on information currently available to management and are based on what management believes to be reasonable assumptions. It should be noted that various factors may cause actual results or expectations to differ materially from the results expressed or implied in the forward-looking statements.

These forward-looking statements are not a guarantee of future performance and involve unknown risks and uncertainties, many of which are beyond MRC’s control. This may cause actual results and developments to differ materially from those expressed or implied. These risks include but are not limited to, economic conditions, stock market fluctuations, commodity demand and price movements, access to infrastructure, timing of approvals, regulatory risks, operational risks, reliance on key personnel, Ore Reserve and Mineral Resource estimates, native title, foreign currency fluctuations, exploration risks, mining development, construction, and commissioning risk.

Forward-looking statements in this announcement apply only at the date of issue and are subject to any continuing obligations under applicable law or regulations, MRC does not undertake to publicly update or revise any of the forward-looking statements in this announcement or to advise of any change in events, conditions, or circumstances on which any such statement is based. Readers are cautioned not to place undue reliance on any forward-looking statements contained in this announcement.

Mineral Resource and Ore Reserve Governance

Mineral Resources and where applicable, Ore Reserves, are estimated by suitably qualified persons in accordance with the JORC Code and the ASX Listing Rules, using industry standard techniques. Mineral Resource estimates and supporting documentation are reviewed by external Competent Persons. Any amendments to the Mineral Resources and Ore Reserves Statement to be included in the Annual Report are reviewed by suitably qualified Competent Persons.

4 Refer ASX Announcement entitled ‘MRC Unveils Five Year Strategic Plan 2022-2026’ dated 29 April 2022.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 5

ASX: MRC ASX: MRC

28 April 2023

==> picture [121 x 112] intentionally omitted <==

Competent Person’s Statement

The Annual Mineral Resources and Ore Reserve Statement and Explanatory Notes have been compiled by Mr. Daniel Hastings, who is a member of the Australian Institute of Mining and Metallurgy (“AusIMM”) and the Australian Institute of Geoscientists (“AIG”). Mr. Hastings is a full-time employee of Quantified Strategies Pty Ltd. He has sufficient experience which is relevant to the style of mineralisation and types of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person in accordance with the JORC Code (2012). Mr. Hastings consents to inclusion in the report of the matters based on this information in the form and context in which it appears.

Table 5 is a listing of the names of the Competent Persons (as defined by the JORC Code 2012) who are taking responsibility for reporting results and estimates. This Competent Person listing includes details of professional memberships, professional roles, and the reporting activities for which each person is accepting responsibility for the accuracy and veracity of MRC’s estimates. Individual Competent Persons Statements can be found in

the various appropriate ASX releases concerning each Mineral Resource and Ore Reserve. For completeness, JORC, Table 1 for each updated Mineral Resource and Ore Reserve reported in this release have been attached in the appendix.

Table 5 – Listing of Competent Persons and Responsibilities

Activity Competent
**Person **		 Professional
**Affiliation **		 MRC Relationship Activity Responsible
Mineral
Resources		 Allen Maynard MAusIMM /
MAIG		 Principal Al Maynard &
Associates		 Xolobeni HMS
Daniel Hastings MAusIMM /
MAIG		 Principal Quantified
Strategies		 Skaland Graphite
Chris De-Vitry MAusIMM Principal Manna Hill
GeoConsulting		 Tormin and Northern
Beaches, Inland Strands
HMS,Munglinup Graphite
Ore
Reserves		 Eero Tommila MIMMM Principal Mining
Engineer – Skaland
GraphiteAS		 Skaland Graphite
Daniel Hastings MAusIMM /
MAIG		 Principal Quantified
Strategies		 Munglinup Graphite, Inland
StrandHMS

  • MAusIMM = Member of Australasian Institute of Mining and Metallurgy and MAIG = Member of Australian Institute of Geoscientists

  • MIMMM = Member of the Institute of Materials, Minerals, and Mining, a Recognised Professional Organisation (RPO).

  • Information in this report that relates to Mineral Resources or Ore Reserves is based on the information compiled by the relevant Competent Persons listed.

The information in this report that relates to Mineral Resources and Ore Reserves is based on information compiled by the Competent Persons named in the table above. All Competent Persons have sufficient experience which is relevant to the style of mineralisation and types of deposit under consideration and to the activity which they are is undertaking to qualify as a Competent Person in accordance with the JORC Code (2012). Each Competent Person consents to inclusion in the report of the matters based on this information in the form and context in which it appears.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 6

==> picture [419 x 113] intentionally omitted <==

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

ASX RELEASE
28 April 2023
----- End of picture text -----

==> picture [160 x 64] intentionally omitted <==

==> picture [595 x 30] intentionally omitted <==

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

ASX: MRC 28 April 2023
----- End of picture text -----

THE 2022 ANNUAL REPORT OF THE MINERAL RESOURCES AND ORE RESERVES STATEMENT

Overview

Mineral Commodities Ltd (ASX: MRC) (" the Company " or " MRC ") is a diversified mining group executing two complementary business strategies focused on the production of heavy mineral sands and natural flake graphite concentrates from two high grade mines and one shovel ready development project. In addition, the Company intends to construct an Active Anode Material Plant (“AAMP”) in Norway to become a vertically integrated producer of natural graphite battery anode material to capitalise on the fast-growing demand for sustainably manufactured lithium-ion batteries.

==> picture [452 x 223] intentionally omitted <==

Figure 1 – Location of MRC’s Global Operations and Projects

Mineral Sands

MRC and its empowerment partner, Blue Bantry Investments 255 (Pty) Ltd, operate the Tormin Mineral Sands Operation in the Western Cape province of South Africa which is held by the Company's 50% owned South African subsidiary, Mineral Sands Resources (Pty) Ltd ( MSR ). MRC intends to increase its ownership interest in MSR from 50% to 69%[5] . Tormin supplies circa 25% of the world's demand for garnet sands and is one of the top

5 Refer ASX Announcement entitled ‘MRC to Increase Ownership Interest in Tormin’ dated 12 April 2023.

T: +61 8 6373 8900 PO Box 91 BELMONT WA 6984

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 7

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==

ten independent zircon and titanium feedstock suppliers. MRC is expanding mining and processing operations at Tormin under the Expanded Amended Mining Right (“162&163 EMR”).

The objective of MRC's mineral sands strategy is to adopt a phased development program from the Inland Strand and Beach deposits to improve flexibility, optionality, and revenue capacity from Tormin.

==> picture [450 x 299] intentionally omitted <==

Figure 2 – Location of MRC’s Mineral Sands Operations and Projects

Tormin Mineral Sands

Situated approximately 360 kilometres north of Cape Town on the west coast of South Africa and owned by the Company's 50% owned South African subsidiary, MSR.

Tormin is a high-grade placer beach mineral sands deposit hosting naturally occurring zircon, ilmenite, rutile, magnetite, and garnet. As an active placer beach deposit, Tormin is unique due to the rate that mining areas are naturally replenished by storm and oceanic wave action and the speed that the mineralisation actively replenishes. The nature of the resource replenishment is typical of modern-day beach placer deposits found along the West Coast of South Africa and India's South-eastern Tamil Nadu coast.

The Company first commenced commercial mining at Tormin in 2014 over a 12 kilometre zone of beach area ("Tormin Beaches") directly in front of the existing processing

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 8

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==

infrastructure. Mining rights to the Tormin Beaches were renewed in 2019, and the permits allow the Company to continue mining operations for a further 10 years, until 2029.

==> picture [452 x 322] intentionally omitted <==

Figure 3 – Geographical location of the Company's tenements in the Western Cape province of South Africa

Since operations commenced at Tormin beaches, the Group has mined over six times the 2013 initial Indicated Resource of 2.7 million tonnes at an average head grade of 30% THM over the life of mining. Mining has now been ongoing for nine years and as at 31 December 2022, a total of 17 million tonnes of material has been processed. The tonnage processed is more than the declared resource tonnage which is indicative of the replenishing nature of the resource replenishment function of the placer style beach deposit - where resource blocks are mined more than once.

In December 2022, resource drilling was completed at the Tormin Beaches for the annual resource update. A total of 378 holes (960m) were drilled in all mining ramps on a nominal 50m x 20m grid to sample the mineral resource. Total Mineral Resource for the Tormin Beaches is estimated at 2.05 million tonnes at 10.3% THM in the Indicated and Inferred categories using a 2% cut-off (Table 1). The Tormin Beaches Mineral Resource estimate JORC Table 1 is in Appendix 1 per the JORC Code (2012).

The Northern Beaches incorporate ten beaches directly north of and adjoining the Tormin Beaches. The areas unite semi-continuous tenements approximately 23.5 kilometres in length, covering an area of 398 hectares of beach sands prospective for zircon, rutile,

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 9

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==

ilmenite, garnet, and magnetite. Like the Tormin Beaches, this deposit is located on an active placer beach undergoing continuous replenishment from oceanic storm and wave activity. The heavy minerals in the beach are constantly replenished by the transport of new sediment from deeper waters, much of which has been derived from the erosion of deposits accumulated in the elevated historic beach terraces onto the present beach.

==> picture [452 x 268] intentionally omitted <==

Figure 4 – Overview of mining operation and primary concentrator at beach 10 of the Northern Beaches

For the annual mineral resource report, a total of 235 holes (557m) were drilled at beaches 1, 2, 4, 5, 7, 9 and 10 on a nominal 50m x 20m grid. Total Mineral Resource for the Northern Beaches is estimated at 1.72 million tonnes at 15.8% THM in the category of Indicated and Inferred using a 2% cut-off (Table 1). The Northern Beaches Mineral Resource estimate JORC Table 1 is in Appendix 2 per the JORC Code (2012).

The Inland Strand mining areas granted under the Expanded Mining Right (162&163 EMR) in mid-2020 include two areas approximately 5.6 kilometres in total length, covering 75 hectares of high-grade mineralisation adjacent to the existing mining operations on the Company owned farm, Geelwal Karoo 262. The Inland Strand Mining Right areas are part of the Inland Strand Prospecting Right 10262, which incorporates an area approximately 12 kilometres in length, covering 1,741 hectares.

The JORC Mineral Resource of Western Strandline was estimated in December 2021 at 193.2 million tonnes at 9.5% THM for 18.5 Mt of contained Heavy Mineral using a 2% cut-

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 10

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==

off[6] . No material change to the Mineral Resource was made during the year and the same Mineral Resource was reported on December 2022 (Table 1).

Mining commenced in the Western Strandline in September 2020 with 1.6Mt mined from the Southern pit and stockpiled by the end of 2021 but not processed. This material was depleted from the mineral resources and reported as a stockpile. No additional mining was undertaken in 2022 of the Western Strandline.

==> picture [452 x 111] intentionally omitted <==

Figure 5 – Mining carried out in the Southern Pit of Western Strandline

Moreover, a maiden Mineral Resource of Eastern Strandline is estimated at 19.5 million tonnes at 3.3% THM in the categories of Indicated and Inferred using a 2% THM cut-off grade. This maiden Mineral Resource (Table 1) demonstrates the prospectivity of the inland strandline areas and underscores the Company’s strategy of growing the resources for mineral processing expansion.

The Inland Strands deposit presents a significant mineral sands asset for the Company which offers material extension of mine life. The opportunity to develop and mine the Western Strandline is an important turning point for the Company in realising the value of the world-class Tormin Mineral Sands Operation.

The Company cumulatively holds a continuous inland prospecting tenure granted, and/or under application, of approximately 41.4km in length and covering approximately 6,634 hectares. Two Prospecting Rights under application, both adjoining PR10262 on the Company owned farm, Geelwal Karoo 262 are highly prospective for the continuation of Western and Eastern Strandlines:

  • De Punt (PR10240), which adjoins immediately to the south and covers an area of approximately 4,495 hectares. In November 2021, MSR received confirmation that the appeal against granting of an Integrated Environmental Authorisation (“IEA”) was dismissed; and

  • Klipvley Karoo (PR10348), immediately to the north, covers an area approximately 16km in length and 3,970 hectares.

6 Refer ASX Announcement entitled ‘Significant Increase in Tormin's Mineral Resources’ dated 7 December 2021.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 11

ASX: MRC ASX: MRC

28 April 2023

==> picture [121 x 112] intentionally omitted <==

Xolobeni Mineral Sands

The Xolobeni Mineral Sands Project is located in the Eastern Cape province of South Africa, approximately 300km north of East London and 200km south of Durban. Mineral resource is estimated at 346 million tonnes at 5% THM, with 54% ilmenite in THM[7] . The Xolobeni project is currently subject to a Department of Mineral Resources ("DMR") mandated moratorium in South Africa. Any potential development timetable is unknown and subject to the outcome of this moratorium. No exploration or production activity has been carried out at Xolobeni during the year and mineral resource remain consistent with that reported for the period ending 31 December 2020.

Graphite

MRC is investing in a vertically integrated downstream value adding strategy targeting the production of low CO2 emission, environmentally friendly anode material from both Skaland and Munglinup natural flake concentrates. The Company is targeting the development of anode production from a dedicated Active Anode Materials Plant ("AAMP") in Norway.

Skaland Graphite Operation

Skaland is the largest flake graphite producer in Europe and the fourth-largest producer globally outside of China. Skaland is presently one of the world's highest-grade operating flake graphite mines with mill feed grade averaging around 24% Carbon. Skaland accounts for around 2% of global annual natural flake graphite production. The operation is held by Skaland Graphite AS, in which the Company holds a 90% interest.

In November 2021, an updated Mineral Resources Estimate and the first JORC compliant Ore Reserve Statement at Trælen was reported[8] . The Updated Mineral Resource of 1.84 million tonnes at 23.6% TGC in the Measured, Indicated, and Inferred categories for 434 kt of contained graphite using a 10% cut-off. Only depletion has been accounted for in the December 2022 Mineral Resource (Table 2).

A Maiden Ore Reserve was also reported in November 2021 and was estimated at 0.64 million tonnes at 24.8% TGC in the category of proven and probable containing 159 kt of contained graphite by using 10% TGC cut-off grade (Table 4).

In 2021 a mining contractor was engaged for the down-dip development at Trælen to access downdip ore at Trælen beneath the already mined out up-dip resources of the deposit. The decline will also provide a platform for additional drilling in 2023 to convert deeper inferred resources and target expansion of the resource base.

The Life of Mine (“LOM”) planning has identified 640kt of ore down-dip between +5m and 115m, with additional resources in and above the current workings and below -115m. The

7 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

8 Refer ASX Announcement entitled ‘Trælen Maiden Ore Reserve’ dated 16 November 2021.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 12

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==

Mine planning provides 13 years of mining at a 10ktpa concentrate production rate. The Trælen graphite deposit is open at depth and plausible side lenses exist to support further expansion. It is noteworthy that the operations at 10ktpa have been considered as a base case and the Company is evaluating an increase of the production capacity to 16ktpa by mid 2023.

==> picture [452 x 266] intentionally omitted <==

Figure 6 – Long section of underground development design, existing development, and mine (grey) and underdevelopment/ planned mine (red)

Munglinup Graphite

The Munglinup Graphite Project is located 105km west of Esperance along South Coast Highway and 85km from Ravensthorpe. MRC's wholly owned subsidiary, MRC Graphite Pty Ltd ( MRCG ), entered into a joint venture agreement with Gold Terrace Pty Ltd ( Gold Terrace ), to farm-in to the Munglinup Graphite Project with an initial 51% interest in the Project.

The Definitive Feasibility Study ( DFS ) of the project and Ore Reserve estimation was completed in January 2020[9] . A Mineral Resource of 7.99 million tonnes at 12.2% TGC in the category of Indicated and Inferred using a 5% cut-off was reported (Table 2) and Ore Reserves were estimated at 4.24Mt @ 12.8% TGC (Table 4).

The Mineral Resource and Ore Reserve of Munglinup remain unchanged since 2020.

The project is on a mining lease granted to 2031 and within a gazetted mining reserve. The Munglinup LOM exceeds 14 years, based on LOM processing throughput of approximately

9 Refer ASX Announcement entitled ‘Robust Munglinup DFS Results Allow MRC to Move to 90% Ownership’ dated 8 January 2020.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 13

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==

450kt per annum, producing an average graphite concentrate production of 52kt per annum. The environmental permits are the only remaining approvals required before commissioning the Project.

Appendix 1 – Tormin Mineral Resources

A summary of annual mineral resource and ore reserve and JORC Table 1 is provided below for the Tormin Beaches, Northern Beaches, Western Strandline and Eastern Strandline.

Beach Geology and Geological Interpretation

The Tormin and Northern Beaches deposits are located on the western coastal plain of South Africa. It is a heavy mineral sand deposit located on an active placer beach strandline undergoing continuous erosion, deposition and replenishment from oceanic storm and wave activity. The Western and Eastern Strandlines are older palaeo-beach deposits located inland from the beach deposits. The western coastal plain of South Africa embraces a significant resource of detrital heavy minerals by world standards.

The heavy mineral sand deposits occur in an active beach environment as well as in older palaeo-beach raised strandlines. Being a placer beach sand deposits, there is no geological structure either relevant or applicable. The Neogene deposits are host to the commercially important diamondiferous and valuable heavy mineral sands (“HMS”) including zircon, rutile, anatase, ilmenite, garnet, and magnetite.

Criteria Used for Classification

Mineral Resources

This spacing and the available data are sufficient for Indicated resources. 2D polylines were drawn around all the 50m x 20m drilling extending about half the drill spacing outside the drilled area and classified this as Indicated. Everything outside these polygon’s were classified as Inferred even when extrapolation distances are occasionally up to several hundred meters. The sand has been visually identified as potentially minable (grade dependant) by the geological staff.

Ore Reserves

Measured and Indicated Mineral Resources were used to form the basis of the Ore Reserve Estimate in accordance with the JORC Code 2012. All the Mineral Resources intersected by the open pit mine design, are contained within the EMR and all Measured Resources were classed as Proved Ore Reserves. Measured Resources outside of the EMR and the Indicated portion of the Mineral Resources were classed as Probable Ore Reserve after considering mining, metallurgical, social, environmental, and financial aspects of the project.

There are no Inferred Resources included in the Ore Reserve statement.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 14

ASX: MRC ASX: MRC

28 April 2023

==> picture [121 x 112] intentionally omitted <==

Drilling Techniques and Hole Spacing

Drilling on the beaches is via auger holes up to 4m deep. Samples are mostly 1m long (first drill rod with the drill bit is 2.5m long and subsequent rods are 2m in length) however, 0.5m long samples occasionally occur. The target drilling pattern is 20m across strike and 50m along strike. Typically, there are two to four holes drilled across strike. Generally, THM content is lower towards the beach and increases landwards. The drilling program was designed on a 50m x 20m grid to delineate a JORC Code (2012) Mineral Resource Estimate for the Tormin and Northern Beaches.

A total of 613 vertical drillholes (1,517m) spaced out on a regular 50m x 20m grid were drilled by a hydraulic auger over the Tormin and Northern beaches. The auger drill rods were 90mm in diameter and 2m long.

Sampling and Sub-sampling Techniques

For the beach samples, generally being wet/moist, are dried at the laboratory then screened at +2mm. A sample split is taken from an 8 way rotary splitter. Homogenisation also occurs during this splitting stage. Lab duplicate samples are split for the Tormin mine laboratory QA/QC checks. Control samples in the form of internal reference standards are run daily.

Inland strand samples are taken over 1m down the hole intervals as determined by 1m marks on the rig mast. Drill samples were riffle split into approximately 3kg samples to be assayed. All samples were dry. Field duplicate samples were riffled for the Tormin mine laboratory and external QA/QC checks for every 25th sample. Lab duplicate samples were split for the Tormin mine laboratory and for external QA/QC checks.

Sample Analysis Method

All samples were analysed at the Company’s onsite HLS lab using TBE with Panalytical Aeris XRD machines (the Rietveld method after HLS) in an automated mode setup for mineral assays, and industrial laboratory XRF (Panalytical Epsilon 3 ED) for zircon content. The Company completes its own internal QA/QC using certified reference material and blank samples at the rate of approximately 1 in 50 samples and sends every 20th sample to third party external laboratories. QEMSCAN test work by SGS was used for determination of the heavy mineral assemblage.

Estimation Methodology – Inland Strands

The Mineral Resource estimation involved the use of drillhole and geology/topography to construct three-dimensional wireframes to define mineralised domains using Micromine software. Domains were snapped to the nearest true intersection from sampling. Data was extrapolated between data points and approximately half of the drill spacing beyond. Ordinary kriging was used as the primary estimator for the THM and Valuable Heavy Minerals values. A block size of 50x12.5x1m reflects the geometry of the mineralised domains and drillhole

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 15

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==

spacing. Then a measured Bulk Density for each lithology layer was applied to the model. Areas with drilling spaced at 125x25m were generally classified as Measured Resources and 250x20m were generally classified as Indicated Resources. Drilling up to 500x100m has been generally classified as Inferred Resources.

The Micromine block model was sub-blocked to 4x4x1m to aid the selection of blocks within this perimeter for the Ore Reserve estimation. Whittle 4X, MinePlan and COMET software were used for pit optimisation and mine planning. A practical mining void shape with consideration of geotechnical parameters for floor and pit slopes, processing recoveries, and economics was developed for the selected pit shells using a revenue factor of 1, and a new block model generated with ore and waste flagged accordingly. This block model was divided into stages based on value for use in schedule optimisation. No minimum mining widths were used as the geometry of the deposit is tabular. Due to the cashflow grades of the deposit showing a cashflow positive mineralised halo around the high grade areas and bedrock being a definable boundary for mineralisation that is able to be mined to, mining recovery has been incorporated into schedule through block / bench aggregation.

Mineral Resources Cut-off grade

A 2% THM cut-off grade is based on the economic criteria established by the ongoing mining operations, and it was applied to any mineralised exploration intersections and final resource reporting, as this is the current minimum grade where there is a reasonable expectation for eventual extraction. The 2% cut-off grade is based on grade-tonnage curves with respect to THM and VHM.

The Mineral Resource is reported to a 2% THM cut-off grade in accordance with JORC Code 2012. This updated Ore Reserve is based on a value model that assigns mining and processing recoveries, costs, and revenue to the geological model. This value model follows the entire mining process from soil stripping to final rehabilitation. An economic optimisation is applied to determine the cashflow grade of each block to every destination. Material is then characterised as being either cashflow positive or cashflow negative. Material is designated as ore where the cashflow grade ($/t) is positive.

Mining Method and Mining Assumptions

Typical open-pit mining is undertaken utilising excavators and articulated dump trucks. The pits generally only remain open during low tide, except where beach conditions allow the construction of protective bunding. There is no stripping as mining starts at the surface and natural replenishment of the resource takes place as the open pits fill with HMS material generated from tidal action and wave energy dynamics. Metallurgical factors are derived from the processing data generated from seven years of profitable mining at Tormin Beaches. As the mine is an ongoing profitable concern, there are no doubts about the metallurgical suitability of the mined material.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 16

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==

The thickness and continuous nature of the mineralisation at the Western Strandline supports conventional open-pit mining with excavators and articulated dump trucks. The Company believes there are no mining factors that affect the assumption that the deposit has reasonable prospects for economic mining.

Pit shells were developed with Whittle 4X using pseudoflow and a variable cashflow cut-off grade estimated in the block model. The optimisation shells selected comprised open pits, initially targeting the higher value areas earlier in the mining plan. The initial Western Strandline pits have been optimised on the Measured and Indicated material in the south and north pits within the Expanded Mining Rights area. These initial pits have not changed from the previous mine plan due to currently being constrained by the Extended Mining Rights.

Firstly, topsoil is removed using a dozer. The topsoil stockpiles will not exceed two metres in height and will be seeded with a cover crop to stabilise them and to avoid airborne dust and material loss given mineralisation occurs near the surface. Excavators and trucks will be used for initial limited overburden stripping where required to open mining zones and in areas where voids for tailings storage need to be established in advance. Once suitable tailings areas are available, the exposed ore will primarily use a D9 dozer or equivalent to push material to a loading area for excavators and trucks to haul to the ROM and stockpiles.

Ore hauled from the mining pit is stockpiled for subsequent processing. A front end loader feeds stockpiled ore to the Primary Concentration Circuit ( PCP ). Oversize material is removed from the ore feed by a scrubber trommel circuit and then fed to a crusher before re-joining the circuit.

The mining schedule is based on Measured and Indicated Mineral Resources with detailed mine designs and mining fleet requirements determined by qualified engineers and mining contractors. The results from geotechnical and hydrogeological studies carried out at the Tormin Inland Strands (including drilling, logging, in-pit slope stability analysis, in situ permeability testing and laboratory test works, also 2D resistivity survey and water boreholes monitoring) have been included in the Western Strandline mine design.

The rehabilitation management plan and standard operating procedures have been prepared and will be implemented as required. Backfilled tailings will be profiled to mimic original topography prior to the replacement of topsoil for rehabilitation and reseeding.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 17

ASX: MRC ASX: MRC

28 April 2023

JORC TABLE 1 Tormin Beaches Section 1 Sampling Techniques and Data

==> picture [121 x 112] intentionally omitted <==

(Criteria in this section apply to all succeeding sections)

Criteria JORC Code Explanation Commentary
Sampling
techniques		 Nature and quality of sampling (eg
cut channels, random chips, or
specific specialised industry standard
measurement tools appropriate to
the minerals under investigation,
such as down hole gamma sondes,
or handheld XRF instruments, etc).
These examples should not be taken
as limiting the broad meaning of
sampling.
Include reference to measures taken
to ensure sample representivity and
the appropriate calibration of any
measurement tools or systems used.
Aspects of the determination of
mineralisation that are Material to the
Public Report. In cases where
‘industry standard’ work has been
done this would be relatively simple
(eg ‘reverse circulation drilling was
used to obtain 1m samples from
which 3kg was pulverised to produce
a 30g charge for fire assay’). In other
cases, more explanation may be
required, such as where there is
coarse gold that has inherent
sampling problems. Unusual
commodities or mineralisation types
(eg submarine nodules) may warrant
disclosure of detailed information.		 • The current resource is based on 378 auger holes,
representing 960m of vertical drilling.
• Holes are 1-4m deep with samples taken from
surface to end of hole. The end of hole is generally
1) Bedrock which is normally a clayey schist, 2)
White pebbly and clayey sand locally called a
channel clay unit or 3) Poorly mineralised gravelly
sand which is mined by diamond mining contractors.
Up to 20cm of the above material (points 1 to 3) are
included as dilution. Occasionally a hole is stopped
early due to e.g., intersecting a boulder.
• Samples are mostly 1m in length (about 6.6 kg) with
the occasional 0.5m sample.
• For sampling a plastic tarpaulin is laid on the ground
to collect the sample and the sample is removed
from the auger which is brushed clean
• The whole sample is bagged, closed with cable tie,
and sent to the Tormin laboratory. The sample
cannot be split at the rig because it generally
contains high moisture content.
• At the laboratory samples are oven-dried whole,
screened (2mm) and split for assaying. There are no
slimes in the beach sand.
• 200g of sample is split (8 way rotary splitter) to use
for heavy liquid separation (HLS) using Bromoform
with density range between 2.92 and 2.96g/ml to
define total heavy mineral (THM) content.
• Mineralisation and grade test work are completed
according to mine standards within Tormin mine site
laboratory. XRF,HLS and XRD.
Drilling
techniques		 Drill type (eg core, reverse
circulation, open-hole hammer,
rotary air blast, auger, Banka, sonic,
etc) and details (eg core diameter,
triple or standard tube, depth of
diamond tails, face- sampling bit or
other type, whether core is oriented
and if so, by what method, etc).		 • Hydraulic augers, produced by Christie Engineering
in Australia, were used to obtain samples. Auger
drilling is an acceptable drilling method for shallow
beach Heavy Mineral deposits like Tormin.
• The auger is 90mm dimeter and drilling is open hole.
• The first drill rod is 2.5m long and subsequent rods
are 2m long.
• All holes were drilled vertically.
Drill sample
recovery		 Method of recording and assessing
core and chip sample recoveries and
results assessed.
Measures taken to maximise sample		 • Given the drilling method combined with drilling sand
there is potential for caving (caving was not visually
observed) and downhole contamination. This could
be assessed bymeasuringsample recovery (drying

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 18

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
and weighing whole sample) and by drilling twin
holes.
• Each hole was logged by a geologist on pre- printed
log sheets.
• They key logging information is the presence of 1)
Bedrock which is normally a clayey schist, 2) White
pebbly and clayey sand locally called a channel clay
unit or 3) Poorly mineralised gravelly sand.
• Samples generally being wet/moist are dried at the
laboratory then screened at +2mm.
• A sample split is taken from an 8 way rotary splitter.
Homogenisation also occurs during this splitting
stage.
• Lab duplicate samples are split for the Tormin mine
laboratory QA/QC checks. Control samples in the
form of internal reference standards are run daily.
• Further work is required to demonstrate that the sub-
sampling approach is appropriate.
• All sample analyses were undertaken by the Tormin
mine laboratory.
• No geophysical, portable XRF, etc. instruments were
used.
• The mine owns and operates an HLS lab with
Panalytical Aeris XRD machines (the Rietveld
method after HLS) in an automated mode setup and
industrial laboratory XRF (Panalytical Epsilon 3 ED)
for zircon content.
Criteria JORC Code Explanation Commentary
recovery and ensure representative
nature of the samples.
Whether a relationship exists
between sample recovery and grade
and whether sample bias may have
occurred due to preferential loss/gain
of fine/coarse material.		 and weighing whole sample) and by drilling twin
holes.
Logging Whether core and chip samples have
been geologically and geotechnically
logged to a level of detail to support
appropriate Mineral Resource
estimation, mining studies and
metallurgical studies.
Whether logging is qualitative or
quantitative in nature. Core (or
costean, channel, etc) photography.
The total length and percentage of
the relevant intersections logged.		 • Each hole was logged by a geologist on pre- printed
log sheets.
• They key logging information is the presence of 1)
Bedrock which is normally a clayey schist, 2) White
pebbly and clayey sand locally called a channel clay
unit or 3) Poorly mineralised gravelly sand.
Sub-
sampling
techniques
and sample
preparation		 If core, whether cut or sawn and
whether quarter, half or all core taken.
If non-core, whether riffled, tube
sampled, rotary split, etc and
whether sampled wet or dry.
For all sample types, the nature,
quality, and appropriateness of the
sample preparation technique.
Quality control procedures adopted
for all sub-sampling stages to
maximise representivity of samples.
Measures taken to ensure that the
sampling is representative of the in
situ material collected, including for
instance results for field
duplicate/second-half sampling.
Whether sample sizes are
appropriate to the grain size of the
material being sampled.		 • Samples generally being wet/moist are dried at the
laboratory then screened at +2mm.
• A sample split is taken from an 8 way rotary splitter.
Homogenisation also occurs during this splitting
stage.
• Lab duplicate samples are split for the Tormin mine
laboratory QA/QC checks. Control samples in the
form of internal reference standards are run daily.
• Further work is required to demonstrate that the sub-
sampling approach is appropriate.
Quality of
assay data
and
laboratory
tests		 The nature, quality and
appropriateness of the assaying and
laboratory procedures used and
whether the technique is considered
partial or total.
For geophysical tools,
spectrometers, handheld XRF
instruments, etc, the parameters
used in determining the analysis
including instrument make and		 • All sample analyses were undertaken by the Tormin
mine laboratory.
• No geophysical, portable XRF, etc. instruments were
used.
• The mine owns and operates an HLS lab with
Panalytical Aeris XRD machines (the Rietveld
method after HLS) in an automated mode setup and
industrial laboratory XRF (Panalytical Epsilon 3 ED)
for zircon content.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 19

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• The Tormin mine laboratory completes its own
internal QA/QC using standard reference material at
the rate of approximately 1 in 40 and sends every
20th sample to an external laboratory.
• External sampling checks for XRD have been
undertaken by XRD Analytical and Consulting.
• External laboratory results are problematic with
some extremely different results which may be due
to sample mix-ups. This requires further
investigation.
• No CRM’s or blanks were inserted.
• All sample preparation was undertaken by trained
staff, supervised by chemists and the laboratory
manager.
• No twin holes have been drilled for this estimate.
Drilling twin holes would be worthwhile.
• The drillhole logs have been converted to
electronically stored formats and stored in a
database provided by Maxwell Geoservices
(Webshed). This database is hosted on an offsite
server supplied by Maxwell Geoservices and
managed by their trained database staff.
• No adjustment to assay data results was made
outside the standard XRD and XRF calibration
software beingused.
• Hole collar locations were determined with DGPS,
accurate to within centimeters.
• Down hole surveys for very shallow vertical holes
are not required.
• WGS 84 datum and UTM/zone 34S coordinate
system is used.
• Topographical control is highly problematic due to
constant changes in surface levels after daily high
tides and storm events.
• Target drillhole spacing is 50m x 20m, subject to
beach access due to tides.
• Provided there are no significant issues with data
quality, density etc. a 50m x 20m drill spacing is
sufficient to classify the resource as Measured.
Criteria JORC Code Explanation Commentary
model, reading times, calibrations
factors applied and their derivation,
etc.
Nature of quality control procedures
adopted (eg standards, blanks,
duplicates, external laboratory
checks) and whether acceptable
levels of accuracy (ie lack of bias) and
precision have been established.		 • The Tormin mine laboratory completes its own
internal QA/QC using standard reference material at
the rate of approximately 1 in 40 and sends every
20th sample to an external laboratory.
• External sampling checks for XRD have been
undertaken by XRD Analytical and Consulting.
• External laboratory results are problematic with
some extremely different results which may be due
to sample mix-ups. This requires further
investigation.
• No CRM’s or blanks were inserted.
Verification
of sampling
and
assaying		 The
verification
of significant
intersections by either independent or
alternative company personnel.
The use of twinned holes.
Documentation of primary data,
data entry procedures, data
verification, data storage (physical
and electronic) protocols.
Discuss any adjustment to assay
data.		 • All sample preparation was undertaken by trained
staff, supervised by chemists and the laboratory
manager.
• No twin holes have been drilled for this estimate.
Drilling twin holes would be worthwhile.
• The drillhole logs have been converted to
electronically stored formats and stored in a
database provided by Maxwell Geoservices
(Webshed). This database is hosted on an offsite
server supplied by Maxwell Geoservices and
managed by their trained database staff.
• No adjustment to assay data results was made
outside the standard XRD and XRF calibration
software beingused.
Location of
data points		 Accuracy and quality of surveys used
to locate drillholes (collar and down-
hole surveys), trenches, mine
workings and other locations used in
Mineral Resource estimation.
Specification of the grid system used.
Quality and adequacy of topographic
control.		 • Hole collar locations were determined with DGPS,
accurate to within centimeters.
• Down hole surveys for very shallow vertical holes
are not required.
• WGS 84 datum and UTM/zone 34S coordinate
system is used.
• Topographical control is highly problematic due to
constant changes in surface levels after daily high
tides and storm events.
Data
spacing and
distribution		 Data spacing for reporting of
exploration results.
Whether the data spacing and
distribution are sufficient to establish
the degree of geological and grade
continuity appropriate for the Mineral
Resource and Ore Reserve
estimation procedure(s) and
classifications applied.
Whether sample compositing has
been applied.		 • Target drillhole spacing is 50m x 20m, subject to
beach access due to tides.
• Provided there are no significant issues with data
quality, density etc. a 50m x 20m drill spacing is
sufficient to classify the resource as Measured.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 20

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Geological structure is neither relevant nor
applicable to an active placer beach sand deposit.
• Vertical drilling intersects sub-horizontal strata.
• Orientation of the drillholes will not result in sampling
bias.
• All sample bag numbers were logged against the
drillhole by the site geologist. Bagged samples were
labelled, zip-tied and transported to the laboratory.
• No external audits of sampling or the laboratory have
occurred recently
Criteria JORC Code Explanation Commentary
Orientation
of data in
relation to
geological
structure		 Whether the orientation of sampling
achieves
unbiased
sampling
of
possible structures and the extent to
which this is known, considering the
deposit type.
If the relationship between the drilling
orientation and the orientation of key
mineralised structures is considered
to have introduced a sampling bias,
this should be assessed and
reported if material.		 • Geological structure is neither relevant nor
applicable to an active placer beach sand deposit.
• Vertical drilling intersects sub-horizontal strata.
• Orientation of the drillholes will not result in sampling
bias.
Sample
security		 The measures taken to ensure sample
security.		 • All sample bag numbers were logged against the
drillhole by the site geologist. Bagged samples were
labelled, zip-tied and transported to the laboratory.
Audits or
reviews		 The results of any audits or reviews of
sampling techniques and data.		 • No external audits of sampling or the laboratory have
occurred recently

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section)

Criteria JORC Code Explanation Commentary
Mineral
tenement and
land tenure
status		 Type, reference name/number,
location and ownership including
agreements or material issues
with third parties such as joint
ventures, partnerships, overriding
royalties, native title interests,
historical sites, wilderness or
national park and environmental
settings.
The security of the tenure held at
the time of reporting along with
any known impediments to
obtaining a licence to operate in
the area.		 • The resource is owned by Mineral Sands Resources
(Pty) Ltd, a subsidiary of ASX listed Mineral
Commodities Ltd (ASX: MRC).
• The resource is being mined under two active
mining rights 30/5/2/2/2/10107 & 10108.
• The mining rights were renewed in August 2019 for
an additional 10 years, up to 22nd of August 2029.
Exploration
done by other
parties		 Acknowledgment and appraisal of
exploration by other parties.		 • The general area has been investigated and mined
for heavy mineral deposits as far back as the 1930s
(Haughton, 1931). Subsequent geological surveys
and exploration programs investigated the
distribution, mineralogy and economic potential of
the HMS along the coastline of Geelwal Karoo
(Toerien & Groeneveld 1957, Abele 1989, Swart
1990, Barnes 1998) and Trans Hex 1989-1991).
• A Definitive Feasibility Study on the deposit was
done in 2006 by K’Enyuka and a Bankable
Feasibility Study review by HBH consultants.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 21

ASX: MRC ASX: MRC 28 April 2023

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Deposit is a heavy mineral sand deposit located on
an active placer beach strandline undergoing
continues erosion, deposition and replenishment
from oceanic storm and wave activity.
• The minimum hole length is 1m and the maximum
4m.
• Drilling is generally between low-tide and high-tide
marks.
• East
collar ranges – 219,954mE to
226,547mE.
• North collar ranges – 6,501,624mN to 6,509,394mN.
• Exploration results are not being reported.
• Mineralisation is enriched sedimentary layers semi-
parallel to the bedrock contact and beach slope
angle.
Criteria JORC Code Explanation Commentary
Geology Deposit type, geological setting
and style of mineralisation.		 • Deposit is a heavy mineral sand deposit located on
an active placer beach strandline undergoing
continues erosion, deposition and replenishment
from oceanic storm and wave activity.
Drill hole
Information		 A summary of all information
material to the understanding of
the exploration results including a
tabulation of the following
information for all Material drill
holes:
Easting and northing of the drill
hole collar
elevation or RL (Reduced Level –
elevation above sea level in
metres) of the drill hole collar
dip and azimuth of the hole
down hole length and interception
depth
hole length.
If the exclusion of this information
is justified on the basis that the
information is not Material and
this exclusion does not detract
from the understanding of the
report, the Competent Person
should clearly explain why this is
the case.		 • The minimum hole length is 1m and the maximum
4m.
• Drilling is generally between low-tide and high-tide
marks.
• East
collar ranges – 219,954mE to
226,547mE.
• North collar ranges – 6,501,624mN to 6,509,394mN.
Data
aggregation
methods		 In reporting Exploration Results,
weighting averaging techniques,
maximum and/or minimum grade
truncations (eg cutting of high
grades) and cut-off grades are
usually Material and should be
stated.
Where aggregate intercepts
incorporate short lengths of high
grade results and longer lengths
of low grade results, the
procedure used for such
aggregation should be stated and
some typical examples of such
aggregations should be shown in
detail.
The assumptions used for any
reporting of metal equivalent
values should be clearly stated.		 • Exploration results are not being reported.
Relationship
between
mineralisation
widths and		 These relationships are
particularly important in the
reporting of Exploration Results.
If thegeometry of the		 • Mineralisation is enriched sedimentary layers semi-
parallel to the bedrock contact and beach slope
angle.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 22

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Mineralisation is essentially flat laying, and as such,
vertical drillholes represent true width.
• Mineralisation from surface to bedrock is mined with
no vertical selectivity.
• In plan view blocks estimated to be above 2% THM
content are mined.
• Significant intersections are not being reported.
• Maps, sections and plan view are provided in the
resource report.
• Exploration results are not being reported.
• The resource is progressively lowering in grade and
volume as replenishment has been slower than the
mining rate.
• Offshore sampling to determine the source of grade
replenishment is planned.
Criteria JORC Code Explanation Commentary
intercept
lengths		 mineralisation with respect to the
drill hole angle is known, its
nature should be reported.
If it is not known and only the
down hole lengths are reported,
there should be a clear statement
to this effect (eg ‘down hole
length, true width not known’).		 • Mineralisation is essentially flat laying, and as such,
vertical drillholes represent true width.
• Mineralisation from surface to bedrock is mined with
no vertical selectivity.
• In plan view blocks estimated to be above 2% THM
content are mined.
Diagrams Appropriate maps and sections
(with scales) and tabulations of
intercepts should be included for
any significant discovery being
reported These should include,
but not be limited to a plan view of
drill hole collar locations and
appropriate sectional views.		 • Significant intersections are not being reported.
• Maps, sections and plan view are provided in the
resource report.
Balanced
reporting		 Where comprehensive reporting of
all Exploration Results is not
practicable, representative
reporting of both low and high
grades and/or widths should be
practiced to avoid misleading
reporting of Exploration Results.		 • Exploration results are not being reported.
Other
substantive
exploration
data		 Other exploration data, if
meaningful and material, should
be reported including (but not
limited to): geological
observations; geophysical survey
results; geochemical survey
results; bulk samples – size and
method of treatment; metallurgical
test results; bulk density,
groundwater, geotechnical and
rock characteristics; potential
deleterious or contaminating
substances.		 • The resource is progressively lowering in grade and
volume as replenishment has been slower than the
mining rate.
Further work The nature and scale of planned
further work (eg tests for lateral
extensions or depth extensions or
large-scale step-out drilling).
Diagrams clearly highlighting the
areas of possible extensions,
including the main geological
interpretations and future drilling
areas, provided this information is
not commercially sensitive.		 • Offshore sampling to determine the source of grade
replenishment is planned.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 23

ASX: MRC ASX: MRC

28 April 2023

Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in the preceding sections also apply to this section)

==> picture [121 x 112] intentionally omitted <==
Criteria JORC Code Explanation Commentary
Database
integrity		 Measures taken to ensure that
data has not been corrupted by,
for example, transcription or
keying errors, between its initial
collection and its use for Mineral
Resource estimation purposes.
Data validation procedures used.		 • The data was plotted and plots were as expected, with no
misplots or extraneous data found. Maximum and
minimum values and average values were all within the
norm.
• Data is stored in an offsite database hosted by Maxwell
Geoservices.
Site visits Comment on any site visits
undertaken by the Competent
Person and the outcome of
those visits.
If no site visits have been
undertaken indicate why this is
the case.		 • The previous Competent Person was a full-time employee
of Mineral Commodities Ltd. However, the new Competent
Person as of 2022 has not had sufficient time to visit site. A
site visit is planned for 2023.
Geological
interpretation		 Confidence in (or conversely,
the uncertainty of) the
geological interpretation of the
mineral deposit.
Nature of the data used and of
any assumptions made.
The effect, if any, of alternative
interpretations on Mineral
Resource estimation.
The use of geology in guiding
and controlling Mineral
Resource estimation.
The factors affecting continuity
both of grade and geology.		 • Deposit is a heavy mineral sand deposit located on an
active placer beach strandline undergoing continues
erosion, deposition and replenishment from oceanic storm
and wave activity.
• Samples were collected for resource calculation purposes.
• The deposit is vertically constrained by topography and the
base of drilling. Topography is surveyed at or close to the
time of drilling and the base of the domain is assumed to
be the end of hole depths.
• The deposit is constrained shoreward by the low water
mark with a 10m standoff and landward by a 10m standoff
from cliffs and dunes.
• Grade continuity is influenced by wave action and hence is
best parallel to the beachfront.
• Some sorting of the heavy minerals occurs based on
density i.e., minerals with similar density tend to be
spatiallyassociated.
Dimensions The extent and variability of the
Mineral Resource expressed as
length (along strike or
otherwise), plan width, and
depth below surface to the
upper and lower limits of the
Mineral Resource.		 • The deposit has a strike length along the coastline of
approximately 10,000m with individual beaches generally
separated by rocky headlands/rocky beaches which
cannot be mined.
• The deposits have an average width from the cliffs to
within the surf zone of 60m. The mining width varies from
20-60m and averages about 35m.
• The deposit is developed from surface to a maximum
depth of 4m. The deposit occurs from the surface down.
Estimation and
modelling
techniques		 The nature and appropriateness
of the estimation technique(s)
applied and key assumptions,
including treatment of extreme
grade values, domaining,
interpolation parameters and		 • Leapfrog, MinePlan and Isatis. Neo software were used to
domain and estimate each of the valuable heavy minerals
as well as the THM. Meshes were created from the
topographic surveys (upper surfaces) and the base of
drillholes (lower surfaces). The topographic surveys are
restricted to the mineable area and therefore domains do

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 24

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
not extend outside this.
• No internal domaining of the beach sands is practical or
applicable.
• Eight beaches have been modelled.
• Of the eight modelled beaches only beach seven had
minor outlier restrictions applied.
• Ordinary Kriging was used as the primary estimator which
is suitable for the beach sands given that the
mineralisation is diffusive in nature (this still needs to be
verified via the relevant statistical tests).
• Kriging by its nature will smooth the estimates however,
there is no vertical mining selectivity (besides stopping at
the base of beach sands) and horizontal selectivity is
somewhat limited.
• Discretization of 4 x 4 x 1 which relates to a parent block
size of 10m x 10m x 1m. Sub-blocking is down to 5m x 5m
x 1m. The parent block size is about half the across strike
drill spacing and 1/5th the along strike spacing.
• Searches are horizontal with maximum continuity parallel
to each beach (500m x 100m x 16m). Minimum of 6
samples and a maximum of 16 for kriging. Typical drill
spacing is 50m x 20m however, extrapolation can be up to
several hundred meters. In all estimated areas mineable
beach is present (providing THM is greater than 2%).
• The search for a given beach is identical for each variable.
This is to maintain the correlations between variables.
• There are no deleterious variables. The THM content
excludes slimes and oversize because these fractions will
not be recovered during processing. All estimated
variables form part of the THM fraction, which is
recoverable. However, the estimates of the individual
variables are in situ and not necessarily 100% recoverable.
This is because the grade variables are estimated via XRD
not magnetic and gravity selection.
• Check estimates were made for all variables and beaches.
These estimates were nearest neighbor and inverse
distance squared.
• All estimates were validated against the check estimates
and input data both visuallyand statistically.
• The resource tonnages are estimated on a dry basis. Sand
is wet and fully saturated when mined out, but it is free
draining when stockpiled.
• Reported resource is based on a 2% THM cut-off grade
because this is the current minimum grade for which there
is a reasonable expectation for eventual economic
extraction.
Criteria JORC Code Explanation Commentary
maximum distance of
extrapolation from data points. If
a computer assisted estimation
method was chosen, include a
description of computer
software and parameters used.
The availability of check
estimates, previous estimates
and/or mine production records
and whether the Mineral
Resource estimate takes
appropriate account of such
data.
The assumptions made
regarding recovery of by-
products.
Estimation of deleterious
elements or other non-grade
variables of economic
significance (eg sulphur for acid
mine drainage characterisation).
In the case of block model
interpolation, the block size in
relation to the average sample
spacing and the search
employed.
Any assumptions behind
modelling of selective mining
units.
Any assumptions about
correlation between variables.
Description of how the
geological interpretation was
used to control the resource
estimates.
Discussion of basis for using or
not using grade cutting or
capping.
The process of validation, the
checking process used, the
comparison of model data to
drill hole data, and use of
reconciliation data if available.		 not extend outside this.
• No internal domaining of the beach sands is practical or
applicable.
• Eight beaches have been modelled.
• Of the eight modelled beaches only beach seven had
minor outlier restrictions applied.
• Ordinary Kriging was used as the primary estimator which
is suitable for the beach sands given that the
mineralisation is diffusive in nature (this still needs to be
verified via the relevant statistical tests).
• Kriging by its nature will smooth the estimates however,
there is no vertical mining selectivity (besides stopping at
the base of beach sands) and horizontal selectivity is
somewhat limited.
• Discretization of 4 x 4 x 1 which relates to a parent block
size of 10m x 10m x 1m. Sub-blocking is down to 5m x 5m
x 1m. The parent block size is about half the across strike
drill spacing and 1/5th the along strike spacing.
• Searches are horizontal with maximum continuity parallel
to each beach (500m x 100m x 16m). Minimum of 6
samples and a maximum of 16 for kriging. Typical drill
spacing is 50m x 20m however, extrapolation can be up to
several hundred meters. In all estimated areas mineable
beach is present (providing THM is greater than 2%).
• The search for a given beach is identical for each variable.
This is to maintain the correlations between variables.
• There are no deleterious variables. The THM content
excludes slimes and oversize because these fractions will
not be recovered during processing. All estimated
variables form part of the THM fraction, which is
recoverable. However, the estimates of the individual
variables are in situ and not necessarily 100% recoverable.
This is because the grade variables are estimated via XRD
not magnetic and gravity selection.
• Check estimates were made for all variables and beaches.
These estimates were nearest neighbor and inverse
distance squared.
• All estimates were validated against the check estimates
and input data both visuallyand statistically.
Moisture Whether the tonnages are
estimated on a dry basis or with
natural moisture, and the
method of determination of the
moisture content.		 • The resource tonnages are estimated on a dry basis. Sand
is wet and fully saturated when mined out, but it is free
draining when stockpiled.
Cut-off
parameters		 The basis of the adopted
cut-off grade(s) or quality
parameters applied.		 • Reported resource is based on a 2% THM cut-off grade
because this is the current minimum grade for which there
is a reasonable expectation for eventual economic
extraction.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 25

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==
Criteria JORC Code Explanation Commentary
• 2% cut-off grade was based on grade- tonnage curves with
respect to THM and VHM assemblage. Also taken into
account were current and anticipated plant performance.
• The proportion of the VHM within the THM varies and a
cut-off based on VHM would be more accurate. MRC plan
to move to a VHM cut-off for external reporting of
resources.
Mining factors
or assumptions		 Assumptions made regarding
possible mining methods,
minimum mining dimensions
and internal (or, if applicable,
external) mining dilution. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider potential mining
methods, but the assumptions
made regarding mining methods
and parameters when
estimating Mineral Resources
may not always be rigorous.
Where this is the case, this
should be reported with an
explanation of the basis of the
mining assumptions made.		 • The dynamic beach environment results in a cyclic process
of deposition on and erosion of the beach surface.
Historical studies by Trans Hex have found a weighted
average change over 9 months of up to ~9% loss or up to
~7% increase. This variability is also evident in the
replenishment rate and grade of material observed.
• Opencast mining. The pits generally only remain open
during low tide, except where beach conditions allow
larger, more stable protective bunding to be constructed.
• There is no stripping as mining starts at the surface.
• Natural replenishment of the resource is taking place as
the open pits are filled with HMS material from the surf
zone during the next high tide.
• In general, it appears that replenishment is mostly
associated with winter storms when the sea brings sand
from the nearshore and offshore areas. Replenishment is
also a function of time and the number of sea storm
events. Given enough time between mining events, the
resource is still replenishing, although the long-term trend
is a significant lowering in grade.
• The overall lowering of the beach surface (due to mining)
has resulted in the faster movement of large volumes of
material between the beach and the surf zone than before
mining started.
• Since mining commenced in 2014 some mining blocks
have been mined upto 30 times.
Metallurgical
factors or
assumptions		 The basis for assumptions or
predictions regarding
metallurgical amenability. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider potential metallurgical
methods, but the assumptions
regarding metallurgical
treatment processes and
parameters made when
reporting Mineral Resources
may not always be rigorous.
Where this is the case, this
should be reported with an
explanation of the basis of the
metallurgical assumptions made		 • Metallurgical factors have been taken from the current
processing plant.
• After seven years of mining in the Tormin Beaches, the
mine is an ongoing profitable concern.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 26

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==
Criteria JORC Code Explanation Commentary
Environmental
factors or
assumptions		 Assumptions made regarding
possible waste and process
residue disposal options. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider the potential
environmental impacts of the
mining and processing
operation. While at this stage the
determination of potential
environmental impacts,
particularly for a greenfield
project, may not always be well
advanced, the status of early
consideration of these potential
environmental impacts should
be reported. Where these
aspects have not been
considered, this should be
reported with an explanation of
the environmental assumptions
made.		 • There is a 10m stability buffer zone between the coastal
cliffs and the beach where no mining is allowed.
• All mining voids get naturally filled with beach sand
material during high tide and there is therefore no
rehabilitation liability in this regard.
• Tailings get dumped onto the beach where they are
distributed and settled along the coastline under natural
wave and sea current action. There are no pollutants
introduced with the tailings and the material is inert.
Bulk density Whether assumed or
determined. If assumed, the
basis for the assumptions. If
determined, the method used,
whether wet or dry, the
frequency of the measurements,
the nature, size and
representativeness of the
samples.
The bulk density for bulk
material must have been
measured by methods that
adequately account for void
spaces (vugs, porosity, etc),
moisture and differences
between rock and alteration
zones within the deposit.
Discuss assumptions for bulk
density estimates used in the
evaluation process of the
different materials.		 • The bulk density is based on a calculation of the specific
gravity of the silica and heavy mineral content fractions of
each sample. It is therefore not fixed and fluctuates
between
• 1.66 and 2.19 as per the formula: SG=1.65+(0.009 x HM).
• Bulk density measurements (compacted and
uncompacted) are conducted for approximately every 20th
sample by the internal laboratory. However, densities do
not necessarily represent in situ density.
• Density should be measured by excavating a known
volume, drying the sample and weighing it. THM content
should also be measured so density can be calculated.
Classification The basis for the classification of
the Mineral Resources into
varying confidence categories.
Whether appropriate account
has been taken of all relevant
factors (ie relative confidence in
tonnage/grade estimations,
reliability of input data,
confidence in continuity of
geology and metal values,
quality, quantity and distribution		 • The Mineral Resources have been classified as Indicated,
and Inferred categories, in accordance with the 2012
Australasian Code for Reporting of Mineral Resources and
Ore Reserves (JORC Code).
• No deleterious minerals are known.
• Drillhole spacing:
• Areas with drillhole spacing at the target spacing of 50m x
20m have been classified as Indicated.
• All other areas classified as Inferred.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 27

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
• The resource has been classified based on the data
available at what is effectively a “snapshot” in time with
surveying, drilling and sampling occurring over a short time
period of several months. As soon as the deposit is
surveyed and sampled it will be changing due to
tides/storm activity either removing or adding resource.
Overall, the resource is expected to replenish (VHM
increase) over time providing mining is paused. The
Competent Person considers it essential that every time
the resource is presented externally a footnote describing
the dynamic nature of the resource be included.
• The author is confident that all relevant factors have been
considered and the classification reflects his views.
• The resource has not been internally or externally
reviewed.
• Accuracy/ confidence of the resource has not been
assessed via methods such as estimation variance or
conditional simulation studies. A simple estimation
variance study would be worthwhile however the greatest
uncertainty is still the dynamic nature of tides adding ore
removing resource over time.
• Resource replenishment after mining is continuously
monitored and is relatively predictable.
Criteria JORC Code Explanation Commentary
of the data).
Whether the result appropriately
reflects the Competent Person’s
view of the deposit.		 • The resource has been classified based on the data
available at what is effectively a “snapshot” in time with
surveying, drilling and sampling occurring over a short time
period of several months. As soon as the deposit is
surveyed and sampled it will be changing due to
tides/storm activity either removing or adding resource.
Overall, the resource is expected to replenish (VHM
increase) over time providing mining is paused. The
Competent Person considers it essential that every time
the resource is presented externally a footnote describing
the dynamic nature of the resource be included.
• The author is confident that all relevant factors have been
considered and the classification reflects his views.
Audits or
reviews		 The results of any audits or
reviews of Mineral Resource
estimates.		 • The resource has not been internally or externally
reviewed.
Discussion of
relative
accuracy/
confidence		 Where appropriate, a statement
of the relative accuracy and
confidence level in the Mineral
Resource estimate using an
approach or procedure deemed
appropriate by the Competent
Person. For example, the
application of statistical or
geostatistical procedures to
quantify the relative accuracy of
the resource within stated
confidence limits, or, if such an
approach is not deemed
appropriate, a qualitative
discussion of the factors that
could affect the relative
accuracy and confidence of the
estimate.
The statement should specify
whether it relates to global or
local estimates, and, if local,
state the relevant tonnages,
which should be relevant to
technical and economic
evaluation. Documentation
should include assumptions
made and theprocedures used.		 • Accuracy/ confidence of the resource has not been
assessed via methods such as estimation variance or
conditional simulation studies. A simple estimation
variance study would be worthwhile however the greatest
uncertainty is still the dynamic nature of tides adding ore
removing resource over time.
• Resource replenishment after mining is continuously
monitored and is relatively predictable.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 28

ASX: MRC ASX: MRC

28 April 2023

JORC TABLE 1 Northern Beaches Section 1 Sampling Techniques and Data

==> picture [121 x 112] intentionally omitted <==

(Criteria in this section apply to all succeeding sections)

Criteria JORC Code Explanation Commentary
Sampling
techniques		 Nature and quality of sampling (eg
cut channels, random chips, or
specific specialised industry standard
measurement tools appropriate to
the minerals under investigation,
such as down hole gamma sondes,
or handheld XRF instruments, etc).
These examples should not be taken
as limiting the broad meaning of
sampling.
Include reference to measures taken
to ensure sample representivity and
the appropriate calibration of any
measurement tools or systems used.
Aspects of the determination of
mineralisation that are Material to the
Public Report. In cases where
‘industry standard’ work has been
done this would be relatively simple
(eg ‘reverse circulation drilling was
used to obtain 1m samples from
which 3kg was pulverised to produce
a 30g charge for fire assay’). In other
cases, more explanation may be
required, such as where there is
coarse gold that has inherent
sampling problems. Unusual
commodities or mineralisation types
(eg submarine nodules) may warrant
disclosure of detailed information.		 • The current resource is based on 235 auger holes,
representing 557m of vertical drilling.
• Holes are 1-4m deep with samples taken from
surface to end of hole. The end of hole is generally
1) Bedrock which is normally a weathered gneiss, 2)
Poorly mineralised gravelly sand which is mined by
diamond mining contractors or 3) mid-Proterozoic
Namaqua Natal Metamorphic Complex. Up to 20cm
of the above material (points 1 to 3) can be included
as dilution. Occasionally a hole is stopped early due
to e.g., intersecting a boulder.
• Samples are mostly 1m in length (about 6.6 kg) with
the occasional 0.5m sample.
• For sampling a plastic tarpaulin is laid on the ground
to collect the sample and the sample is removed
from the auger which is brushed clean
• The whole sample is bagged, closed with cable tie,
and sent to the Tormin laboratory. The sample
cannot be split at the rig because it generally
contains high moisture content.
• At the laboratory samples are oven-dried whole,
screened (2mm) and split for assaying. There are no
slimes in the beach sand.
• 200g of sample is split (8 way rotary splitter) to use
for heavy liquid separation (HLS) using Bromoform
with density range between 2.92 and 2.96g/ml to
define total heavy mineral (THM) content.
• Mineralisation and grade test work are completed
according to mine standards within Tormin mine site
laboratory. XRF,HLS and XRD.
Drilling
techniques		 Drill type (eg core, reverse
circulation, open-hole hammer,
rotary air blast, auger, Banka, sonic,
etc) and details (eg core diameter,
triple or standard tube, depth of
diamond tails, face- sampling bit or
other type, whether core is oriented
and if so, by what method, etc).		 • Hydraulic augers, produced by Christie Engineering
in Australia, were used to obtain samples. Auger
drilling is an acceptable drilling method for shallow
beach Heavy Mineral deposits like Tormin.
• The auger is 90mm dimeter and drilling is open hole.
• The first drill rod is 2.5m long and subsequent rods
are 2m long.
• All holes were drilled vertically.
Drill sample
recovery		 Method of recording and assessing
core and chip sample recoveries and
results assessed.
Measures taken to maximise sample		 • Given the drilling method combined with drilling sand
there is potential for caving (caving was not visually
observed) and downhole contamination. This could
be assessed bymeasuringsample recovery (drying

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 29

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
and weighing complete sample) and by drilling twin
holes.
• Each hole was logged by a geologist on pre- printed
log sheets.
• They key information is 1) Bedrock which is normally
a weathered gneiss, 2) Poorly mineralised gravelly
sand which is mined by diamond mining contractors
or 3) mid-Proterozoic Namaqua Natal Metamorphic
Complex.
• Samples generally being wet/moist are dried at the
laboratory then screened at +2mm.
• A sample split is taken from an 8 way rotary splitter.
Homogenisation also occurs during this splitting
stage.
• Lab duplicate samples are split for the Tormin mine
laboratory QA/QC checks. Control samples in the
form of internal reference standards are run daily.
• Further work is required to demonstrate that the sub-
sampling approach is appropriate.
• All sample analyses were undertaken by the Tormin
mine laboratory.
• No geophysical, portable XRF, etc. instruments were
used.
• The mine owns and operates an HLS lab with
Panalytical Aeris XRD machines (the Rietveld
method after HLS) in an automated mode setup and
industrial laboratory XRF (Panalytical Epsilon 3 ED)
for zircon content.
• The Tormin mine laboratory completes its own
internal QA/QC using standard reference material at
the rate of approximately1 in 40 and sends every
Criteria JORC Code Explanation Commentary
recovery and ensure representative
nature of the samples.
Whether a relationship exists
between sample recovery and grade
and whether sample bias may have
occurred due to preferential loss/gain
of fine/coarse material.		 and weighing complete sample) and by drilling twin
holes.
Logging Whether core and chip samples have
been geologically and geotechnically
logged to a level of detail to support
appropriate Mineral Resource
estimation, mining studies and
metallurgical studies.
Whether logging is qualitative or
quantitative in nature. Core (or
costean, channel, etc) photography.
The total length and percentage of
the relevant intersections logged.		 • Each hole was logged by a geologist on pre- printed
log sheets.
• They key information is 1) Bedrock which is normally
a weathered gneiss, 2) Poorly mineralised gravelly
sand which is mined by diamond mining contractors
or 3) mid-Proterozoic Namaqua Natal Metamorphic
Complex.
Sub-
sampling
techniques
and sample
preparation		 If core, whether cut or sawn and
whether quarter, half or all core taken.
If non-core, whether riffled, tube
sampled, rotary split, etc and
whether sampled wet or dry.
For all sample types, the nature,
quality, and appropriateness of the
sample preparation technique.
Quality control procedures adopted
for all sub-sampling stages to
maximise representivity of samples.
Measures taken to ensure that the
sampling is representative of the in
situ material collected, including for
instance results for field
duplicate/second-half sampling.
Whether sample sizes are
appropriate to the grain size of the
material being sampled.		 • Samples generally being wet/moist are dried at the
laboratory then screened at +2mm.
• A sample split is taken from an 8 way rotary splitter.
Homogenisation also occurs during this splitting
stage.
• Lab duplicate samples are split for the Tormin mine
laboratory QA/QC checks. Control samples in the
form of internal reference standards are run daily.
• Further work is required to demonstrate that the sub-
sampling approach is appropriate.
Quality of
assay data
and
laboratory
tests		 The nature, quality and
appropriateness of the assaying and
laboratory procedures used and
whether the technique is considered
partial or total.
For geophysical tools,
spectrometers, handheld XRF
instruments, etc, the parameters
used in determining the analysis
including instrument make and
model, reading times, calibrations
factors applied and their derivation,
etc.		 • All sample analyses were undertaken by the Tormin
mine laboratory.
• No geophysical, portable XRF, etc. instruments were
used.
• The mine owns and operates an HLS lab with
Panalytical Aeris XRD machines (the Rietveld
method after HLS) in an automated mode setup and
industrial laboratory XRF (Panalytical Epsilon 3 ED)
for zircon content.
• The Tormin mine laboratory completes its own
internal QA/QC using standard reference material at
the rate of approximately1 in 40 and sends every

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 30

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
20th sample to an external laboratory.
• External sampling checks for XRD have been
undertaken by XRD Analytical and Consulting.
• External laboratory results are problematic with
some extremely different results which may be due
to sample mix-ups. This requires further
investigation.
• No CRM’s or blanks were inserted.
• All sample preparation was undertaken by trained
staff, supervised by chemists and the laboratory
manager.
• No twin holes have been drilled for this estimate.
Twin holes would be worthwhile drilling.
• The drillhole logs have been converted to
electronically stored formats and stored in a
database provided by Maxwell Geoservices
(Webshed). This database is hosted on an offsite
server supplied by Maxwell Geoservices and
managed by their trained database staff.
• No adjustment to assay data results was made
outside the standard XRD and XRF calibration
software beingused.
• Hole collar locations were determined with DGPS,
accurate to within centimetres.
• Down hole surveys for very shallow vertical holes
are not required.
• WGS 84 datum and UTM/zone 34S coordinate
system is used.
• Topographical control is highly problematic due to
constant changes in surface levels after daily high
tides and storm events.
• Target drillhole spacing is 50m x 20m, subject to
beach access due to tides.
• Provided there are no significant issues with data
quality, density etc. a 50m x 20m drill spacing is
sufficient to classify the resource as Measured.
Criteria JORC Code Explanation Commentary
Nature of quality control procedures
adopted (eg standards, blanks,
duplicates, external laboratory
checks) and whether acceptable
levels of accuracy (ie lack of bias) and
precision have been established.		 20th sample to an external laboratory.
• External sampling checks for XRD have been
undertaken by XRD Analytical and Consulting.
• External laboratory results are problematic with
some extremely different results which may be due
to sample mix-ups. This requires further
investigation.
• No CRM’s or blanks were inserted.
Verification
of sampling
and
assaying		 The
verification
of significant
intersections by either independent or
alternative company personnel.
The use of twinned holes.
Documentation of primary data,
data entry procedures, data
verification, data storage (physical
and electronic) protocols.
Discuss any adjustment to assay
data.		 • All sample preparation was undertaken by trained
staff, supervised by chemists and the laboratory
manager.
• No twin holes have been drilled for this estimate.
Twin holes would be worthwhile drilling.
• The drillhole logs have been converted to
electronically stored formats and stored in a
database provided by Maxwell Geoservices
(Webshed). This database is hosted on an offsite
server supplied by Maxwell Geoservices and
managed by their trained database staff.
• No adjustment to assay data results was made
outside the standard XRD and XRF calibration
software beingused.
Location of
data points		 Accuracy and quality of surveys used
to locate drillholes (collar and down-
hole surveys), trenches, mine
workings and other locations used in
Mineral Resource estimation.
Specification of the grid system used.
Quality and adequacy of topographic
control.		 • Hole collar locations were determined with DGPS,
accurate to within centimetres.
• Down hole surveys for very shallow vertical holes
are not required.
• WGS 84 datum and UTM/zone 34S coordinate
system is used.
• Topographical control is highly problematic due to
constant changes in surface levels after daily high
tides and storm events.
Data
spacing and
distribution		 Data spacing for reporting of
exploration results.
Whether the data spacing and
distribution are sufficient to establish
the degree of geological and grade
continuity appropriate for the Mineral
Resource and Ore Reserve
estimation procedure(s) and
classifications applied.
Whether sample compositing has
been applied.		 • Target drillhole spacing is 50m x 20m, subject to
beach access due to tides.
• Provided there are no significant issues with data
quality, density etc. a 50m x 20m drill spacing is
sufficient to classify the resource as Measured.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 31

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023 28 April 2023
Commentary
• Geological structure is neither relevant nor
applicable to an active placer beach sand deposit.
• Vertical drilling intersects sub-horizontal strata.
• Orientation of the drillholes will not result in sampling
bias.
• All sample bag numbers were logged against the
drillhole by the site geologist. Bagged samples were
labelled, zip-tied and transported to the laboratory.
• No external audits of sampling or the laboratory have
occurred recently.
Criteria JORC Code Explanation Commentary
Orientation
of data in
relation to
geological
structure		 Whether the orientation of sampling
achieves
unbiased
sampling
of
possible structures and the extent to
which this is known, considering the
deposit type.
If the relationship between the drilling
orientation and the orientation of key
mineralised structures is considered
to have introduced a sampling bias,
this should be assessed and
reported if material.		 • Geological structure is neither relevant nor
applicable to an active placer beach sand deposit.
• Vertical drilling intersects sub-horizontal strata.
• Orientation of the drillholes will not result in sampling
bias.
Sample
security		 The measures taken to ensure sample
security.		 • All sample bag numbers were logged against the
drillhole by the site geologist. Bagged samples were
labelled, zip-tied and transported to the laboratory.
Audits or
reviews		 The results of any audits or reviews of
sampling techniques and data.		 • No external audits of sampling or the laboratory have
occurred recently.
Criteria JORC Code Explanation Commentary
Mineral
tenement and
land tenure
status		 Type, reference name/number,
location and ownership including
agreements or material issues
with third parties such as joint
ventures, partnerships, overriding
royalties, native title interests,
historical sites, wilderness or
national park and environmental
settings.
The security of the tenure held at
the time of reporting along with
any known impediments to
obtaining a licence to operate in
the area.		 • The area has a granted Prospecting Right (WC
30/5/1/1/2/10261PR) owned by Mineral Sands
Resources (Pty) Ltd, a subsidiary of ASX listed
Mineral Commodities Ltd (ASX: MRC).
• This Prospecting Right incorporates a semi-
continuous tenement approximately 23km in length,
covering an area of 398 hectares of beach sands,
between the high-water mark and the low-water
mark of the coastal beaches’ areas adjacent to
neighbouring farms (Graauwduinen 152, remainder
of Waterbak and portions of farm Klipvley Karookop
153).
• The Prospecting Right was granted, executed, and
registered with the South African Department of
Mineral Resources and Energy (“DMRE”) in January
2020.
• Expanded Mining Right (162&163EM)
encompassing the Northern Beaches and Inland
Strand expansion project was approved by the
Department of Mineral Resources - South Africa on
30 June 2020.
Exploration
done by other
parties		 Acknowledgment and appraisal of
exploration by other parties.		 • The general area has been investigated and mined
for heavy mineral deposits as far back as the 1930s
(Haughton, 1931). Subsequent geological surveys
and exploration programs investigated the
distribution, mineralogy, and economic potential of
the heavy mineral sands along the coastline of
Geelwal Karoo (Toerien & Groeneveld 1957, Abele

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 32

ASX: MRC ASX: MRC 28 April 2023

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
1989, Swart 1990,
• Barnes 1998) and Trans Hex 1989-1991).
• The feasibility study produced by Trans Hex in June
1992 included a defined Inferred mineral resource
(non JORC).
• Deposit is a heavy mineral sand deposit located on
an active placer beach strandline undergoing
continues erosion, deposition and replenishment from
oceanic storm and wave activity.
• The minimum hole depth is 1m and the maximum
depth 4m.
• Drilling is generally between low-tide and high-tide
marks.
• East collar ranges – 777,551mE to 782,488mE.
• North collar ranges – 6,519,350mN to 6,526,091mN.
• Exploration results are not being reported.
Criteria JORC Code Explanation Commentary
1989, Swart 1990,
• Barnes 1998) and Trans Hex 1989-1991).
• The feasibility study produced by Trans Hex in June
1992 included a defined Inferred mineral resource
(non JORC).
Geology Deposit type, geological setting
and style of mineralisation.		 • Deposit is a heavy mineral sand deposit located on
an active placer beach strandline undergoing
continues erosion, deposition and replenishment from
oceanic storm and wave activity.
Drill hole
Information		 A summary of all information
material to the understanding of
the exploration results including a
tabulation of the following
information for all Material drill
holes:
Easting and northing of the drill
hole collar
elevation or RL (Reduced Level –
elevation above sea level in
metres) of the drill hole collar
dip and azimuth of the hole
down hole length and interception
depth
hole length.
If the exclusion of this information
is justified on the basis that the
information is not Material and
this exclusion does not detract
from the understanding of the
report, the Competent Person
should clearly explain why this is
the case.		 • The minimum hole depth is 1m and the maximum
depth 4m.
• Drilling is generally between low-tide and high-tide
marks.
• East collar ranges – 777,551mE to 782,488mE.
• North collar ranges – 6,519,350mN to 6,526,091mN.
Data
aggregation
methods		 In reporting Exploration Results,
weighting averaging techniques,
maximum and/or minimum grade
truncations (eg cutting of high
grades) and cut-off grades are
usually Material and should be
stated.
Where aggregate intercepts
incorporate short lengths of high
grade results and longer lengths
of low grade results, the
procedure used for such
aggregation should be stated and
some typical examples of such
aggregations should be shown in
detail.
The assumptions used for any		 • Exploration results are not being reported.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 33

ASX: MRC ASX: MRC 28 April 2023

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Mineralisation is enriched sedimentary layers semi-
parallel to the bedrock contact and beach slope
angle.
• Mineralisation is essentially flat laying, and as such,
vertical drillholes represent true width.
• Mineralisation from surface to bedrock is mined with
no vertical selectivity.
• In plan view blocks estimated to be above 2% THM
content are mined.
• Significant intersections are not being reported.
• Maps, sections and plan view are provided in the
resource report.
• Exploration results are not being reported.
• The resource is progressively lowering in grade and
volume as replenishment has been slower than the
mining rate.
• Offshore sampling to determine the source of grade
replenishment is planned.
Criteria JORC Code Explanation Commentary
reporting of metal equivalent
values should be clearly stated.
Relationship
between
mineralisation
widths and
intercept
lengths		 These relationships are
particularly important in the
reporting of Exploration Results.
If the geometry of the
mineralisation with respect to the
drill hole angle is known, its
nature should be reported.
If it is not known and only the
down hole lengths are reported,
there should be a clear statement
to this effect (eg ‘down hole
_length, true width not known’). _		 • Mineralisation is enriched sedimentary layers semi-
parallel to the bedrock contact and beach slope
angle.
• Mineralisation is essentially flat laying, and as such,
vertical drillholes represent true width.
• Mineralisation from surface to bedrock is mined with
no vertical selectivity.
• In plan view blocks estimated to be above 2% THM
content are mined.
Diagrams Appropriate maps and sections
(with scales) and tabulations of
intercepts should be included for
any significant discovery being
reported These should include,
but not be limited to a plan view of
drill hole collar locations and
appropriate sectional views.		 • Significant intersections are not being reported.
• Maps, sections and plan view are provided in the
resource report.
Balanced
reporting		 Where comprehensive reporting of
all Exploration Results is not
practicable, representative
reporting of both low and high
grades and/or widths should be
practiced to avoid misleading
reporting of Exploration Results.		 • Exploration results are not being reported.
Other
substantive
exploration
data		 Other exploration data, if
meaningful and material, should
be reported including (but not
limited to): geological
observations; geophysical survey
results; geochemical survey
results; bulk samples – size and
method of treatment; metallurgical
test results; bulk density,
groundwater, geotechnical and
rock characteristics; potential
deleterious or contaminating
substances.		 • The resource is progressively lowering in grade and
volume as replenishment has been slower than the
mining rate.
Further work The nature and scale of planned
further work (eg tests for lateral
extensions or depth extensions or
large-scale step-out drilling).
Diagrams clearly highlighting the
areas of possible extensions,
including the main geological
interpretations and future drilling
areas, provided this information is
not commercially sensitive.		 • Offshore sampling to determine the source of grade
replenishment is planned.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 34

ASX: MRC ASX: MRC

28 April 2023

Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in the preceding sections also apply to this section)

==> picture [121 x 112] intentionally omitted <==
Criteria JORC Code Explanation Commentary
Database
integrity		 Measures taken to ensure that
data has not been corrupted by,
for example, transcription or
keying errors, between its initial
collection and its use for Mineral
Resource estimation purposes.
Data validation procedures used.		 • The data was plotted, and plots were as expected with no
misplots or extraneous data found. Maximum and
minimum values and average values were all within the
norm.
• Data is stored in an offsite database hosted by Maxwell
Geoservices.
Site visits Comment on any site visits
undertaken by the Competent
Person and the outcome of
those visits.
If no site visits have been
undertaken indicate why this is
the case.		 • The previous Competent Person was a full-time employee
of Mineral Commodities Ltd. However, the new Competent
Person as of 2022 has not had sufficient time to visit site. A
site visit is planned for 2023.
Geological
interpretation		 Confidence in (or conversely,
the uncertainty of) the
geological interpretation of the
mineral deposit.
Nature of the data used and of
any assumptions made.
The effect, if any, of alternative
interpretations on Mineral
Resource estimation.
The use of geology in guiding
and controlling Mineral
Resource estimation.
The factors affecting continuity
both of grade and geology.		 • Deposit is a heavy mineral sand deposit located on an
active placer beach strandline undergoing continues
erosion, deposition and replenishment from oceanic storm
and wave activity.
• The deposit is vertically constrained by topography and the
base of drilling. Topography is surveyed at or close to the
time of drilling and the base of the domain is assumed to
be the end of hole depths.
• Most of the deposit is constrained shoreward by the low
water mark with a 10m standoff and landward by a 10m
standoff from cliffs and dunes. The exception to this is
680k of resource from Beach 10 which is located under
dunes.
• Grade continuity is influenced by wave action and hence is
best parallel to the beachfront.
• Some sorting of the heavy minerals occurs based on
density i.e., minerals with similar density tend to be
spatiallyassociated.
Dimensions The extent and variability of the
Mineral Resource expressed as
length (along strike or
otherwise), plan width, and
depth below surface to the
upper and lower limits of the
Mineral Resource.		 • The deposit has a strike length along the coastline of
approximately 10,850m with individual beaches generally
separated by rocky headlands/rocky beaches which
cannot be mined.
• The deposit has an average width from the dunes to within
the surf zone of 150m. It is developed from surface to a
maximum depth of 4m and the average resource thickness
is approximately 2.5m. The deposit occurs from the
surface down.
Estimation and
modelling
techniques		 The nature and appropriateness
of the estimation technique(s)
applied and key assumptions,
including treatment of extreme
grade values, domaining,
interpolation parameters and		 • Leapfrog, MinePlan and Isatis. Neo software were used to
domain and estimate each of the valuable heavy minerals
as well as the THM. Meshes were created from the
topographic surveys (upper surfaces) and the base of
drillholes (lower surfaces). The topographic surveys are
restricted to the mineable area and therefore domains do

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 35

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
not extend outside this.
• No internal domaining of the beach sands is practical or
applicable.
• Seven beaches have been modelled.
• Of the seven beaches only beaches four and nine have
outlier restrictions and these restrictions have had minimal
impact.
• Ordinary Kriging was used as the primary estimator which
is suitable for the beach sands given that the
mineralisation is diffusive in nature (this still needs to be
verified via the relevant statistics).
• Kriging by its nature will smooth the estimates however,
there is no vertical mining selectivity (besides stopping at
the base of beach sand) and horizontal selectivity is
somewhat limited.
• Discretization of 4 x 4 x 1 which relates to a parent block
size of 10m x 10m x 1m. Sub-blocking is down to 5m x 5m
x 1m. The parent block size is about half the across strike
drill spacing and 1/5th the along strike spacing.
• Searches are horizontal with maximum continuity parallel
to each beach (500m x 100m x 16m). Kriging used a
minimum of 6 samples and a maximum of 16. Typical drill
spacing is 50m x 20m however, extrapolation can be up to
several hundred meters. In all estimated areas mineable
beach is present (providing THM is greater than 2%).
• The search for a given beach is identical for each variable.
This is to maintain the correlations between variables.
• There are no deleterious variables. The THM content
excludes slimes and oversize because these fractions will
not be recovered during processing. All estimated
variables form part of the THM fraction, which is
recoverable. However, the estimates of the individual
variables are in situ and not necessarily 100% recoverable.
This is because the grade variables are estimated via XRD
not magnetic and gravity separation.
• Check estimates were made for all variables and beaches.
These estimates were nearest neighbor and inverse
distance squared.
• All estimates were validated against the check estimates
and input data both visuallyand statistically.
• The resource tonnages are estimated on a dry basis. Mined
material is wet and fully saturated when mined out, but it is
free draining when stockpiled.
• Reported resource is based on a 2% THM cut-off grade
because this is the current minimum grade for which there
is a reasonable expectation for eventual economic
extraction.
Criteria JORC Code Explanation Commentary
maximum distance of
extrapolation from data points. If
a computer assisted estimation
method was chosen, include a
description of computer
software and parameters used.
The availability of check
estimates, previous estimates
and/or mine production records
and whether the Mineral
Resource estimate takes
appropriate account of such
data.
The assumptions made
regarding recovery of by-
products.
Estimation of deleterious
elements or other non-grade
variables of economic
significance (eg sulphur for acid
mine drainage characterisation).
In the case of block model
interpolation, the block size in
relation to the average sample
spacing and the search
employed.
Any assumptions behind
modelling of selective mining
units.
Any assumptions about
correlation between variables.
Description of how the
geological interpretation was
used to control the resource
estimates.
Discussion of basis for using or
not using grade cutting or
capping.
The process of validation, the
checking process used, the
comparison of model data to
drill hole data, and use of
reconciliation data if available.		 not extend outside this.
• No internal domaining of the beach sands is practical or
applicable.
• Seven beaches have been modelled.
• Of the seven beaches only beaches four and nine have
outlier restrictions and these restrictions have had minimal
impact.
• Ordinary Kriging was used as the primary estimator which
is suitable for the beach sands given that the
mineralisation is diffusive in nature (this still needs to be
verified via the relevant statistics).
• Kriging by its nature will smooth the estimates however,
there is no vertical mining selectivity (besides stopping at
the base of beach sand) and horizontal selectivity is
somewhat limited.
• Discretization of 4 x 4 x 1 which relates to a parent block
size of 10m x 10m x 1m. Sub-blocking is down to 5m x 5m
x 1m. The parent block size is about half the across strike
drill spacing and 1/5th the along strike spacing.
• Searches are horizontal with maximum continuity parallel
to each beach (500m x 100m x 16m). Kriging used a
minimum of 6 samples and a maximum of 16. Typical drill
spacing is 50m x 20m however, extrapolation can be up to
several hundred meters. In all estimated areas mineable
beach is present (providing THM is greater than 2%).
• The search for a given beach is identical for each variable.
This is to maintain the correlations between variables.
• There are no deleterious variables. The THM content
excludes slimes and oversize because these fractions will
not be recovered during processing. All estimated
variables form part of the THM fraction, which is
recoverable. However, the estimates of the individual
variables are in situ and not necessarily 100% recoverable.
This is because the grade variables are estimated via XRD
not magnetic and gravity separation.
• Check estimates were made for all variables and beaches.
These estimates were nearest neighbor and inverse
distance squared.
• All estimates were validated against the check estimates
and input data both visuallyand statistically.
Moisture Whether the tonnages are
estimated on a dry basis or with
natural moisture, and the
method of determination of the
moisture content.		 • The resource tonnages are estimated on a dry basis. Mined
material is wet and fully saturated when mined out, but it is
free draining when stockpiled.
Cut-off
parameters		 The basis of the adopted
cut-off grade(s) or quality
parameters applied.		 • Reported resource is based on a 2% THM cut-off grade
because this is the current minimum grade for which there
is a reasonable expectation for eventual economic
extraction.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 36

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==
Criteria JORC Code Explanation Commentary
• The proportion of the VHM within the THM varies and a
cut-off based on VHM would be more accurate. MRC plan
to move to a VHM cut-off for external reporting of
resources.
Mining factors
or assumptions		 Assumptions made regarding
possible mining methods,
minimum mining dimensions
and internal (or, if applicable,
external) mining dilution. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider potential mining
methods, but the assumptions
made regarding mining methods
and parameters when
estimating Mineral Resources
may not always be rigorous.
Where this is the case, this
should be reported with an
explanation of the basis of the
mining assumptions made.		 • The dynamic beach environment results in a cyclic process
of deposition on and erosion of the beach surface.
Historical studies by Trans Hex have found a weighted
average change over 9 months of up to ~9% loss or up to
~7% increase. This variability is also evident in the
replenishment rate and grade of material observed.
• Opencast mining. The pits generally only remain open
during low tide, except where beach conditions allow
larger, more stable protective bunding to be constructed.
• There is no stripping as mining starts at the surface.
• Natural replenishment of the resource is taking place as
the open pits are filled with HMS material from the surf
zone during the next high tide.
• In general, it appears that replenishment is mostly
associated with winter storms when the sea brings sand
from the nearshore and offshore areas. Replenishment is
also a function of time and the number of sea storm
events. Given enough time between mining events, the
resource is still replenishing, although the long-term trend
is a significant lowering in grade.
• The overall lowering of the beach surface (due to mining)
has resulted in the faster movement of large volumes of
material between the beach and the surf zone than before
miningstarted.
Metallurgical
factors or
assumptions		 The basis for assumptions or
predictions regarding
metallurgical amenability. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider potential metallurgical
methods, but the assumptions
regarding metallurgical
treatment processes and
parameters made when
reporting Mineral Resources
may not always be rigorous.
Where this is the case, this
should be reported with an
explanation of the basis of the
metallurgical assumptions made		 • Metallurgical factors have been taken from the current
processing plant.
• The Northern Beaches have been successfully mined and
the valuable minerals recovered. There are no doubts
about the metallurgical suitability of the Northern Beaches
material.
Environmental
factors or
assumptions		 Assumptions made regarding
possible waste and process
residue disposal options. It is
always necessary as part of the
process of determining
reasonable prospects for		 • For most of the resource there are no environmental
factors likely to stop mining. There is a 10m stability buffer
zone between the coastal cliffs (sand dunes) and the
beach where no mining is allowed. The exception to this is
680k of resource from Beach 10 which is located under

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 37

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
dunes. Pending results from environmental studies an
application will be made with the mines department to be
able to mine this material.
• Currently all mining voids get naturally filled with beach
sand material during high tide and therefore there is no
rehabilitation liability in this regard.
• Tailings get dumped onto the beach where they are
distributed and settled along the coastline under natural
wave and sea current action. There are no pollutants
introduced with the tailings and the material is inert.
• The bulk density is based on a calculation of the specific
gravity of the silica and heavy mineral content fractions of
each sample. It is therefore not fixed and fluctuates
between
• 1.66 and 2.19 as per the formula: SG=1.65+(0.009 x HM).
• Bulk density measurements (compacted and
uncompacted) are conducted for approximately every 20th
sample by the internal laboratory. However, these
measurements do not necessarily represent in situ density.
• Density should be measured by excavating a known
volume, drying the sample and weighing it. THM content
should also be measured so density can be calculated.
• The Mineral Resources have been classified as Indicated,
and Inferred categories, in accordance with the 2012
Australasian Code for Reporting of Mineral Resources and
Ore Reserves (JORC Code).
• No deleterious minerals are known.
• Drillhole spacing:
o
Areas with drillhole spacing at the target spacing of
50m x 20m have been classified as Indicated.
o
All other areas classified as Inferred.
• The resource has been classified based on the data
available at what is effectively a “snapshot” in time with
surveying, drilling and sampling occurring over a short time
period of several months. As soon as the deposit is
surveyed and sampled it will be changingdue to
Criteria JORC Code Explanation Commentary
eventual economic extraction to
consider the potential
environmental impacts of the
mining and processing
operation. While at this stage the
determination of potential
environmental impacts,
particularly for a greenfield
project, may not always be well
advanced, the status of early
consideration of these potential
environmental impacts should
be reported. Where these
aspects have not been
considered, this should be
reported with an explanation of
the environmental assumptions
made.		 dunes. Pending results from environmental studies an
application will be made with the mines department to be
able to mine this material.
• Currently all mining voids get naturally filled with beach
sand material during high tide and therefore there is no
rehabilitation liability in this regard.
• Tailings get dumped onto the beach where they are
distributed and settled along the coastline under natural
wave and sea current action. There are no pollutants
introduced with the tailings and the material is inert.
Bulk density Whether assumed or
determined. If assumed, the
basis for the assumptions. If
determined, the method used,
whether wet or dry, the
frequency of the measurements,
the nature, size and
representativeness of the
samples.
The bulk density for bulk
material must have been
measured by methods that
adequately account for void
spaces (vugs, porosity, etc),
moisture and differences
between rock and alteration
zones within the deposit.
Discuss assumptions for bulk
density estimates used in the
evaluation process of the
different materials.		 • The bulk density is based on a calculation of the specific
gravity of the silica and heavy mineral content fractions of
each sample. It is therefore not fixed and fluctuates
between
• 1.66 and 2.19 as per the formula: SG=1.65+(0.009 x HM).
• Bulk density measurements (compacted and
uncompacted) are conducted for approximately every 20th
sample by the internal laboratory. However, these
measurements do not necessarily represent in situ density.
• Density should be measured by excavating a known
volume, drying the sample and weighing it. THM content
should also be measured so density can be calculated.
Classification The basis for the classification of
the Mineral Resources into
varying confidence categories.
Whether appropriate account
has been taken of all relevant
factors (ie relative confidence in
tonnage/grade estimations,
reliability of input data,
confidence in continuity of
geology and metal values,
quality, quantity and distribution
of the data).
Whether the result appropriately
reflects the Competent Person’s
view of the deposit.		 • The Mineral Resources have been classified as Indicated,
and Inferred categories, in accordance with the 2012
Australasian Code for Reporting of Mineral Resources and
Ore Reserves (JORC Code).
• No deleterious minerals are known.
• Drillhole spacing:
o
Areas with drillhole spacing at the target spacing of
50m x 20m have been classified as Indicated.
o
All other areas classified as Inferred.
• The resource has been classified based on the data
available at what is effectively a “snapshot” in time with
surveying, drilling and sampling occurring over a short time
period of several months. As soon as the deposit is
surveyed and sampled it will be changingdue to

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 38

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
tides/storm activity either removing or adding resource.
Overall, the resource is expected to replenish (VHM
increase) over time providing mining is paused. The
Competent Person considers it essential that every time
the resource is presented externally that a footnote
describing the dynamic nature of the resource be included.
• The author is confident that all relevant factors have been
considered and the classification reflects his views.
• The resource has not been internally or externally
reviewed.
• Accuracy/ confidence of the resource has not been
assessed via methods such as estimation variance or
conditional simulation studies. A simple estimation
variance study would be worthwhile however the greatest
uncertainty is still the dynamic nature of tides adding ore
removing resource over time.
• Resource replenishment after mining is continuously
monitored and is relatively predictable.
Criteria JORC Code Explanation Commentary
tides/storm activity either removing or adding resource.
Overall, the resource is expected to replenish (VHM
increase) over time providing mining is paused. The
Competent Person considers it essential that every time
the resource is presented externally that a footnote
describing the dynamic nature of the resource be included.
• The author is confident that all relevant factors have been
considered and the classification reflects his views.
Audits or
reviews		 The results of any audits or
reviews of Mineral Resource
estimates.		 • The resource has not been internally or externally
reviewed.
Discussion of
relative
accuracy/
confidence		 Where appropriate, a statement
of the relative accuracy and
confidence level in the Mineral
Resource estimate using an
approach or procedure deemed
appropriate by the Competent
Person. For example, the
application of statistical or
geostatistical procedures to
quantify the relative accuracy of
the resource within stated
confidence limits, or, if such an
approach is not deemed
appropriate, a qualitative
discussion of the factors that
could affect the relative
accuracy and confidence of the
estimate.
The statement should specify
whether it relates to global or
local estimates, and, if local,
state the relevant tonnages,
which should be relevant to
technical and economic
evaluation. Documentation
should include assumptions
made and theprocedures used.		 • Accuracy/ confidence of the resource has not been
assessed via methods such as estimation variance or
conditional simulation studies. A simple estimation
variance study would be worthwhile however the greatest
uncertainty is still the dynamic nature of tides adding ore
removing resource over time.
• Resource replenishment after mining is continuously
monitored and is relatively predictable.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 39

ASX: MRC ASX: MRC

28 April 2023

JORC TABLE 1 Western Strandline Section 1 Sampling Techniques and Data

==> picture [121 x 112] intentionally omitted <==

(Criteria in this section apply to all succeeding sections)

Criteria JORC Code Explanation Commentary
Sampling
techniques		 Nature and quality of sampling (eg
cut channels, random chips, or
specific specialised industry standard
measurement tools appropriate to
the minerals under investigation,
such as down hole gamma sondes,
or handheld XRF instruments, etc).
These examples should not be taken
as limiting the broad meaning of
sampling.
Include reference to measures taken
to ensure sample representivity and
the appropriate calibration of any
measurement tools or systems used.
Aspects of the determination of
mineralisation that are Material to the
Public Report. In cases where
‘industry standard’ work has been
done this would be relatively simple
(eg ‘reverse circulation drilling was
used to obtain 1m samples from
which 3kg was pulverised to produce
a 30g charge for fire assay’). In other
cases, more explanation may be
required, such as where there is
coarse gold that has inherent
sampling problems. Unusual
commodities or mineralisation types
(eg submarine nodules) may warrant
disclosure of detailed information.		 • The current resource database consists of 507
aircore holes and 2 sonic holes, representing
13,251m of vertical drilling, and their analytical data.
• Sample taken from surface to bedrock.
• Mineralogical studies and grade testwork undertaken
according to mine control standards within Tormin
mine site laboratory.
• Sampled exclusively by vertical holes.
• One-metre air core drill samples from a cyclone were
collected in 20-25kg plastic bags.
• Each bag was riffle split into two pre-numbered calico
bags of ~5kg each and the remainder of the samples
collected in a large plastic bag.
• 5kg samples were submitted directly to the Tormin
mine laboratory to be analysed for oversize, slimes,
and heavy minerals.
• The laboratory sample was dried, de-slimed (removal
of -45 micron fraction) and screen (+2mm oversize).
• 200g of sample split to use for heavy liquid
separation using Bromoform with density range
between 2.92 and 2.96g/ml to define THM content.
Drilling
techniques		 Drill type (eg core, reverse
circulation, open-hole hammer,
rotary air blast, auger, Banka, sonic,
etc) and details (eg core diameter,
triple or standard tube, depth of
diamond tails, face- sampling bit or
other type, whether core is oriented
_and if so, by what method, etc). _		 • Air core drilling was used. Air core drilling is
considered a standard industry drilling method for
HMS mineralisation.
• 78mm and 85mm drill bits and rods were used.
• Two sonic holes by wide barrel (137mm) drilled.
• All holes were drilled vertically.
Drill sample
recovery		 Method of recording and assessing
core and chip sample recoveries and
results assessed.
Measures taken to maximise sample
recovery and ensure representative
nature of the samples.
Whether a relationship exists
between sample recovery and grade
and whether sample bias may have		 • Metric samples from aircore drill were taken and
riffled down to a representative sample for heavy
liquid separation and XRD.
• No sample loss or cavitation were experienced. Dry
samples may lose some of their slimes fraction due
to blowing out of sampling equipment, however HM
are not affected.
• Sample recovery was excellent.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 40

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• The aircore and sonic drilling provide high quality
samples from the face of the drill hole.
• Each hole was logged by a geologist on pre-printed
log sheets, transcribed to excel and transferred to a
cloud hosted geological database
• Geological and lithological observations per depth
were recorded together with field sections and hand
drawn down-the-hole logs.
• Special attention was given to heavy minerals
intersected as a guide to potential marine strandlines
and marine diamond deposits.
• Percentage HMS was recorded from visual
observations as well as the magnetic content of each
metre by handheld pen magnet.
• Marine gravels and contact with basement bedrock
recorded as maximum depth of mineralisation.
• Each 1m sample was washed and sieved to obtain a
representative sample stored in numbered chiptrays.
• Sampling over 1m down the hole intervals as
determined by 1m marks on the rig mast.
• Drill samples were riffle split into approximately 3kg
samples to be assayed.
• All samples were dry.
• Technicians undertaking the splitting were supervised
by mine site geologists to ensure sampling quality.
• The sample sizes were considered suitable, based
on industry practices of mineral sand exploration.
• Field duplicate samples were riffled for the Tormin
mine laboratory and external QA/QC checks for
every 25th sample
• Lab duplicate samples were split for the Tormin mine
laboratory and for external QA/QC checks.
• All sample analyses were undertaken by the Tormin
mine laboratory.
• The mine owns and operates a state of the art heavy
liquid separation (HLS) lab using bromoform with
density range between 2.92 and 2.96g/ml with
Panalytical XRD machines (the Rietveld method after
HLS in an automated mode setup). All grades
reported are from XRD results on heavy liquid sink.
• Industrial laboratory XRF machines (Panalytical
Epsilon 3 ED) are used by Tormin mine as a grade
verification check on the XRD zircon content.
Criteria JORC Code Explanation Commentary
occurred due to preferential loss/gain
of fine/coarse material.		 • The aircore and sonic drilling provide high quality
samples from the face of the drill hole.
Logging Whether core and chip samples have
been geologically and geotechnically
logged to a level of detail to support
appropriate Mineral Resource
estimation, mining studies and
metallurgical studies.
Whether logging is qualitative or
quantitative in nature. Core (or
costean, channel, etc) photography.
The total length and percentage of
the relevant intersections logged.		 • Each hole was logged by a geologist on pre-printed
log sheets, transcribed to excel and transferred to a
cloud hosted geological database
• Geological and lithological observations per depth
were recorded together with field sections and hand
drawn down-the-hole logs.
• Special attention was given to heavy minerals
intersected as a guide to potential marine strandlines
and marine diamond deposits.
• Percentage HMS was recorded from visual
observations as well as the magnetic content of each
metre by handheld pen magnet.
• Marine gravels and contact with basement bedrock
recorded as maximum depth of mineralisation.
• Each 1m sample was washed and sieved to obtain a
representative sample stored in numbered chiptrays.
Sub-
sampling
techniques
and sample
preparation		 If core, whether cut or sawn and
whether quarter, half or all core taken.
If non-core, whether riffled, tube
sampled, rotary split, etc and
whether sampled wet or dry.
For all sample types, the nature,
quality, and appropriateness of the
sample preparation technique.
Quality control procedures adopted
for all sub-sampling stages to
maximise representivity of samples.
Measures taken to ensure that the
sampling is representative of the in
situ material collected, including for
instance results for field
duplicate/second-half sampling.
Whether sample sizes are
appropriate to the grain size of the
material being sampled.		 • Sampling over 1m down the hole intervals as
determined by 1m marks on the rig mast.
• Drill samples were riffle split into approximately 3kg
samples to be assayed.
• All samples were dry.
• Technicians undertaking the splitting were supervised
by mine site geologists to ensure sampling quality.
• The sample sizes were considered suitable, based
on industry practices of mineral sand exploration.
• Field duplicate samples were riffled for the Tormin
mine laboratory and external QA/QC checks for
every 25th sample
• Lab duplicate samples were split for the Tormin mine
laboratory and for external QA/QC checks.
Quality of
assay data
and
laboratory
tests		 The nature, quality and
appropriateness of the assaying and
laboratory procedures used and
whether the technique is considered
partial or total.
For geophysical tools,
spectrometers, handheld XRF
instruments, etc, the parameters
used in determining the analysis
including instrument make and
model, reading times, calibrations
factors applied and their derivation,		 • All sample analyses were undertaken by the Tormin
mine laboratory.
• The mine owns and operates a state of the art heavy
liquid separation (HLS) lab using bromoform with
density range between 2.92 and 2.96g/ml with
Panalytical XRD machines (the Rietveld method after
HLS in an automated mode setup). All grades
reported are from XRD results on heavy liquid sink.
• Industrial laboratory XRF machines (Panalytical
Epsilon 3 ED) are used by Tormin mine as a grade
verification check on the XRD zircon content.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 41

ASX: MRC ASX: MRC 28 April 2023

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• The Tormin mine laboratory completes its own
internal QA/QC using Certified Reference Material
(“CRM”) at the rate of approximately 1 in 50 and
sending every 25th sample to the external labs for
independent check analysis.
• 271 field duplicates plus 80 blank samples, and 56
CRMs were included into the sample stream and
submitted to the lab.
• The CRMs, blank and duplicate sample results are
within accepted limits.
• External sampling checks for XRD have been done
by XRD Analytical and Consulting (398 samples) and
UIS Analytical Services (20 samples) and for XRF in
Mintek and UIS Analytical Services (10 samples
each), accredited laboratories in Pretoria and
Johannesburg. Also,10 samples have been assayed in
Mintek and UIS Analytical Services by ICP-MS for
trace elements and REEs.
• The adopted QA/QC protocols are appropriate for the
Mineral Resource and public reporting and QA/QC
system returning acceptable results.
• QEMSCAN testwork on 18 composite samples by
SGS, ALS and SJT MetMin was used for verification
of the mineral assemblage and the component
mineralogy as well as grain size distribution and
HMS particle size.
• Additionally, optical microscopy grain counting was
used to confirm heavy mineral assemblage on 4
composite samples.
• No geophysical tools or handheld instruments were
utilised in the sample analysis.
• All sampling was undertaken by mine site personnel
overseen by a qualified and experienced mine
geologist and independent consultants.
• All sample preparation was carried out by qualified
staff, supervised by chemists and the laboratory
manager.
• The lab results and logging have been reviewed by
external consultants to MSR as well as internally by
MRC’s exploration manager.
• 10 twinned holes were drilled in different fence lines
to assess stationarity.
• 48 holes (1,192m) from historical drilling were
verified and included into the resource model.
• The drillhole logs have been converted to
electronically stored formats and stored in a
database provided by Maxgeo (DataShed). This
database is hosted on an offsite server supplied by
Maxgeo and managed bytheir trained database
Criteria JORC Code Explanation Commentary
etc.
Nature of quality control procedures
adopted (eg standards, blanks,
duplicates, external laboratory
checks) and whether acceptable
levels of accuracy (ie lack of bias) and
precision have been established.		 • The Tormin mine laboratory completes its own
internal QA/QC using Certified Reference Material
(“CRM”) at the rate of approximately 1 in 50 and
sending every 25th sample to the external labs for
independent check analysis.
• 271 field duplicates plus 80 blank samples, and 56
CRMs were included into the sample stream and
submitted to the lab.
• The CRMs, blank and duplicate sample results are
within accepted limits.
• External sampling checks for XRD have been done
by XRD Analytical and Consulting (398 samples) and
UIS Analytical Services (20 samples) and for XRF in
Mintek and UIS Analytical Services (10 samples
each), accredited laboratories in Pretoria and
Johannesburg. Also,10 samples have been assayed in
Mintek and UIS Analytical Services by ICP-MS for
trace elements and REEs.
• The adopted QA/QC protocols are appropriate for the
Mineral Resource and public reporting and QA/QC
system returning acceptable results.
• QEMSCAN testwork on 18 composite samples by
SGS, ALS and SJT MetMin was used for verification
of the mineral assemblage and the component
mineralogy as well as grain size distribution and
HMS particle size.
• Additionally, optical microscopy grain counting was
used to confirm heavy mineral assemblage on 4
composite samples.
• No geophysical tools or handheld instruments were
utilised in the sample analysis.
Verification
of sampling
and
assaying		 The
verification
of significant
intersections by either independent or
alternative company personnel.
The use of twinned holes.
Documentation of primary data,
data entry procedures, data
verification, data storage (physical
and electronic) protocols.
Discuss any adjustment to assay
data.		 • All sampling was undertaken by mine site personnel
overseen by a qualified and experienced mine
geologist and independent consultants.
• All sample preparation was carried out by qualified
staff, supervised by chemists and the laboratory
manager.
• The lab results and logging have been reviewed by
external consultants to MSR as well as internally by
MRC’s exploration manager.
• 10 twinned holes were drilled in different fence lines
to assess stationarity.
• 48 holes (1,192m) from historical drilling were
verified and included into the resource model.
• The drillhole logs have been converted to
electronically stored formats and stored in a
database provided by Maxgeo (DataShed). This
database is hosted on an offsite server supplied by
Maxgeo and managed bytheir trained database

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 42

ASX: MRC ASX: MRC 28 April 2023

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
staff.
• No adjustments to assay data results were made
outside the standard XRD and XRF calibration
software beingused.
• Hole collars were surveyed by DGPS accurate to
within +/- 100 millimeters by mine surveyors.
• Down hole surveys for shallow vertical air core holes
are not required.
• WGS 84 datum and UTM/ zone 34S coordinate
system is used.
• Systematic grade spacing used in the drilling
program was 250m x 20m containing 30 fence lines.
• Each drillhole is spaced 20m apart along each
drill line perpendicular to the strandline inferred
strike.
• The above-mentioned drill fence line is 250m
apart along the strandline strike.
• infill fence lines with 500m x 25m and 250m x 25m
grade were drilled between the primary lines.
• 16 holes from historical drilling were verified and
included in the resource model.
• 10 twinned holes were drilled in different fence lines.
• Vertical drilling to intersect sub-horizontal strata.
• Orientation of the drillholes will not result in sampling
bias.
• Sampling was carried out using pre-printed calico
bags to prevent mislabeling.
• All sample bag numbers were logged against the
drillhole by the site geologist.
• Three samples per metre drilled were produced. The
reject was stored securely in a bag farm for reference,
one for external QA/QC use and one was sent directly
to the mine lab at the end of each day’s drilling into a
secure area.
• The Tormin mine laboratory inspected the submitted
samples and did not report any missing, nor any error
of the samples against the sample lists.
• Where external laboratories were used, their chain of
custodycontrols for shippingand sample submission
Criteria JORC Code Explanation Commentary
staff.
• No adjustments to assay data results were made
outside the standard XRD and XRF calibration
software beingused.
Location of
data points		 Accuracy and quality of surveys used
to locate drillholes (collar and down-
hole surveys), trenches, mine
workings and other locations used in
Mineral Resource estimation.
Specification of the grid system used.
Quality and adequacy of topographic
control.		 • Hole collars were surveyed by DGPS accurate to
within +/- 100 millimeters by mine surveyors.
• Down hole surveys for shallow vertical air core holes
are not required.
• WGS 84 datum and UTM/ zone 34S coordinate
system is used.
Data
spacing and
distribution		 Data spacing for reporting of
exploration results.
Whether the data spacing and
distribution are sufficient to establish
the degree of geological and grade
continuity appropriate for the Mineral
Resource and Ore Reserve
estimation procedure(s) and
classifications applied.
Whether sample compositing has
been applied.		 • Systematic grade spacing used in the drilling
program was 250m x 20m containing 30 fence lines.
• Each drillhole is spaced 20m apart along each
drill line perpendicular to the strandline inferred
strike.
• The above-mentioned drill fence line is 250m
apart along the strandline strike.
• infill fence lines with 500m x 25m and 250m x 25m
grade were drilled between the primary lines.
• 16 holes from historical drilling were verified and
included in the resource model.
• 10 twinned holes were drilled in different fence lines.
Orientation
of data in
relation to
geological
structure		 Whether the orientation of sampling
achieves
unbiased
sampling
of
possible structures and the extent to
which this is known, considering the
deposit type.
If the relationship between the drilling
orientation and the orientation of key
mineralised structures is considered
to have introduced a sampling bias,
this should be assessed and
reported if material.		 • Vertical drilling to intersect sub-horizontal strata.
• Orientation of the drillholes will not result in sampling
bias.
Sample
security		 The measures taken to ensure sample
security.		 • Sampling was carried out using pre-printed calico
bags to prevent mislabeling.
• All sample bag numbers were logged against the
drillhole by the site geologist.
• Three samples per metre drilled were produced. The
reject was stored securely in a bag farm for reference,
one for external QA/QC use and one was sent directly
to the mine lab at the end of each day’s drilling into a
secure area.
• The Tormin mine laboratory inspected the submitted
samples and did not report any missing, nor any error
of the samples against the sample lists.
• Where external laboratories were used, their chain of
custodycontrols for shippingand sample submission

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 43

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
were used.
• The lab results and logging have been reviewed
by external consultants to MSR and internally as
part of normal validation processes by MRC.
Criteria JORC Code Explanation Commentary
were used.
Audits or
reviews		 The results of any audits or reviews of
sampling techniques and data.		 • The lab results and logging have been reviewed
by external consultants to MSR and internally as
part of normal validation processes by MRC.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section)

Criteria JORC Code Explanation Commentary
Mineral
tenement and
land tenure
status		 Type, reference name/number,
location and ownership including
agreements or material issues
with third parties such as joint
ventures, partnerships, overriding
royalties, native title interests,
historical sites, wilderness or
national park and environmental
settings.
The security of the tenure held at
the time of reporting along with
any known impediments to
obtaining a licence to operate in
the area.		 • The area has a granted prospecting right (WC
30/5/1/1/2/10262 PR) in the name of Mineral Sands
Resources (Pty) Ltd, a subsidiary of ASX listed
Mineral Commodities Ltd (ASX: MRC).
• This Prospecting Right (Inland Strand) incorporates
an area approximately 12km in length covering 1,741
hectares of coastal area adjacent to the existing
beach mining operations on the Company-owned
farm Geelwal Karoo 262.
• 162 and 163 Expanded Mining Right (WC
30/5/1/2/2/10108 MR) encompassing the Northern
Beaches and Inland Strandline expansion project
was approved by the Department of Mineral
Resources - South Africa on 30 June 2020.
• MSR has been operating successfully in the region
for more than 8 years to date.
Exploration
done by other
parties		 Acknowledgment and appraisal of
exploration by other parties.		 • The general area has been investigated and mined
for heavy mineral deposits as far back as the 1930s
(Haughton, 1931). Subsequent geological surveys
and exploration programs investigated the
distribution, mineralogy, and economic potential of
the heavy mineral sands along the coastline of
Geelwal Karoo (Toerien & Groeneveld 1957, Abele
1989, Swart 1990, Barnes
• 1998) and Trans Hex 1989-1991).
• De Beers drilled 9 fence lines across the property
and bulk sampled the area in the 1960s.
• During 1999, Trans Hex conducted additional
onshore drilling of strandlines and identified the
inland raised beach deposits containing heavy
minerals. Trans Hex subsequently bulk sampled the
material by digging several trenches in 1999-2000.
• Geelwal Karoo Diamante conducted small diameter
forum drilling to a depth of 40m between 2000 and
2002, with a total of 42 drillholes.
• Extensive work, including mining of the inshore

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 44

ASX: MRC ASX: MRC 28 April 2023

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
strandlines along the coast, was undertaken by
Namakwa Diamond Company in 2003-2005. This
work also identified the presence of the Inland
Strand.
• The western coastal plain of South Africa contains a
significant resource of detrital heavy minerals by
world standards.
• The heavy mineral sand deposits occur in a current
active beach environment (eg Tormin mine) as well
as in older palaeo-beach raised strandlines found
inland (inland strandlines) eg Tronox Namakwa
Sands.
• Apart from the mid-Jurassic, Cretaceous and Tertiary
(Paleogene) sediments along the coast, numerous
small fossiliferous, marine, and terrestrial deposits of
Neogene age outcrop along the coastal zone.
• The onshore mineral sands are marine palaeo-
terraces “Inland Strands”, aeolian sands and fluvial
sediments. These targets were formed during
Miocene, Pliocene, and Quaternary/Pleistocene
coastal transgression (sea move inland) and
regression cycles.
• The lithological units of the Western Strandline can
be described as below:
o
Aeolian Sand – non mineralised
o
Red Aeolian Sand – mineralised
o
Silcrete Duricrust/ Dorbank
o
Orange Feldspathic Sand – non
mineralised
o
Orange Feldspathic Sand – mineralised
• Dorbank – mineralised
• Strandline – mineralised
• Base pebble beds – mineralised
• Schist basement
• For purposes of estimation, the lithology has been
grouped into the following:
• Red Aeolian Sand
• Silcrete Duricrust / Dorbank
• Orange Feldspathic Sand
• Main Strandline Mineralisation
• Secondary Perched Strandline Mineralisation
• Gravel
• Basement Schist
• The orebody hosts mineralisation in all geological
units/layers except for the schist basement.
Criteria JORC Code Explanation Commentary
strandlines along the coast, was undertaken by
Namakwa Diamond Company in 2003-2005. This
work also identified the presence of the Inland
Strand.
Geology Deposit type, geological setting
and style of mineralisation.		 • The western coastal plain of South Africa contains a
significant resource of detrital heavy minerals by
world standards.
• The heavy mineral sand deposits occur in a current
active beach environment (eg Tormin mine) as well
as in older palaeo-beach raised strandlines found
inland (inland strandlines) eg Tronox Namakwa
Sands.
• Apart from the mid-Jurassic, Cretaceous and Tertiary
(Paleogene) sediments along the coast, numerous
small fossiliferous, marine, and terrestrial deposits of
Neogene age outcrop along the coastal zone.
• The onshore mineral sands are marine palaeo-
terraces “Inland Strands”, aeolian sands and fluvial
sediments. These targets were formed during
Miocene, Pliocene, and Quaternary/Pleistocene
coastal transgression (sea move inland) and
regression cycles.
• The lithological units of the Western Strandline can
be described as below:
o
Aeolian Sand – non mineralised
o
Red Aeolian Sand – mineralised
o
Silcrete Duricrust/ Dorbank
o
Orange Feldspathic Sand – non
mineralised
o
Orange Feldspathic Sand – mineralised
• Dorbank – mineralised
• Strandline – mineralised
• Base pebble beds – mineralised
• Schist basement
• For purposes of estimation, the lithology has been
grouped into the following:
• Red Aeolian Sand
• Silcrete Duricrust / Dorbank
• Orange Feldspathic Sand
• Main Strandline Mineralisation
• Secondary Perched Strandline Mineralisation
• Gravel
• Basement Schist
• The orebody hosts mineralisation in all geological
units/layers except for the schist basement.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 45

ASX: MRC ASX: MRC 28 April 2023

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• The minimum hole length is 5m, maximum 60m
and average depth of drilling is 24metres.
• East collar ranges – 220,261mE to 227,375mE.
• North collar ranges – 6,500,851mN to 6,510,977mN.
• Height collar ranges- 34.25m to 95.84m.
• Azimuth ranges/dip ranges – vertical drilling.
• Not relevant.
• No grade cutting of HM values were undertaken.
• No metal equivalents were used for reporting
of Mineral Resources.
• Not relevant.
• The strandline mineralisation is sub-horizontal in
nature and the air core drilling intercepts are vertical.
• Thickness of intercept reported is therefore true
thickness of the mineralisation.
Criteria JORC Code Explanation Commentary
Drill hole
Information		 A summary of all information
material to the understanding of
the exploration results including a
tabulation of the following
information for all Material drill
holes:
Easting and northing of the drill
hole collar
elevation or RL (Reduced Level –
elevation above sea level in
metres) of the drill hole collar
dip and azimuth of the hole
down hole length and interception
depth
hole length.
If the exclusion of this information
is justified on the basis that the
information is not Material and
this exclusion does not detract
from the understanding of the
report, the Competent Person
should clearly explain why this is
the case.		 • The minimum hole length is 5m, maximum 60m
and average depth of drilling is 24metres.
• East collar ranges – 220,261mE to 227,375mE.
• North collar ranges – 6,500,851mN to 6,510,977mN.
• Height collar ranges- 34.25m to 95.84m.
• Azimuth ranges/dip ranges – vertical drilling.
Data
aggregation
methods		 In reporting Exploration Results,
weighting averaging techniques,
maximum and/or minimum grade
truncations (eg cutting of high
grades) and cut-off grades are
usually Material and should be
stated.
Where aggregate intercepts
incorporate short lengths of high
grade results and longer lengths
of low grade results, the
procedure used for such
aggregation should be stated and
some typical examples of such
aggregations should be shown in
detail.
The assumptions used for any
reporting of metal equivalent
values should be clearly stated.		 • Not relevant.
• No grade cutting of HM values were undertaken.
• No metal equivalents were used for reporting
of Mineral Resources.
Relationship
between
mineralisation
widths and
intercept
lengths		 These relationships are
particularly important in the
reporting of Exploration Results.
If the geometry of the
mineralisation with respect to the
drill hole angle is known, its
nature should be reported.
If it is not known and only the		 • Not relevant.
• The strandline mineralisation is sub-horizontal in
nature and the air core drilling intercepts are vertical.
• Thickness of intercept reported is therefore true
thickness of the mineralisation.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 46

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Maps, sections and plan views are provided in the
main body of the report and previous market
releases.
• Statistics of drillhole grades used during the Mineral
Resource Estimate are contained in the main body of
the report.
• This report provides the total information available to
date and is considered to represent a balanced
report.
• Historical drill data is not reported as it is classified
as historical foreign estimates that are non-JORC
compliant.
• Aeromagnetic geophysical data has been used for
drilling target delineations.
• Only 48 holes (1,192m) from historical drilling were
verified and included into the resource model. This is
an increase from the previous model, as new drilling
has confirmed logging and assays from more of the
historical dataset.
• Further drilling is planned to increase
Measured/Indicated resources over the Western
Strandline.
Criteria JORC Code Explanation Commentary
down hole lengths are reported,
there should be a clear statement
to this effect (eg ‘down hole
length, true width not known’).
Diagrams Appropriate maps and sections
(with scales) and tabulations of
intercepts should be included for
any significant discovery being
reported These should include,
but not be limited to a plan view of
drill hole collar locations and
appropriate sectional views.		 • Maps, sections and plan views are provided in the
main body of the report and previous market
releases.
Balanced
reporting		 Where comprehensive reporting of
all Exploration Results is not
practicable, representative
reporting of both low and high
grades and/or widths should be
practiced to avoid misleading
reporting of Exploration Results.		 • Statistics of drillhole grades used during the Mineral
Resource Estimate are contained in the main body of
the report.
• This report provides the total information available to
date and is considered to represent a balanced
report.
Other
substantive
exploration
data		 Other exploration data, if
meaningful and material, should
be reported including (but not
limited to): geological
observations; geophysical survey
results; geochemical survey
results; bulk samples – size and
method of treatment; metallurgical
test results; bulk density,
groundwater, geotechnical and
rock characteristics; potential
deleterious or contaminating
substances.		 • Historical drill data is not reported as it is classified
as historical foreign estimates that are non-JORC
compliant.
• Aeromagnetic geophysical data has been used for
drilling target delineations.
• Only 48 holes (1,192m) from historical drilling were
verified and included into the resource model. This is
an increase from the previous model, as new drilling
has confirmed logging and assays from more of the
historical dataset.
Further work The nature and scale of planned
further work (eg tests for lateral
extensions or depth extensions or
large-scale step-out drilling).
Diagrams clearly highlighting the
areas of possible extensions,
including the main geological
interpretations and future drilling
areas, provided this information is
_not commercially sensitive. _		 • Further drilling is planned to increase
Measured/Indicated resources over the Western
Strandline.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 47

ASX: MRC ASX: MRC

28 April 2023

Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in the preceding sections also apply to this section)

==> picture [121 x 112] intentionally omitted <==
Criteria JORC Code Explanation Commentary
Database
integrity		 Measures taken to ensure that
data has not been corrupted by,
for example, transcription or
keying errors, between its initial
collection and its use for Mineral
Resource estimation purposes.
Data validation procedures used.		 • The data was plotted, and plots were as expected with no
mis-plots or extraneous data found. Maximum and
minimum values and average values were all within the
norm. Duplicate values were confirmed as such. The
coordinates were confirmed as being WGS84 UTM zone
34S.
• Data is stored in an offsite database hosted by Maxgeo.
Site visits Comment on any site visits
undertaken by the Competent
Person and the outcome of
those visits.
If no site visits have been
undertaken indicate why this is
the case.		 • The previous Competent Person was a full-time employee of
Mineral Commodities Ltd. However, the new Competent
Person as of 2022 has not had sufficient time to visit site.
• A site visit is planned for 2023.
Geological
interpretation		 Confidence in (or conversely,
the uncertainty of) the
geological interpretation of the
mineral deposit.
Nature of the data used and of
any assumptions made.
The effect, if any, of alternative
interpretations on Mineral
Resource estimation.
The use of geology in guiding
and controlling Mineral
Resource estimation.
The factors affecting continuity
_both ofgrade andgeology. _		 • The deposit is a classic inland strandline mineral sands
deposit with no doubt as to its genesis.
• The grain size characteristics are interpreted to support an
offshore depositional setting, closer to the shoreline position.
• Samples were collected for resource estimation purposes.
• The geology/topography of the deposit has been used to
constrain the resource envelope. The data was partitioned
into areas (subsets) based on geology/topography. The
base of the deposit is defined by the underlying bedrock, the
landward side by barren land and sand dunes.
Dimensions The extent and variability of the
Mineral Resource expressed as
length (along strike or
otherwise), plan width, and
depth below surface to the
upper and lower limits of the
Mineral Resource.		 • The total deposit, inside MSR controlled Prospecting
Rights, has a strike length of approximately 12,125m and
an average width (including low grade halo) of 380m. High
grade strandline core of the deposit averages
approximately 200m width, along the entire strike length. It
is developed from surface to a maximum depth of 49m and
the average resource thickness is approximately 21m
(including low grade halo). The deposit occurs from the
surface down.
Estimation and
modelling
techniques		 The nature and appropriateness
of the estimation technique(s)
applied and key assumptions,
including treatment of extreme
grade values, domaining,
interpolation parameters and
maximum distance of
extrapolation from data points. If
a computer assisted estimation
method was chosen, include a
description of computer
software andparameters used.		 • Micromine software was used to domain and estimate each
of the valuable heavy minerals and THM. Domains were
snapped to the nearest true intersection from sampling.
• Samples were generally 1.0m in length however there were
some 4m long field composites. The entire data set was
composited down to 1m.
• Outlier values were cut based on local analysis for each
lithology. Only THM percentage was required to be top cut
for the low grade Dorbank and RAS lithologies (cut to 30%
and 15% respectively), and the only constituent mineral
requiringa topcut was Garnet within the RAS(cut to 10%).

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 48

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
• Data was extrapolated between data points and
approximately half of the drill spacing beyond. Data points
are nominally 125m x 25m to 250m x 25m. There are
generally between 2-15 drill holes per line (average 7 holes).
• Ordinary Kriging was used as the primary estimator. Each
variable was estimated separately, using variograms
created for each lithology.
• An anisotropic search was used, with the variable ratios of
direction of greatest continuity: Across the continuity: depth
(STRAND 1:0.4:0.04, LGSANDS 4:0.4:0.08). A maximum
search distance of 500m was used for the STRAND unit,
and 750m for LGSAND units. Octant searching was used,
with a maximum points per sector of between 5 and 12. The
minimum points to estimate a block were 5. These
neighborhood parameters were all confirmed using
Quantitative Kriging Neighborhood Analysis.
• This is a resource estimate and mining parameters are not
used beyond normal global parameters of grades,
dimensions, and accessibility.
• An in-depth validation process was used to test the
robustness of the modelled data, including visual checks,
check estimates (NN), swath plots and detailed statistical
comparisons.
• The results of the validation of the block model show
acceptable correlation of the input data to the estimated
grades.
• Maiden Mineral Resources have been previously estimated
for the Western Strandline in August 2020.
• The resource tonnages are estimated on a dry basis.
• Final reported resources were based on a 2% THM cut-off
grade for blocks as this is the current minimum grade
where there is a reasonable expectation for eventual
extraction.
• 2% cut off grade was based on grade-tonnage curves with
respect to THM and VHM assemblage. Also considered
was current and anticipated plant performance, and other
similarly sized deposits in the region.
• A VHM cut-off for resources would be more accurate than a
THM cut-off. This is because the proportion of VHM within
the THM varies. MSRplan to transition from a THM cut-off
Criteria JORC Code Explanation Commentary
The availability of check
estimates, previous estimates
and/or mine production records
and whether the Mineral
Resource estimate takes
appropriate account of such
data.
The assumptions made
regarding recovery of by-
products.
Estimation of deleterious
elements or other non-grade
variables of economic
significance (eg sulphur for acid
mine drainage characterisation).
In the case of block model
interpolation, the block size in
relation to the average sample
spacing and the search
employed.
Any assumptions behind
modelling of selective mining
units.
Any assumptions about
correlation between variables.
Description of how the
geological interpretation was
used to control the resource
estimates.
Discussion of basis for using or
not using grade cutting or
capping.
The process of validation, the
checking process used, the
comparison of model data to
drill hole data, and use of
reconciliation data if available.		 • Data was extrapolated between data points and
approximately half of the drill spacing beyond. Data points
are nominally 125m x 25m to 250m x 25m. There are
generally between 2-15 drill holes per line (average 7 holes).
• Ordinary Kriging was used as the primary estimator. Each
variable was estimated separately, using variograms
created for each lithology.
• An anisotropic search was used, with the variable ratios of
direction of greatest continuity: Across the continuity: depth
(STRAND 1:0.4:0.04, LGSANDS 4:0.4:0.08). A maximum
search distance of 500m was used for the STRAND unit,
and 750m for LGSAND units. Octant searching was used,
with a maximum points per sector of between 5 and 12. The
minimum points to estimate a block were 5. These
neighborhood parameters were all confirmed using
Quantitative Kriging Neighborhood Analysis.
• This is a resource estimate and mining parameters are not
used beyond normal global parameters of grades,
dimensions, and accessibility.
• An in-depth validation process was used to test the
robustness of the modelled data, including visual checks,
check estimates (NN), swath plots and detailed statistical
comparisons.
• The results of the validation of the block model show
acceptable correlation of the input data to the estimated
grades.
• Maiden Mineral Resources have been previously estimated
for the Western Strandline in August 2020.
Moisture Whether the tonnages are
estimated on a dry basis or with
natural moisture, and the
method of determination of the
moisture content.		 • The resource tonnages are estimated on a dry basis.
Cut-off
parameters		 The basis of the adopted
cut-off grade(s) or quality
parameters applied.		 • Final reported resources were based on a 2% THM cut-off
grade for blocks as this is the current minimum grade
where there is a reasonable expectation for eventual
extraction.
• 2% cut off grade was based on grade-tonnage curves with
respect to THM and VHM assemblage. Also considered
was current and anticipated plant performance, and other
similarly sized deposits in the region.
• A VHM cut-off for resources would be more accurate than a
THM cut-off. This is because the proportion of VHM within
the THM varies. MSRplan to transition from a THM cut-off

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 49

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
to a VHM cut-off for external reporting of resources.
• The resource is considered as dry mining feed and
mineralisation can be any depth or width. Dry mining
techniques are preferred in situations involving high grades.
• Mining is through conventional open pit methods.
• The thickness and continuous nature of the mineralisation
supports a non-selective bulk mining method.
• The Company believes there are no mining factors which
affect the assumption that the deposit has reasonable
prospects for economic mining.
• Metallurgical recovery is similar to other mineral sand
operations.
• Metallurgical parameters have been taken from the
metallurgical tests, and metallurgical testwork results
support the recovery. The VHM mineral assemblage, low
slimes and oversize are fit for an economic extraction.
• Historical and current mining and processing operations
confirm that the metallurgical parameters used and
testwork underpinning the metallurgical assumptions are
appropriate.
• The most recent studies are:
• 2020 Tormin Expansion projects-implementation strategy
by MinSol Engineering, and
• 2021 Pre-feasibility study report for Inland Strandline
expansion by MinSol Engineering.
• To date, the Company considers there are no metallurgical
factors which are likely to significantly affect the assumption
that the deposit has reasonable prospects of eventual
economic extraction.
• There are no environmental factors likely to affect the
assumption that the deposit has reasonable prospects for
economic extraction.
• The local vegetation environment generally consists of
strandveld plant communities. Topsoil stripped from the
mining operations will be stockpiled for later use during
rehabilitation. Slimes content is moderate (<10%) and
tailings generated in the processing plant will be pumped
back into the open pits as part of the rehabilitation strategy.
Any excess water will be recovered and recycled in the
process.
Criteria JORC Code Explanation Commentary
to a VHM cut-off for external reporting of resources.
Mining factors
or assumptions		 Assumptions made regarding
possible mining methods,
minimum mining dimensions
and internal (or, if applicable,
external) mining dilution. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider potential mining
methods, but the assumptions
made regarding mining methods
and parameters when
estimating Mineral Resources
may not always be rigorous.
Where this is the case, this
should be reported with an
explanation of the basis of the
mining assumptions made.		 • The resource is considered as dry mining feed and
mineralisation can be any depth or width. Dry mining
techniques are preferred in situations involving high grades.
• Mining is through conventional open pit methods.
• The thickness and continuous nature of the mineralisation
supports a non-selective bulk mining method.
• The Company believes there are no mining factors which
affect the assumption that the deposit has reasonable
prospects for economic mining.
Metallurgical
factors or
assumptions		 The basis for assumptions or
predictions regarding
metallurgical amenability. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider potential metallurgical
methods, but the assumptions
regarding metallurgical
treatment processes and
parameters made when
reporting Mineral Resources
may not always be rigorous.
Where this is the case, this
should be reported with an
explanation of the basis of the
metallurgical assumptions
made.		 • Metallurgical recovery is similar to other mineral sand
operations.
• Metallurgical parameters have been taken from the
metallurgical tests, and metallurgical testwork results
support the recovery. The VHM mineral assemblage, low
slimes and oversize are fit for an economic extraction.
• Historical and current mining and processing operations
confirm that the metallurgical parameters used and
testwork underpinning the metallurgical assumptions are
appropriate.
• The most recent studies are:
• 2020 Tormin Expansion projects-implementation strategy
by MinSol Engineering, and
• 2021 Pre-feasibility study report for Inland Strandline
expansion by MinSol Engineering.
• To date, the Company considers there are no metallurgical
factors which are likely to significantly affect the assumption
that the deposit has reasonable prospects of eventual
economic extraction.
Environmental
factors or
assumptions		 Assumptions made regarding
possible waste and process
residue disposal options. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider the potential
environmental impacts of the
mining and processing
operation. While at this stage the
determination of potential
environmental impacts,		 • There are no environmental factors likely to affect the
assumption that the deposit has reasonable prospects for
economic extraction.
• The local vegetation environment generally consists of
strandveld plant communities. Topsoil stripped from the
mining operations will be stockpiled for later use during
rehabilitation. Slimes content is moderate (<10%) and
tailings generated in the processing plant will be pumped
back into the open pits as part of the rehabilitation strategy.
Any excess water will be recovered and recycled in the
process.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 50

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
• There are no significant pollutants introduced with the
tailings and the material is inert, however further studies for
tailing and slime waste classification are ongoing.
• The bulk density is based on a calculation of the specific
gravity of the silica and heavy mineral content fractions of
each sample. It is therefore not fixed and fluctuates
between 1.68 and 2.1 as per the formula: SG=1.68+(0.0095
x THM).
• The use of a bulk density algorithm is a standard industry
practice for the estimation of mineral sands resources.
There is uncertainty that the SG formula is sufficiently
accurate to support Measured resources. MSR plan to
generate a dataset of actual density measurements for
comparison against the calculated density.
• The Mineral Resources have been classified as Measured,
Indicated, and Inferred Categories, in accordance with the
2012 Australasian Code for Reporting of Mineral Resources
and Ore Reserves (“JORC Code (2012)”).
• A range of criteria has been considered in determining this
classification including, Geological continuity and Drillhole
spacing:
• Areas with aircore drilling spaced at 125x25m have been
generally classified Measured;
• Areas with aircore drilling spaced at 250x20m have been
generally classified Indicated; and
• Areas outside this has been classified as Inferred. Broadly
spaced scoping drilling in the south, coupled with other
widely spaced historic data, gives some confidence in the
continuity of mineralisation up to 100m from the main high
grade strandline core, providing the search criteria are met.
•
Criteria JORC Code Explanation Commentary
particularly for a greenfield
project, may not always be well
advanced, the status of early
consideration of these potential
environmental impacts should
be reported. Where these
aspects have not been
considered, this should be
reported with an explanation of
the environmental assumptions
made.		 • There are no significant pollutants introduced with the
tailings and the material is inert, however further studies for
tailing and slime waste classification are ongoing.
Bulk density Whether assumed or
determined. If assumed, the
basis for the assumptions. If
determined, the method used,
whether wet or dry, the
frequency of the measurements,
the nature, size and
representativeness of the
samples.
The bulk density for bulk
material must have been
measured by methods that
adequately account for void
spaces (vugs, porosity, etc),
moisture and differences
between rock and alteration
zones within the deposit.
Discuss assumptions for bulk
density estimates used in the
evaluation process of the
different materials.		 • The bulk density is based on a calculation of the specific
gravity of the silica and heavy mineral content fractions of
each sample. It is therefore not fixed and fluctuates
between 1.68 and 2.1 as per the formula: SG=1.68+(0.0095
x THM).
• The use of a bulk density algorithm is a standard industry
practice for the estimation of mineral sands resources.
There is uncertainty that the SG formula is sufficiently
accurate to support Measured resources. MSR plan to
generate a dataset of actual density measurements for
comparison against the calculated density.
Classification The basis for the classification of
the Mineral Resources into
varying confidence categories.
Whether appropriate account
has been taken of all relevant
factors (ie relative confidence in
tonnage/grade estimations,
reliability of input data,
confidence in continuity of
geology and metal values,
quality, quantity and distribution
of the data).
Whether the result appropriately
reflects the Competent Person’s
view of the deposit.		 • The Mineral Resources have been classified as Measured,
Indicated, and Inferred Categories, in accordance with the
2012 Australasian Code for Reporting of Mineral Resources
and Ore Reserves (“JORC Code (2012)”).
• A range of criteria has been considered in determining this
classification including, Geological continuity and Drillhole
spacing:
• Areas with aircore drilling spaced at 125x25m have been
generally classified Measured;
• Areas with aircore drilling spaced at 250x20m have been
generally classified Indicated; and
• Areas outside this has been classified as Inferred. Broadly
spaced scoping drilling in the south, coupled with other
widely spaced historic data, gives some confidence in the
continuity of mineralisation up to 100m from the main high
grade strandline core, providing the search criteria are met.
•

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 51

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
• The Mineral Resource has been reviewed internally as part
of normal validation processes by MRC.
• Wardell Armstrong International (“WAI”) conducted a review
of the Mineral Resource Estimate and no material issues
were identified. Mr Ché Osmond (CGeol) and Richard Ellis
(CGeol) (WAI) undertook an audit of the Mineral Resource
estimate as an independent technical review.
• The current Competent Person was not involved in the
preparation of the resource estimate. A desktop review was
completed before accepting responsibility as the
Competent Person. The current estimate and resource
classification is considered defendable. There is some
uncertainty that a Measured resource classification is
appropriate however, this needs to be investigated with
more work, i.e.,
• Detailed examination of twin holes to verify the reliability of
drilling.
• Comparing calculated density to actual density
measurements.
• Sending sample splits for verification of the quantitative
XRD at an alternative laboratory. This could involve an
approach such as – Gravity Separation of the THM followed
by magnetic separation. The magnetic and non-magnetic
THM fractions then undergo various density separations
followed by XRF analysis of the fractions to determine the
mineral assemblage and mineral quality. The quantitative
XRF could also be compared against QEMSCAN.
• 4. Complete a simple 2D kriging estimation variance study
to verify that the current drill hole spacings used for
resource classification are appropriate.
• Slope of regression from kriging was considered in
classification.
• No significant production has occurred from the deposit.
Since September 2020 when mining commenced in the
Western Strandline, a total of 1.9Mt has been mined from
the South pit, with all material being stockpiled. 100kt was
used for testwork purposes in the March quarter of 2021.
This material was depleted from the updated mineral
resource and reported as a stockpile.
Criteria JORC Code Explanation Commentary
Audits or
reviews		 The results of any audits or
reviews of Mineral Resource
estimates.		 • The Mineral Resource has been reviewed internally as part
of normal validation processes by MRC.
• Wardell Armstrong International (“WAI”) conducted a review
of the Mineral Resource Estimate and no material issues
were identified. Mr Ché Osmond (CGeol) and Richard Ellis
(CGeol) (WAI) undertook an audit of the Mineral Resource
estimate as an independent technical review.
• The current Competent Person was not involved in the
preparation of the resource estimate. A desktop review was
completed before accepting responsibility as the
Competent Person. The current estimate and resource
classification is considered defendable. There is some
uncertainty that a Measured resource classification is
appropriate however, this needs to be investigated with
more work, i.e.,
• Detailed examination of twin holes to verify the reliability of
drilling.
• Comparing calculated density to actual density
measurements.
• Sending sample splits for verification of the quantitative
XRD at an alternative laboratory. This could involve an
approach such as – Gravity Separation of the THM followed
by magnetic separation. The magnetic and non-magnetic
THM fractions then undergo various density separations
followed by XRF analysis of the fractions to determine the
mineral assemblage and mineral quality. The quantitative
XRF could also be compared against QEMSCAN.
• 4. Complete a simple 2D kriging estimation variance study
to verify that the current drill hole spacings used for
resource classification are appropriate.
Discussion of
relative
accuracy/
confidence		 Where appropriate, a statement
of the relative accuracy and
confidence level in the Mineral
Resource estimate using an
approach or procedure deemed
appropriate by the Competent
Person. For example, the
application of statistical or
geostatistical procedures to
quantify the relative accuracy of
the resource within stated
confidence limits, or, if such an
approach is not deemed
appropriate, a qualitative
discussion of the factors that
could affect the relative
accuracy and confidence of the
estimate.
The statement should specify
whether it relates to global or
local estimates, and, if local,
state the relevant tonnages,		 • Slope of regression from kriging was considered in
classification.
• No significant production has occurred from the deposit.
Since September 2020 when mining commenced in the
Western Strandline, a total of 1.9Mt has been mined from
the South pit, with all material being stockpiled. 100kt was
used for testwork purposes in the March quarter of 2021.
This material was depleted from the updated mineral
resource and reported as a stockpile.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 52

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==
Criteria JORC Code Explanation Commentary
which should be relevant to
technical and economic
evaluation. Documentation
should include assumptions
made and theprocedures used.

Section 4 Estimation and Reporting of Ore Reserves

(Criteria listed in the preceding sections also apply to this section)

Criteria JORC Code Explanation Commentary
Mineral
Resource
estimate for
conversion to
Ore Reserves		 Description of the Mineral
Resource estimate used as a
basis for the conversion to an
Ore Reserve.
Clear statement as to whether
the Mineral Resources are
reported additional to, or
inclusive of, the Ore Reserves.		 • This Ore Reserve is based on the Measured and
Indicated portion of the updated Mineral Resource at
Tormin Western Strandline released on 7 December
2021.
• The Mineral Resource model is a 3D block model
reported at 2%THM cut-off grade.
• Mineral Resources are reported inclusive of Ore
Reserves.
Site visits Comment on any site visits
undertaken by the Competent
Person and the outcome of
those visits.
If no site visits have been
undertaken indicate why this is
the case.		 • A site visit was undertaken in the first week of February
2023.
• All aspects of the operation were reviewed over a
period of 5 days including mining operations at both
Tormin and Northern Beaches, previously mined pits in
the southern section of the Western Inland Strand and
clearing / grubbing works being undertaken at the
northern area of the Extended Mining Rights.
• The waste dumps and ROM stockpiles were examined
along with product stockpiles and a review of the new
processing route for Inland Strand material completed.
• A review of the on-site laboratory was undertaken
including the entire process workflow from receipt of
samples to release of final approved results. Sample
points along the current operations workflow were also
visited.
• The field office at De Punt exploration area was visited
and sampling procedures reviewed with the contract
geologist and exploration technicians. The recent
drilling sites at De Punt were also examined.
• Discussions with the consulting geotechnical group
were held on site in person and the proposed pit slope
parameter set discussed along with review of the
performance of the current pit slopes.
• Review of tenue, permitting and permitting processes
and environmental requires were discussed on site
with the Environment Manager and General Manager.
Study status The type and level of study
undertaken to enable Mineral
Resources to be converted to		 • This study is assessed as being at a Pre-Feasibility
Study level to support the Ore Reserve.
• The Pre-FeasibilityStudyevaluatedgeologyand

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 53

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
resource, mining, metallurgy, process plant and
tailings, infrastructure and logistics, environment,
human resources, marketing, implementation plan and
schedule, capital and operating costs, financial
assessment and other activities/issues that could
impact the proposed operation as contained in the PFS
report.
• Processing costs and input costs (in particular diesel
and transport costs) were reviewed post PFS and
adjusted to current long term projections post COVID
19 impacts.
• Modifying factors accurate to the study level have been
applied. The resulting mine plan is technically
achievable and economically viable.
• A value model was developed that assigns mining and
processing recoveries, costs, and revenue to the
geological model. This value model follows the entire
mining process from topsoil stripping to final
rehabilitation.
• A cashflow grade model was written in python as a
cash flow script to generate at a block level all of the
required attributes to calculate the cash flow grades for
the proposed processing permutation for subsequent
use in pit optimisation and strategic mine schedule
optimisation.
• Blocks where the cash flow grade per tonne is positive
are designated as potential ore and negative blocks
are designated potential waste.
• Mining dilution was not specifically input as the updated
cashflow grades show that the mineralisation is
extensive above the bedrock. With a LOM strip ratio of
0.19:1, this bulk mining operation does not require a
great deal of selectivity in mining. Additionally, the block
sizes used in the Mineral Resource estimation are large
enough that dilution is included as part of the estimation
process.
• All the selected pit shells did not have detailed pit
designs created due to the shallow nature of the pits
and the extent of cashflow positive material. Pits within
the EMR have detailed designs. These pits account
for 9 years’ worth of mining at current rates. Pits will be
detailed for construction as required.
• Inferred Mineral Resources were considered as waste.
• The deposits will be mined in multiple stages in a
conventional open pit operation and will utilise
conventional load-haul mining methods. Each panel
will be mined using 70 tonne class excavators and 45
tonne articulated trucks.
• A minimum mining width for pits of 30m is based on the
use of CAT 745 class trucks.
• Geotechnical assessment and recommendations
Criteria JORC Code Explanation Commentary
Ore Reserves.
The Code requires that a study
to at least Pre-Feasibility Study
level has been undertaken to
convert Mineral Resources to
Ore Reserves. Such studies will
have been carried out and will
have determined a mine plan
that is technically achievable and
economically viable, and that
material Modifying Factors have
been considered.		 resource, mining, metallurgy, process plant and
tailings, infrastructure and logistics, environment,
human resources, marketing, implementation plan and
schedule, capital and operating costs, financial
assessment and other activities/issues that could
impact the proposed operation as contained in the PFS
report.
• Processing costs and input costs (in particular diesel
and transport costs) were reviewed post PFS and
adjusted to current long term projections post COVID
19 impacts.
• Modifying factors accurate to the study level have been
applied. The resulting mine plan is technically
achievable and economically viable.
Cut-off
parameters		 The basis of the cut-off grade(s)
or quality parameters applied.		 • A value model was developed that assigns mining and
processing recoveries, costs, and revenue to the
geological model. This value model follows the entire
mining process from topsoil stripping to final
rehabilitation.
• A cashflow grade model was written in python as a
cash flow script to generate at a block level all of the
required attributes to calculate the cash flow grades for
the proposed processing permutation for subsequent
use in pit optimisation and strategic mine schedule
optimisation.
• Blocks where the cash flow grade per tonne is positive
are designated as potential ore and negative blocks
are designated potential waste.
Mining factors
or assumptions		 The major assumptions made
and Mineral Resource model
used for pit and stope
optimisation (if appropriate).
The mining dilution factors used.
The mining recovery factors
used.
Any minimum mining widths
used.
The manner in which Inferred
Mineral Resources are utilised in
mining studies and the sensitivity
of the outcome to their inclusion.
The infrastructure requirements
of the selected mining methods.		 • Mining dilution was not specifically input as the updated
cashflow grades show that the mineralisation is
extensive above the bedrock. With a LOM strip ratio of
0.19:1, this bulk mining operation does not require a
great deal of selectivity in mining. Additionally, the block
sizes used in the Mineral Resource estimation are large
enough that dilution is included as part of the estimation
process.
• All the selected pit shells did not have detailed pit
designs created due to the shallow nature of the pits
and the extent of cashflow positive material. Pits within
the EMR have detailed designs. These pits account
for 9 years’ worth of mining at current rates. Pits will be
detailed for construction as required.
• Inferred Mineral Resources were considered as waste.
• The deposits will be mined in multiple stages in a
conventional open pit operation and will utilise
conventional load-haul mining methods. Each panel
will be mined using 70 tonne class excavators and 45
tonne articulated trucks.
• A minimum mining width for pits of 30m is based on the
use of CAT 745 class trucks.
• Geotechnical assessment and recommendations

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 54

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
provided by Middindi Consulting and MLB Consulting.
Pit slopes assumed as 45 and 75 degrees depends on
material types.
• Hydrogeological studies have been carried out by the
Australian Environmental & Mining Co (AEMCO) and
Geohydrological impact assessment completed by
Geohydrological and Spatial Solutions International
(GEOSS).
• Ore to be excavated from open pits with an average
depth of 15m and maximum depth of 30m. Ore is
hauled directly to the processing plant by the
Articulated trucks.
• Haul road widths designed to 15m (as approved in the
Environmental Management Plan) for dual lane traffic
and 11.5m for single lane, based on the use of CAT
745 Articulated trucks, with ramp gradients to be
limited to 1:10 (10%).
• The high-grade nature of the deposit results in pit
optimisation shell sizes increasing incrementally with
revenue factor.
• Access to the area is straightforward and roads are
available within Tormin mining area.
• The topography is smooth (about 3 degrees), and it is
anticipated that no significant issues associated with
mining are likely.
• Infrastructure requirements for the selected mining
method are minimal. Current workshops and operating
spaces have been defined. ROM stockpiles (fingers)
will be constructed to manage the feed blend.
• The LOM average strip ratio is approximately 0.19:1
(Waste: Ore).
• Based on the block model, the total mined mine waste
volumes are expected to be approximately 11.3 million
tonnes over the life of mine.
• The metallurgical process proposed comprises
conventional gravity separation of heavy minerals
using spirals. Metallurgical recovery is similar to other
mineral sand operations.
• Metallurgical parameters have been taken from the
metallurgical tests by Nagrom, Haver & Boecker and
Delchem, and metallurgical testwork results support
the recovery. The VHM mineral assemblage, low
slimes and oversize are fit for an economic extraction.
• Key design criteria used for the current Ore reserve are
below:
Criteria JORC Code Explanation Commentary
provided by Middindi Consulting and MLB Consulting.
Pit slopes assumed as 45 and 75 degrees depends on
material types.
• Hydrogeological studies have been carried out by the
Australian Environmental & Mining Co (AEMCO) and
Geohydrological impact assessment completed by
Geohydrological and Spatial Solutions International
(GEOSS).
• Ore to be excavated from open pits with an average
depth of 15m and maximum depth of 30m. Ore is
hauled directly to the processing plant by the
Articulated trucks.
• Haul road widths designed to 15m (as approved in the
Environmental Management Plan) for dual lane traffic
and 11.5m for single lane, based on the use of CAT
745 Articulated trucks, with ramp gradients to be
limited to 1:10 (10%).
• The high-grade nature of the deposit results in pit
optimisation shell sizes increasing incrementally with
revenue factor.
• Access to the area is straightforward and roads are
available within Tormin mining area.
• The topography is smooth (about 3 degrees), and it is
anticipated that no significant issues associated with
mining are likely.
• Infrastructure requirements for the selected mining
method are minimal. Current workshops and operating
spaces have been defined. ROM stockpiles (fingers)
will be constructed to manage the feed blend.
• The LOM average strip ratio is approximately 0.19:1
(Waste: Ore).
• Based on the block model, the total mined mine waste
volumes are expected to be approximately 11.3 million
tonnes over the life of mine.
Metallurgical
factors or
assumptions		 The metallurgical process
proposed and the
appropriateness of that process
to the style of mineralisation.
Whether the metallurgical
process is well-tested technology
or novel in nature.
The nature, amount and
representativeness of
metallurgical test work
undertaken, the nature of the
metallurgical domaining applied
and the corresponding
metallurgical recovery factors
applied.
Any assumptions or allowances
made for deleterious elements.		 • The metallurgical process proposed comprises
conventional gravity separation of heavy minerals
using spirals. Metallurgical recovery is similar to other
mineral sand operations.
• Metallurgical parameters have been taken from the
metallurgical tests by Nagrom, Haver & Boecker and
Delchem, and metallurgical testwork results support
the recovery. The VHM mineral assemblage, low
slimes and oversize are fit for an economic extraction.
• Key design criteria used for the current Ore reserve are
below:

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 55

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023 28 April 2023 28 April 2023
Criteria JORC Code Explanation Commentary
The existence of any bulk
sample or pilot scale test work
and the degree to which such
samples are considered
representative of the orebody as
a whole.
For minerals that are defined by
a specification, has the ore
reserve estimation been based
on the appropriate mineralogy to
meet the specifications?		 Description
Overall Recovery (%)
Zircon
77
Rutile
50
Ilmenite
78
Garnet
80
Magnetite
57
• The Ore Reserve estimation has been based on the
recoveries and processes outlined from metallurgical
testwork.
• 100kt of ore was processed in the MSR’s Tormin
processing plant in the March quarter of 2021 prior to
plant upgrades and installation of new equipment. This
test material and its subsequent plant performance
was used to inform the recovery parameters used for
the optimisation.
• Additionally, production has now commenced on the
Inland Strand material and current process plant
performance to date is in line with metallurgical inputs
used in modelling. Refer ASX announcement entitled
‘Commissioning complete for Inland Strands Ore’
dated 27 March 2023.
Description Overall Recovery (%)
Zircon 77
Rutile 50
Ilmenite 78
Garnet 80
Magnetite 57
Environmental The status of studies of potential
environmental impacts of the
mining and processing
operation. Details of waste rock
characterisation and the
consideration of potential sites,
status of design options
considered and, where
applicable, the status of
approvals for process residue
storage and waste dumps
should be reported.		 • Significant environmental assessment work has been
undertaken. The deposit lies entirely within prospecting
right (WC 30/5/1/1/2/10262 PR) and 36% of the Ore
Reserve is within the 162 & 163 Expanded Mining
Right.
• Environmental impact assessment has been completed
by SRK Consulting as an independent environmental
consultant and environmental approvals have been
granted for the 162 & 163 EMR.
• Ecology, fauna, and flora studies were undertaken as
part of the baseline assessment report to grant
Integrated Environmental Authorisation (IEA) by the
Ministry of Environment, Forestry and Fisheries.
• MSR implements dust suppression measures to reduce
dust emissions from haul roads. A watercart
continuously applies seawater to all internal haul roads
(freshwater applied to external haul roads) as required,
including the DR2225 public gravel road to Koekenaap.
MSR will continue to implement dust suppression
measures on haul roads.
• MSR has engaged GroundTruth to undertake a
Biodiversity Management Plan (BMP).
• Environmental studies to support additional mining
rights on prospecting right (WC 30/5/1/1/2/10262 PR)
outside the 162 & 163 Expanded Mining Right are in
progress.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 56

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Access to Tormin Mine is from Koekenaap via
Robeiland and De Punt, or from Koekenaap via
Kommandokraal and Schaapvlei. The gravel road
extending the length of Farm Geelwal Karoo 262 is
maintained by MSR and provides access to the
processing plant.
• The Company owns Geelwal Karoo Farm 262.
• Diesel powered generator sets (gensets) are currently
used at Tormin Mine to provide power to the Mine.
Power is generated by 3 x 1250kVA gensets plus 1
standby unit with an installed power capacity of
3.75MVA. The gensets are containerised and located
adjacent to the SCP and GSP.
• MSR has made an application to Eskom to provide
power from the national grid to replace the current
gensets and, more importantly, provide a cost-effective
power supply option for the expansion plant and MSP.
The future 10MVA power requirement is to utilise the
adjacent wind energy facility. In this event, a 22kV
underground powerline of approximately 4km will be
installed from the Sere wind farm substation to a new
MSR substation. CVG Consulting Engineers has been
engaged for detailed engineering work for this project.
• Obsideo Consulting designed the tailing and water
management plan to suit the Inland Strand processing
plant requirements.
• MSR utilises water from two sources, namely seawater
for processing activities from the seawater intake
located on the coast and fresh water for domestic
purposes, the latter transported by truck to site from
Lutzville. The current daily seawater intake rate is
approximately 7.2 ml/d. Seawater is pumped from the
seawater intake station located on the beach via a
booster pump station to the aquaculture dam. Make-up
water is pumped from the aquaculture dam to the
process water dam which is located at the GSP/SCP.
Process water from the SCP and GSP is discharged
into the secondary process water dam for settling. The
water is then recirculated back to the main process
water storage dam for further use in processing.
Excess water from beach ore processing is returned to
the sea whilst excess water from inland ore is
recovered via the thickener and dewatering screen and
recirculated.
• The average tailings production is approximately 80%
of ROM. Total anticipated tailings from inland mining,
including slimes, will be approximately 0.7Mtpa for
stage 1. Tailings will have a (seawater) moisture
content of ~ 55% with the aim of extracting 100 % of
free flowing (decant) water after settlement.
• Tailings will be pumped as a slurry from the processing
plant and backfilled in the mine void. Tailings,including
Criteria JORC Code Explanation Commentary
Infrastructure The existence of appropriate
infrastructure: availability of land
for plant development, power,
water, transportation (particularly
for bulk commodities), labour,
accommodation; or the ease
with which the infrastructure can
be provided, or accessed.		 • Access to Tormin Mine is from Koekenaap via
Robeiland and De Punt, or from Koekenaap via
Kommandokraal and Schaapvlei. The gravel road
extending the length of Farm Geelwal Karoo 262 is
maintained by MSR and provides access to the
processing plant.
• The Company owns Geelwal Karoo Farm 262.
• Diesel powered generator sets (gensets) are currently
used at Tormin Mine to provide power to the Mine.
Power is generated by 3 x 1250kVA gensets plus 1
standby unit with an installed power capacity of
3.75MVA. The gensets are containerised and located
adjacent to the SCP and GSP.
• MSR has made an application to Eskom to provide
power from the national grid to replace the current
gensets and, more importantly, provide a cost-effective
power supply option for the expansion plant and MSP.
The future 10MVA power requirement is to utilise the
adjacent wind energy facility. In this event, a 22kV
underground powerline of approximately 4km will be
installed from the Sere wind farm substation to a new
MSR substation. CVG Consulting Engineers has been
engaged for detailed engineering work for this project.
• Obsideo Consulting designed the tailing and water
management plan to suit the Inland Strand processing
plant requirements.
• MSR utilises water from two sources, namely seawater
for processing activities from the seawater intake
located on the coast and fresh water for domestic
purposes, the latter transported by truck to site from
Lutzville. The current daily seawater intake rate is
approximately 7.2 ml/d. Seawater is pumped from the
seawater intake station located on the beach via a
booster pump station to the aquaculture dam. Make-up
water is pumped from the aquaculture dam to the
process water dam which is located at the GSP/SCP.
Process water from the SCP and GSP is discharged
into the secondary process water dam for settling. The
water is then recirculated back to the main process
water storage dam for further use in processing.
Excess water from beach ore processing is returned to
the sea whilst excess water from inland ore is
recovered via the thickener and dewatering screen and
recirculated.
• The average tailings production is approximately 80%
of ROM. Total anticipated tailings from inland mining,
including slimes, will be approximately 0.7Mtpa for
stage 1. Tailings will have a (seawater) moisture
content of ~ 55% with the aim of extracting 100 % of
free flowing (decant) water after settlement.
• Tailings will be pumped as a slurry from the processing
plant and backfilled in the mine void. Tailings,including

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 57

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
filtered slimes, from the processing plant will be
pumped separately to the mining void for co-disposal.
The tailings and filtered slimes will be allowed to settle
in the containment cells. Clean water will be decanted
from the containment cells and recycled to the
processing plant for reuse in processing. Davies Lynn
& Partners has been engaged for technical inputs and
design of waste storage facilities for tailings
management.
• 3D- Dig software used for tailing deposition planning
and simulate Co- disposal into backfill and its long-term
impact.
• Backfilled tailings will be covered with returned (dry)
overburden.
• A rehabilitation management plan and standard
operation procedure has been prepared by
Enviroworks.
• Rehabilitation will be undertaken as soon as the mining
path allows. Backfilled tailings and returned
overburden will be profiled to mimic original topography
as closely as possible before topsoil is replaced for
rehabilitation and reseeding,where required.
• MinSol Engineering and Obsideo Consulting prepared a
preliminary capital cost estimate for the Western
Strandline Project based on Association for the
Advancement of Cost Engineering cost estimation
guidelines.
• The Project included engineering, design, procurement,
and construction of a 1.2Mtpa (base case, stage1) wet
processing facility, using conventional crushing,
scrubbing and gravity separation technology. Much of
the processing plan and infrastructure required for the
processing operation was already owned by MRC, with
only minor modifications or upgrades required.
• Front end scrubbing and crushing along with a new
thickener and filters have been installed on site and
commissioned. Refer ASX announcement entitled
‘Commissioning complete for Inland Strands Ore’
dated 27 March 2023.
• The expansion stage has been considered for a
2.4Mtpa mining operation (stage2).
• The operating cost estimate for the operation includes
all costs associated with processing, infrastructure, and
site-based general and administration costs.
• The operating cost inputs have been derived from site
actuals and budget forecasts.
• The mining operating cost estimates have been
prepared by MRC, with input from the mining
contractor.
• Royalties have been calculated at 5% of sales revenue
Criteria JORC Code Explanation Commentary
filtered slimes, from the processing plant will be
pumped separately to the mining void for co-disposal.
The tailings and filtered slimes will be allowed to settle
in the containment cells. Clean water will be decanted
from the containment cells and recycled to the
processing plant for reuse in processing. Davies Lynn
& Partners has been engaged for technical inputs and
design of waste storage facilities for tailings
management.
• 3D- Dig software used for tailing deposition planning
and simulate Co- disposal into backfill and its long-term
impact.
• Backfilled tailings will be covered with returned (dry)
overburden.
• A rehabilitation management plan and standard
operation procedure has been prepared by
Enviroworks.
• Rehabilitation will be undertaken as soon as the mining
path allows. Backfilled tailings and returned
overburden will be profiled to mimic original topography
as closely as possible before topsoil is replaced for
rehabilitation and reseeding,where required.
Costs The derivation of, or
assumptions made, regarding
projected capital costs in the
study.
The methodology used to
estimate operating costs.
Allowances made for the content
of deleterious elements.
The source of exchange rates
used in the study.
Derivation of transportation
charges.
The basis for forecasting or
source of treatment and refining
charges, penalties for failure to
meet specification, etc.
The allowances made for
royalties payable, both
Government and private.		 • MinSol Engineering and Obsideo Consulting prepared a
preliminary capital cost estimate for the Western
Strandline Project based on Association for the
Advancement of Cost Engineering cost estimation
guidelines.
• The Project included engineering, design, procurement,
and construction of a 1.2Mtpa (base case, stage1) wet
processing facility, using conventional crushing,
scrubbing and gravity separation technology. Much of
the processing plan and infrastructure required for the
processing operation was already owned by MRC, with
only minor modifications or upgrades required.
• Front end scrubbing and crushing along with a new
thickener and filters have been installed on site and
commissioned. Refer ASX announcement entitled
‘Commissioning complete for Inland Strands Ore’
dated 27 March 2023.
• The expansion stage has been considered for a
2.4Mtpa mining operation (stage2).
• The operating cost estimate for the operation includes
all costs associated with processing, infrastructure, and
site-based general and administration costs.
• The operating cost inputs have been derived from site
actuals and budget forecasts.
• The mining operating cost estimates have been
prepared by MRC, with input from the mining
contractor.
• Royalties have been calculated at 5% of sales revenue

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 58

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
payable to the government of South Africa.
• All amounts have been modelled in US dollars with
foreign estimated inflows/outflows converted to US
dollars at an average exchange rate of USD/ZAR 17.0
and USD/AUD 1.5 used reflects long term exchange
forecasts.
• Revenue from the Project is derived from the sale of
heavy mineral concentrates.
• The price assumptions are based on contracted sales
agreements.
• Transport and treatment charges as well as other
administration charges incurred on site are all based
upon actual costs being incurred mining at Tormin site.
• Revenue estimates are based on independent market
pricing and life-of-mine concentrate production.
• Forecast prices for heavy mineral products (2023-2028)
were incorporated into the model.
• Revenue estimates are base case only and do not
include any process expansion options or downstream
additions to theprocess flow route.
• The conditions of the global economy are key drivers
for the mineral sand industry and its products. There is
a clear correlation between economic welfare and
consumption of titanium, garnet, and zircon feedstock.
Demand for mineral sands products has historically
been closely linked to growth in global GDP, which has
grown at close to 3% per annum.
• Global demand for titanium feedstock is dominated by
the TiO2 pigment end use. By 2025, TZMI estimates
that global demand for titanium feedstock will reach 8.7
million tonnes titanium dioxide (TiO2), which
corresponds to a compound annual growth rate of
2.6%.
• Ilmenite and Zircon pricing has seen a significant uplift
over the last few years. Zircon and Ilmenite prices
continue to rise in 2023.
• China remains the largest importer of zircon
concentrate, accounting for 99% of global demand.
• The price range of industrial garnet is based on the
application, quality, quantity purchased, source and
type. There are no terminal markets for garnet and no
reliable published prices for products. Products are
sold through negotiations between buyer and seller.
US$154 per tonne has been considered as the long
term base price for garnet concentrate.
• MRC supplies circa 25% of the world's demand for
garnet sands and is one of the top ten independent
zircon and titanium feedstock suppliers.
Criteria JORC Code Explanation Commentary
payable to the government of South Africa.
• All amounts have been modelled in US dollars with
foreign estimated inflows/outflows converted to US
dollars at an average exchange rate of USD/ZAR 17.0
and USD/AUD 1.5 used reflects long term exchange
forecasts.
Revenue
factors		 The derivation of, or
assumptions made regarding
revenue factors including head
grade, metal or commodity
price(s) exchange rates,
transportation and treatment
charges, penalties, net smelter
returns, etc.
The derivation of assumptions
made of metal or commodity
price(s), for the principal metals,
minerals and co-products.		 • Revenue from the Project is derived from the sale of
heavy mineral concentrates.
• The price assumptions are based on contracted sales
agreements.
• Transport and treatment charges as well as other
administration charges incurred on site are all based
upon actual costs being incurred mining at Tormin site.
• Revenue estimates are based on independent market
pricing and life-of-mine concentrate production.
• Forecast prices for heavy mineral products (2023-2028)
were incorporated into the model.
• Revenue estimates are base case only and do not
include any process expansion options or downstream
additions to theprocess flow route.
Market
assessment		 The demand, supply and stock
situation for the particular
commodity, consumption trends
and factors likely to affect supply
and demand into the future.
A customer and competitor
analysis along with the
identification of likely market
windows for the product.
Price and volume forecasts and
the basis for these forecasts.
For industrial minerals the
customer specification, testing
and acceptance requirements
prior to a supply contract.		 • The conditions of the global economy are key drivers
for the mineral sand industry and its products. There is
a clear correlation between economic welfare and
consumption of titanium, garnet, and zircon feedstock.
Demand for mineral sands products has historically
been closely linked to growth in global GDP, which has
grown at close to 3% per annum.
• Global demand for titanium feedstock is dominated by
the TiO2 pigment end use. By 2025, TZMI estimates
that global demand for titanium feedstock will reach 8.7
million tonnes titanium dioxide (TiO2), which
corresponds to a compound annual growth rate of
2.6%.
• Ilmenite and Zircon pricing has seen a significant uplift
over the last few years. Zircon and Ilmenite prices
continue to rise in 2023.
• China remains the largest importer of zircon
concentrate, accounting for 99% of global demand.
• The price range of industrial garnet is based on the
application, quality, quantity purchased, source and
type. There are no terminal markets for garnet and no
reliable published prices for products. Products are
sold through negotiations between buyer and seller.
US$154 per tonne has been considered as the long
term base price for garnet concentrate.
• MRC supplies circa 25% of the world's demand for
garnet sands and is one of the top ten independent
zircon and titanium feedstock suppliers.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 59

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• MRC has offtake agreements in place for garnet and
existing customers for ilmenite and zircon products
from its Tormin mineral sands mine. Product samples
produced from the Project PFS test work indicate the
product quality will meet customer requirements and
have been assessed as such by potential customers.
• Price assumptions are cross referenced against TZMI
assumptions over the coming years.
• Macro-economic assumptions used in the economic
analysis of the Western Inland Strand Ore Reserve
including foreign exchange and discount rates have
been internally generated by MRC and benchmarked
against external sources where applicable.
• Sensitivity analysis was undertaken on key economic
assumptions such as costs and price to ensure the
reserves are robust. Changes in product prices and
costs have the potential to increase or decrease the
total Ore Reserve. Cashflows from the optimized Ore
Reserve on current assumptions produce a financially
viableproject.
• MSR has been operating at Tormin since 2014. The
local community is generally familiar with the
characteristics of mining, processing and product
transport at Tormin, and there are other resource
extraction operations within the district. Stakeholder
consultation conducted to date has identified that the
majority of the community is supportive of the Project.
• MSR is one of the most important workplaces in the
area, and it is an important part of the local economy of
the district.
• Expansion of the processing plant will result in securing
long term employment that contributes to the local and
regional economies.
• Important social programs will be continued and
extended as a result of the extended mine life. MSR’s
strong investment in the social and economic
upliftment of Historically Disadvantaged South Africans
(“HDSA”) and the ongoing support of its Black
Economic Empowerment (“BEE”) partners in the
Tormin Mineral Sands Operation will continue to grow
under the proposed mine expansion.
• The implementation of the 2019-2023 Social and
Labour Plan (Generation 3) is nearing its end where an
amount of ZA38.8 million was committed to programs
such as local enterprise development, education and
infrastructure projects and initiatives.
• MSR is currently in the process of generating the
Generation 4 SLP with new commitments for the 2024
– 2029period.
Criteria JORC Code Explanation Commentary
• MRC has offtake agreements in place for garnet and
existing customers for ilmenite and zircon products
from its Tormin mineral sands mine. Product samples
produced from the Project PFS test work indicate the
product quality will meet customer requirements and
have been assessed as such by potential customers.
• Price assumptions are cross referenced against TZMI
assumptions over the coming years.
Economic The inputs to the economic
analysis to produce the net
present value (NPV) in the study,
the source and confidence of
these economic inputs including
estimated inflation, discount rate,
etc.
NPV ranges and sensitivity to
variations in the significant
assumptions and inputs.		 • Macro-economic assumptions used in the economic
analysis of the Western Inland Strand Ore Reserve
including foreign exchange and discount rates have
been internally generated by MRC and benchmarked
against external sources where applicable.
• Sensitivity analysis was undertaken on key economic
assumptions such as costs and price to ensure the
reserves are robust. Changes in product prices and
costs have the potential to increase or decrease the
total Ore Reserve. Cashflows from the optimized Ore
Reserve on current assumptions produce a financially
viableproject.
Social The status of agreements with
key stakeholders and matters
leading to social licence to
operate.		 • MSR has been operating at Tormin since 2014. The
local community is generally familiar with the
characteristics of mining, processing and product
transport at Tormin, and there are other resource
extraction operations within the district. Stakeholder
consultation conducted to date has identified that the
majority of the community is supportive of the Project.
• MSR is one of the most important workplaces in the
area, and it is an important part of the local economy of
the district.
• Expansion of the processing plant will result in securing
long term employment that contributes to the local and
regional economies.
• Important social programs will be continued and
extended as a result of the extended mine life. MSR’s
strong investment in the social and economic
upliftment of Historically Disadvantaged South Africans
(“HDSA”) and the ongoing support of its Black
Economic Empowerment (“BEE”) partners in the
Tormin Mineral Sands Operation will continue to grow
under the proposed mine expansion.
• The implementation of the 2019-2023 Social and
Labour Plan (Generation 3) is nearing its end where an
amount of ZA38.8 million was committed to programs
such as local enterprise development, education and
infrastructure projects and initiatives.
• MSR is currently in the process of generating the
Generation 4 SLP with new commitments for the 2024
– 2029period.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 60

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• MSR has been operating successfully in the region for
more than 9 years to date.
• Prospecting right (PR) 10262 was granted in January
2020 and there is a Mining Right (162&163EMR) in
place, granted on 30 June 2020 which covers a
significant part of the Ore Reserve. All mineral permits
associated with the Ore Reserves Estimate are in good
standing.
• The company is planning to lodge an MR application
over the 10262 Prospecting Right outside of the
current Extended Mining Right (EMR). There is a
reasonable expectation that the new MR will be issued
well within the timeframe required for mining of reserve
areas outside of the current EMR.
• Other than the satisfactory completing of a new,
updated Mineral Resource, there are no other known
unresolved matters that are dependent on a third party
that may materially impact the future exploitation of the
reserve.
• The Mineral Resource classifies all mineralisation at
Western Strandline as Measured, Indicated, and
Inferred and 100% of this updated Ore Reserve has
been derived from Measured and Indicated Mineral
Resources.
• The Ore Reserve includes Proven and Probable
classifications.
• Measured Mineral Resources within the EMR have
been converted to Proven Ore Reserves. Measured
Mineral Resources outside of the EMR have been
converted to Probable Ore Reserves to reflect the
current mining permitting status of being under
application.
• All Indicated Mineral Resources have been converted
to Probable Ore Reserves.
• Proven material accounts for 36% of the Ore Reserve,
Probable material accounts for 64% of the Ore
Reserve.
• The classification reflects the Competent Person’s view
of the deposit and impact of current modifying factors.
• Pit optimisations and the proposed mining schedule are
cognisant of the Mineral Resource classification.
Criteria JORC Code Explanation Commentary
Other To the extent relevant, the
impact of the following on the
project and/or on the estimation
and classification of the Ore
Reserves:
Any identified material naturally
occurring risks.
The status of material legal
agreements and marketing
arrangements.
The status of governmental
agreements and approvals
critical to the viability of the
project, such as mineral
tenement status, and
government and statutory
approvals. There must be
reasonable grounds to expect
that all necessary Government
approvals will be received within
the timeframes anticipated in the
Pre- Feasibility or Feasibility
study. Highlight and discuss the
materiality of any unresolved
matter that is dependent on a
third party on which extraction of
the reserve is contingent.		 • MSR has been operating successfully in the region for
more than 9 years to date.
• Prospecting right (PR) 10262 was granted in January
2020 and there is a Mining Right (162&163EMR) in
place, granted on 30 June 2020 which covers a
significant part of the Ore Reserve. All mineral permits
associated with the Ore Reserves Estimate are in good
standing.
• The company is planning to lodge an MR application
over the 10262 Prospecting Right outside of the
current Extended Mining Right (EMR). There is a
reasonable expectation that the new MR will be issued
well within the timeframe required for mining of reserve
areas outside of the current EMR.
• Other than the satisfactory completing of a new,
updated Mineral Resource, there are no other known
unresolved matters that are dependent on a third party
that may materially impact the future exploitation of the
reserve.
Classification The basis for the classification of
the Ore Reserves into varying
confidence categories.
Whether the result appropriately
reflects the Competent Person’s
view of the deposit.
The proportion of Probable Ore
Reserves that have been
derived from Measured Mineral
Resources (if any).		 • The Mineral Resource classifies all mineralisation at
Western Strandline as Measured, Indicated, and
Inferred and 100% of this updated Ore Reserve has
been derived from Measured and Indicated Mineral
Resources.
• The Ore Reserve includes Proven and Probable
classifications.
• Measured Mineral Resources within the EMR have
been converted to Proven Ore Reserves. Measured
Mineral Resources outside of the EMR have been
converted to Probable Ore Reserves to reflect the
current mining permitting status of being under
application.
• All Indicated Mineral Resources have been converted
to Probable Ore Reserves.
• Proven material accounts for 36% of the Ore Reserve,
Probable material accounts for 64% of the Ore
Reserve.
• The classification reflects the Competent Person’s view
of the deposit and impact of current modifying factors.
• Pit optimisations and the proposed mining schedule are
cognisant of the Mineral Resource classification.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 61

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• The Ore Reserve methodology and estimates has been
reviewed internally to Quantified Strategies Pty Ltd by
Principal Consultants as part of normal validation
processes required by MRC.
• Capital and operating costs has been reviewed and
approved byMRC.
• This is an update of the current Ore Reserve Estimate
under the guidelines of the JORC Code (2012).
• The Ore Reserve has been peer reviewed internally
and the Competent Person is confident that it is an
accurate estimate of the Ore Reserve.
• The mining and processing methods selected are
typical for mineral sands and have been demonstrated
in various other mineral sand operations. They are
considered a low risk of impacting the Ore Reserves.
• To date, approximately 1.8Mt of ore has been mined
from the Southern pit and stockpiled on the ROM (high
grade) and in a Low Grade Stockpile. The ROM
stockpiled ore indicates an excellent reconciliation with
the Mineral Resource and Ore Reserve and is currently
being processed. Ore performance is thus far in line
with current modelling.
• There was previously a degree of uncertainty regarding
geotechnical characterisation and the proposed pit
slope parameter set. The geotechnical pit slope
assumptions used in mining of the southern pits as per
the proposed pit slope set have shown excellent
stability and will be used going forward,
notwithstanding any adjustments that may need to be
made in the field due to variation in material
characterisation.
• The PFS upon which the previous maiden Ore Reserve
was based provides a higher degree of confidence in
the modifying factors than usual. Over eight years’
profitable mining at Tormin gives confidence that the
operation costs and product price expectations are
realistic Modifying factors used in this updated Ore
reserve have been modified from the PFS using
actuals and reconciled data to be more accurate.
• All costs used in the optimisation and Ore Reserve
process are supported by an extended operational
history and actual results from MSR operation.
Criteria JORC Code Explanation Commentary
Audits or
reviews		 The results of any audits or
reviews of Ore Reserve
estimates.		 • The Ore Reserve methodology and estimates has been
reviewed internally to Quantified Strategies Pty Ltd by
Principal Consultants as part of normal validation
processes required by MRC.
• Capital and operating costs has been reviewed and
approved byMRC.
Discussion of
relative
accuracy/
confidence		 Where appropriate a statement
of the relative accuracy and
confidence level in the Ore
Reserve estimate using an
approach or procedure deemed
appropriate by the Competent
Person. For example, the
application of statistical or
geostatistical procedures to
quantify the relative accuracy of
the reserve within stated
confidence limits, or, if such an
approach is not deemed
appropriate, a qualitative
discussion of the factors which
could affect the relative accuracy
and confidence of the estimate.
The statement should specify
whether it relates to global or
local estimates, and, if local,
state the relevant tonnages,
which should be relevant to
technical and economic
evaluation. Documentation
should include assumptions
made and the procedures used.
Accuracy and confidence
discussions should extend to
specific discussions of any
applied Modifying Factors that
may have a material impact on
Ore Reserve viability, or for
which there are remaining areas
of uncertainty at the current
study stage.
It is recognised that this may not
be possible or appropriate in all
circumstances. These
statements of relative accuracy
and confidence of the estimate
should be compared with
production data, where available.		 • This is an update of the current Ore Reserve Estimate
under the guidelines of the JORC Code (2012).
• The Ore Reserve has been peer reviewed internally
and the Competent Person is confident that it is an
accurate estimate of the Ore Reserve.
• The mining and processing methods selected are
typical for mineral sands and have been demonstrated
in various other mineral sand operations. They are
considered a low risk of impacting the Ore Reserves.
• To date, approximately 1.8Mt of ore has been mined
from the Southern pit and stockpiled on the ROM (high
grade) and in a Low Grade Stockpile. The ROM
stockpiled ore indicates an excellent reconciliation with
the Mineral Resource and Ore Reserve and is currently
being processed. Ore performance is thus far in line
with current modelling.
• There was previously a degree of uncertainty regarding
geotechnical characterisation and the proposed pit
slope parameter set. The geotechnical pit slope
assumptions used in mining of the southern pits as per
the proposed pit slope set have shown excellent
stability and will be used going forward,
notwithstanding any adjustments that may need to be
made in the field due to variation in material
characterisation.
• The PFS upon which the previous maiden Ore Reserve
was based provides a higher degree of confidence in
the modifying factors than usual. Over eight years’
profitable mining at Tormin gives confidence that the
operation costs and product price expectations are
realistic Modifying factors used in this updated Ore
reserve have been modified from the PFS using
actuals and reconciled data to be more accurate.
• All costs used in the optimisation and Ore Reserve
process are supported by an extended operational
history and actual results from MSR operation.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 62

ASX: MRC ASX: MRC

28 April 2023

JORC TABLE 1 Eastern Strandline Section 1 Sampling Techniques and Data

==> picture [121 x 112] intentionally omitted <==

(Criteria in this section apply to all succeeding sections)

Criteria JORC Code Explanation Commentary
Sampling
techniques		 Nature and quality of sampling (eg
cut channels, random chips, or
specific specialised industry standard
measurement tools appropriate to
the minerals under investigation,
such as down hole gamma sondes,
or handheld XRF instruments, etc).
These examples should not be taken
as limiting the broad meaning of
sampling.
Include reference to measures taken
to ensure sample representivity and
the appropriate calibration of any
measurement tools or systems used.
Aspects of the determination of
mineralisation that are Material to the
Public Report. In cases where
‘industry standard’ work has been
done this would be relatively simple
(eg ‘reverse circulation drilling was
used to obtain 1m samples from
which 3kg was pulverised to produce
a 30g charge for fire assay’). In other
cases, more explanation may be
required, such as where there is
coarse gold that has inherent
sampling problems. Unusual
commodities or mineralisation types
(eg submarine nodules) may warrant
disclosure of detailed information.		 • The current resource database for the Eastern
Strandline consists of 120 aircore holes,
representing 4,132 m of vertical drilling.
• Samples taken from surface to bedrock.
• Mineralogical studies and grade testwork
undertaken according to mine control standards
within Tormin mine site laboratory.
• One-metre air core drill samples from a cyclone
were collected in 20-25kg plastic bags.
• Each bag was riffle split into two pre-numbered
calico bags of ~3kg each and the remainder of the
samples collected in a large plastic bag.
• 3kg samples were submitted directly to the Tormin
mine laboratory to be analysed for oversize, slimes
and heavy minerals.
• The laboratory sample was dried, de-slimed
(removal of -45 micron fraction) and screened
(+2mm oversize).
• 200g of sample split to use for heavy liquid
separation using Bromoform with density range
between 2.92 and 2.96g/ml to define Total Heavy
Mineral (THM) content.
Drilling
techniques		 Drill type (eg core, reverse
circulation, open-hole hammer,
rotary air blast, auger, Banka, sonic,
etc) and details (eg core diameter,
triple or standard tube, depth of
diamond tails, face- sampling bit or
other type, whether core is oriented
and if so, by what method, etc).		 • Air core drilling was by Wallis drilling (Mantis 80 rig).
Air core drilling is considered a standard industry
drilling
method
for
Heavy
Mineral
Sand
HMS
mineralisation.
• 85mm drill bits and rods were used.
• All holes were drilled vertically and because they are
relatively short holes, downhole surveying was not
considered necessary.
Drill sample
recovery		 Method of recording and assessing
core and chip sample recoveries and
results assessed.
Measures taken to maximise sample
recovery and ensure representative
nature of the samples.
Whether a relationship exists
between sample recovery andgrade		 • Metric samples from aircore drill were taken and riffled
down to a representative sample for heavy liquid
separation and XRD/XRF.
• No sample loss or cavitation were experienced. Dry
samples may lose some of their slimes fraction due to
blowing out of sampling equipment, however HM are
not affected.
• Sample recovery needs to be statistically assessed.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 63

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Each hole was logged by a geologist on pre-printed log
sheets.
• Geological and lithological observations per depth were
recorded together with field sections and hand drawn
down-the-hole logs.
• Special attention was given to heavy minerals
intersected as a guide to potential marine strandlines
and marine diamond deposits.
• Percentage
HMS
was
recorded
from
visual
observations as well as the magnetic content of each
metre by handheld pen magnet.
• Marine gravels and contact with basement bedrock
recorded as maximum depth of mineralisation.
• Each 1m sample was washed and sieved to obtain a
representative sample stored in numbered chiptrays.
• Sampling over 1m down the hole intervals as
determined by 1m marks on the rig mast.
• Drill samples were riffle split into approximately 3kg
samples to be assayed.
• All samples were dry.
• Technicians undertaking the splitting were supervised
by mine site geologists to ensure sampling quality.
• The sample sizes were considered suitable based
on industry practices of mineral sand exploration.
This, however, should be demonstrated with the
appropriate sampling studies.
• Field duplicate samples were riffled for the
Tormin mine laboratory and external QA/QC checks
for every 25th sample.
• Lab duplicate samples were split for the Tormin mine
laboratory and for external QA/QC checks (1 in 50).
Splitting is from a 1 in 8 rotary splitter.
• All sample analyses were undertaken by the Tormin
mine laboratory.
• The mine owns and operates a state of the art heavy
liquid separation (HLS) lab using TBE with density
range between 2.92 and 2.96g/ml with Panalytical
XRD machines (the Rietveld method after HLS in an
automated mode setup). All grades reported are from
XRD results on heavy liquid sink.
• Industrial laboratory XRF machines (Panalytical
Epsilon 3 ED) are used by Tormin mine as a grade
verification check on the XRD zircon content.
• The Tormin mine laboratory completes its own internal
Criteria JORC Code Explanation Commentary
and whether sample bias may have
occurred due to preferential loss/gain
of fine/coarse material.
Logging Whether core and chip samples have
been geologically and geotechnically
logged to a level of detail to support
appropriate Mineral Resource
estimation, mining studies and
metallurgical studies.
Whether logging is qualitative or
quantitative in nature. Core (or
costean, channel, etc) photography.
The total length and percentage of
the relevant intersections logged.		 • Each hole was logged by a geologist on pre-printed log
sheets.
• Geological and lithological observations per depth were
recorded together with field sections and hand drawn
down-the-hole logs.
• Special attention was given to heavy minerals
intersected as a guide to potential marine strandlines
and marine diamond deposits.
• Percentage
HMS
was
recorded
from
visual
observations as well as the magnetic content of each
metre by handheld pen magnet.
• Marine gravels and contact with basement bedrock
recorded as maximum depth of mineralisation.
• Each 1m sample was washed and sieved to obtain a
representative sample stored in numbered chiptrays.
Sub-
sampling
techniques
and sample
preparation		 If core, whether cut or sawn and
whether quarter, half or all core taken.
If non-core, whether riffled, tube
sampled, rotary split, etc and
whether sampled wet or dry.
For all sample types, the nature,
quality, and appropriateness of the
sample preparation technique.
Quality control procedures adopted
for all sub-sampling stages to
maximise representivity of samples.
Measures taken to ensure that the
sampling is representative of the in
situ material collected, including for
instance results for field
duplicate/second-half sampling.
Whether sample sizes are
appropriate to the grain size of the
material being sampled.		 • Sampling over 1m down the hole intervals as
determined by 1m marks on the rig mast.
• Drill samples were riffle split into approximately 3kg
samples to be assayed.
• All samples were dry.
• Technicians undertaking the splitting were supervised
by mine site geologists to ensure sampling quality.
• The sample sizes were considered suitable based
on industry practices of mineral sand exploration.
This, however, should be demonstrated with the
appropriate sampling studies.
• Field duplicate samples were riffled for the
Tormin mine laboratory and external QA/QC checks
for every 25th sample.
• Lab duplicate samples were split for the Tormin mine
laboratory and for external QA/QC checks (1 in 50).
Splitting is from a 1 in 8 rotary splitter.
Quality of
assay data
and
laboratory
tests		 The nature, quality and
appropriateness of the assaying and
laboratory procedures used and
whether the technique is considered
partial or total.
For geophysical tools,
spectrometers, handheld XRF
instruments, etc, the parameters
used in determining the analysis
including instrument make and
model, reading times, calibrations
factors applied and their derivation,
etc.		 • All sample analyses were undertaken by the Tormin
mine laboratory.
• The mine owns and operates a state of the art heavy
liquid separation (HLS) lab using TBE with density
range between 2.92 and 2.96g/ml with Panalytical
XRD machines (the Rietveld method after HLS in an
automated mode setup). All grades reported are from
XRD results on heavy liquid sink.
• Industrial laboratory XRF machines (Panalytical
Epsilon 3 ED) are used by Tormin mine as a grade
verification check on the XRD zircon content.
• The Tormin mine laboratory completes its own internal

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 64

ASX: MRC ASX: MRC 28 April 2023

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
QA/QC using Certified Reference Material (“CRM”) at
the rate of approximately 1 in 50 and sending every
25th sample to the external labs.
• 36 field duplicates plus 11 blank samples, and 20
CRMs were included into the sample stream and
submitted to the lab.
• The CRMs, blank and duplicate sample results are
within accepted limits.
• External sampling checks for XRD have been done by
XRD Analytical and Consulting (15 samples) in
Pretoria
• The adopted QA/QC protocols are appropriate for the
Mineral Resource and public reporting and QA/QC
system returning acceptable results.
• QEMSCAN testwork by SJT MetMin was used for
verification of the mineral assemblage and the
component
mineralogy.
Automated-SEM
by
QEMSCAN analyses was used to determine the bulk
modal
mineralogical
composition,
mineralogical
calculated
chemical
composition,
particle
characteristics and particle size distribution of each
sample. The mineralogical composition and mineral
phases identified in this study were similar to those
identified by XRD at MSR’s internal laboratory.
• No geophysical tools or handheld instruments were
utilised in the sample analysis.
• All sampling was undertaken by mine site personnel
overseen by a qualified and experienced mine
geologist and independent consultants.
• All sample preparation was carried out by trained staff,
supervised by chemists and the laboratory manager.
• The lab results and logging have been reviewed by
external consultants to MSR as well as internally by
MRC’s exploration manager.
• 12 holes (316m) from historical drilling were verified
and included into the resource model.
• The
drillhole
logs
have
been
converted
to
electronically stored formats and stored in a database
provided by Maxgeo (DataShed). This database is
hosted on an offsite server supplied by Maxgeo and
managed by their trained database staff.
• No adjustments to assay data results were made
outside the standard XRD and XRF calibration
software beingused.
Criteria JORC Code Explanation Commentary
Nature of quality control procedures
adopted (eg standards, blanks,
duplicates, external laboratory
checks) and whether acceptable
levels of accuracy (ie lack of bias) and
precision have been established.		 QA/QC using Certified Reference Material (“CRM”) at
the rate of approximately 1 in 50 and sending every
25th sample to the external labs.
• 36 field duplicates plus 11 blank samples, and 20
CRMs were included into the sample stream and
submitted to the lab.
• The CRMs, blank and duplicate sample results are
within accepted limits.
• External sampling checks for XRD have been done by
XRD Analytical and Consulting (15 samples) in
Pretoria
• The adopted QA/QC protocols are appropriate for the
Mineral Resource and public reporting and QA/QC
system returning acceptable results.
• QEMSCAN testwork by SJT MetMin was used for
verification of the mineral assemblage and the
component
mineralogy.
Automated-SEM
by
QEMSCAN analyses was used to determine the bulk
modal
mineralogical
composition,
mineralogical
calculated
chemical
composition,
particle
characteristics and particle size distribution of each
sample. The mineralogical composition and mineral
phases identified in this study were similar to those
identified by XRD at MSR’s internal laboratory.
• No geophysical tools or handheld instruments were
utilised in the sample analysis.
Verification
of sampling
and
assaying		 The
verification
of significant
intersections by either independent or
alternative company personnel.
The use of twinned holes.
Documentation of primary data,
data entry procedures, data
verification, data storage (physical
and electronic) protocols.
Discuss any adjustment to assay
data.		 • All sampling was undertaken by mine site personnel
overseen by a qualified and experienced mine
geologist and independent consultants.
• All sample preparation was carried out by trained staff,
supervised by chemists and the laboratory manager.
• The lab results and logging have been reviewed by
external consultants to MSR as well as internally by
MRC’s exploration manager.
• 12 holes (316m) from historical drilling were verified
and included into the resource model.
• The
drillhole
logs
have
been
converted
to
electronically stored formats and stored in a database
provided by Maxgeo (DataShed). This database is
hosted on an offsite server supplied by Maxgeo and
managed by their trained database staff.
• No adjustments to assay data results were made
outside the standard XRD and XRF calibration
software beingused.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 65

ASX: MRC ASX: MRC 28 April 2023

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Hole collars were surveyed by DGPS accurate
to within centimetres by mine surveyors.
• Down hole surveys for shallow vertical air core
holes are not required.
• WGS 84 datum and UTM/ zone 34S coordinate
system is used.
• Systematic grade spacing used in the drilling
program was initially 1000m x 20m containing 9
fence lines.
• Each drillhole is spaced 20m apart along each
drill line perpendicular to the strandline inferred
strike.
• 11 infill fence lines with 500mx 25m and 250mx 25m
grade were drilled between the primary lines.
• 12 holes from historical drilling were verified and
included into the resource model.
• Vertical drilling to intersect sub-horizontal strata.
• Orientation of the drillholes will not result in sampling
bias.
• Sampling was carried out using pre-printed calico
bags to prevent mislabelling. Reject sample was
temporarily stored in plastic bags.
• All sample bag numbers were logged against the
drillhole by the site geologist.
• Three samples per metre drilled were produced. The
reject was temporarily stored in a plastic bag for
reference.
Two
samples
were
collected
in
prenumbered calico bags for external QA/QC and one
were sent directly to the mine lab at the end of each
day’s drilling in a secure area.
• The Tormin mine laboratory inspected the submitted
samples and did not report any missing, nor any error
of the samples against the sample lists.
• Where external laboratories were used, their chain
of custody controls for shipping and sample
submission were used.
• The lab results and logging have been reviewed by
external consultants to MSR and internally as part of
normal validation processes by MRC.
Criteria JORC Code Explanation Commentary
Location of
data points		 Accuracy and quality of surveys used
to locate drillholes (collar and down-
hole surveys), trenches, mine
workings and other locations used in
Mineral Resource estimation.
Specification of the grid system used.
Quality and adequacy of topographic
control.		 • Hole collars were surveyed by DGPS accurate
to within centimetres by mine surveyors.
• Down hole surveys for shallow vertical air core
holes are not required.
• WGS 84 datum and UTM/ zone 34S coordinate
system is used.
Data
spacing and
distribution		 Data spacing for reporting of
exploration results.
Whether the data spacing and
distribution are sufficient to establish
the degree of geological and grade
continuity appropriate for the Mineral
Resource and Ore Reserve
estimation procedure(s) and
classifications applied.
Whether sample compositing has
been applied.		 • Systematic grade spacing used in the drilling
program was initially 1000m x 20m containing 9
fence lines.
• Each drillhole is spaced 20m apart along each
drill line perpendicular to the strandline inferred
strike.
• 11 infill fence lines with 500mx 25m and 250mx 25m
grade were drilled between the primary lines.
• 12 holes from historical drilling were verified and
included into the resource model.
Orientation
of data in
relation to
geological
structure		 Whether the orientation of sampling
achieves
unbiased
sampling
of
possible structures and the extent to
which this is known, considering the
deposit type.
If the relationship between the drilling
orientation and the orientation of key
mineralised structures is considered
to have introduced a sampling bias,
this should be assessed and
reported if material.		 • Vertical drilling to intersect sub-horizontal strata.
• Orientation of the drillholes will not result in sampling
bias.
Sample
security		 The measures taken to ensure sample
security.		 • Sampling was carried out using pre-printed calico
bags to prevent mislabelling. Reject sample was
temporarily stored in plastic bags.
• All sample bag numbers were logged against the
drillhole by the site geologist.
• Three samples per metre drilled were produced. The
reject was temporarily stored in a plastic bag for
reference.
Two
samples
were
collected
in
prenumbered calico bags for external QA/QC and one
were sent directly to the mine lab at the end of each
day’s drilling in a secure area.
• The Tormin mine laboratory inspected the submitted
samples and did not report any missing, nor any error
of the samples against the sample lists.
• Where external laboratories were used, their chain
of custody controls for shipping and sample
submission were used.
Audits or
reviews		 The results of any audits or reviews of
sampling techniques and data.		 • The lab results and logging have been reviewed by
external consultants to MSR and internally as part of
normal validation processes by MRC.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 66

ASX: MRC ASX: MRC

28 April 2023

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section)

==> picture [121 x 112] intentionally omitted <==
Criteria JORC Code Explanation Commentary
Mineral
tenement and
land tenure
status		 Type, reference name/number,
location and ownership including
agreements or material issues
with third parties such as joint
ventures, partnerships, overriding
royalties, native title interests,
historical sites, wilderness or
national park and environmental
settings.
The security of the tenure held at
the time of reporting along with
any known impediments to
obtaining a licence to operate in
the area.		 • The area has a granted prospecting right (WC
30/5/1/1/2/10262 PR) in the name of Mineral Sands
Resources (Pty) Ltd, a subsidiary of ASX listed Mineral
Commodities Ltd (ASX: MRC).
• This Prospecting Right (Inland Strand) incorporates
an area approximately 12km in length covering 1,741
hectares of coastal area adjacent to the existing
beach mining operations on the Company-owned
farm Geelwal Karoo 262.
Exploration
done by other
parties		 Acknowledgment and appraisal of
exploration by other parties.		 • The general area has been investigated and mined for
heavy mineral deposits as far back as the 1930s
(Haughton, 1931). Subsequent geological surveys
and exploration programs investigated the distribution,
mineralogy and economic potential of the heavy
mineral sands along the coastline of Geelwal Karoo
(Toerien & Groeneveld 1957, Abele 1989, Swart 1990,
Barnes 1998) and Trans Hex 1989-1991).
• De Beers drilled 9 fence lines across the property and
bulk sampled the area in the 1960s.
• During 1999, Trans Hex conducted additional onshore
drilling of strandlines and identified the inland raised
beach deposits containing heavy minerals. Trans Hex
subsequently bulk sampled the material by digging
several trenches in 1999-2000.
• Geelwal Karoo Diamante conducted small diameter
drilling to a depth of 40m between 2000 and 2002, with
a total of 42 drillholes.
• Extensive work, including mining of the inshore
strandlines along the coast, was undertaken by
Namakwa Diamond Company in 2003-2005. This
work also identified the presence of the inland
strands.
Geology Deposit type, geological setting
and style of mineralisation.		 • The western coastal plain of South Africa contains a
significant resource of detrital heavy minerals by
world standards.
• The heavy mineral sand deposits occur in a current
active beach environment (e.g., Tormin Beaches and
Northern Beaches) as well as in older palaeo-beach
raised strandlines found inland (inland strandlines)
e.g., Tronox Namakwa Sands.
• Apart from the mid-Jurassic, Cretaceous and Tertiary
(Paleogene) sediments along the coast, numerous

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 67

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
small fossiliferous, marine and terrestrial deposits of
Neogene age outcrop along the coastal zone.
• The onshore mineral sands are marine palaeo-
terraces “Inland Strands”, aeolian sands and fluvial
sediments. These targets were formed during
Miocene,
Pliocene
and
Quaternary/Pleistocene
coastal transgression (sea move inland) and
regression cycles.
• The lithological units of the Eastern Strandline can be
described as below:
a.
Orange Feldspathic Sand – non mineralized;
b.
Orange Feldspathic Sand – mineralized;
c.
Strandline – mineralized;
d.
Base pebble beds – mineralized; and
e.
Schist basement.
•
For purposes of estimation, the lithology has been
grouped intoOrange Feldspathic Sand, Strandline
mineralisation, Gravel and Schist basement.
• The orebody hosts mineralisation in all geological
units/layers except for the schist basement.
• The minimum hole length is 6m, maximum 120m and
average depth of drilling 34.4m.
• East collar ranges – 220,767mE to 227,835mE.
• North collar ranges – 6,501,1522mN to 6,511,251mN.
• Height collar ranges- 49.88m to 125.26m.
• Azimuth ranges/dip ranges – vertical drilling.
• Not relevant.
• No grade cutting of HM values were undertaken.
• No metal equivalents were used for reporting of
Mineral Resources.
Criteria JORC Code Explanation Commentary
small fossiliferous, marine and terrestrial deposits of
Neogene age outcrop along the coastal zone.
• The onshore mineral sands are marine palaeo-
terraces “Inland Strands”, aeolian sands and fluvial
sediments. These targets were formed during
Miocene,
Pliocene
and
Quaternary/Pleistocene
coastal transgression (sea move inland) and
regression cycles.
• The lithological units of the Eastern Strandline can be
described as below:
a.
Orange Feldspathic Sand – non mineralized;
b.
Orange Feldspathic Sand – mineralized;
c.
Strandline – mineralized;
d.
Base pebble beds – mineralized; and
e.
Schist basement.
•
For purposes of estimation, the lithology has been
grouped intoOrange Feldspathic Sand, Strandline
mineralisation, Gravel and Schist basement.
• The orebody hosts mineralisation in all geological
units/layers except for the schist basement.
Drill hole
Information		 A summary of all information
material to the understanding of
the exploration results including a
tabulation of the following
information for all Material drill
holes:
Easting and northing of the drill
hole collar
elevation or RL (Reduced Level –
elevation above sea level in
metres) of the drill hole collar
dip and azimuth of the hole
down hole length and interception
depth
hole length.
If the exclusion of this information
is justified on the basis that the
information is not Material and
this exclusion does not detract
from the understanding of the
report, the Competent Person
should clearly explain why this is
the case.		 • The minimum hole length is 6m, maximum 120m and
average depth of drilling 34.4m.
• East collar ranges – 220,767mE to 227,835mE.
• North collar ranges – 6,501,1522mN to 6,511,251mN.
• Height collar ranges- 49.88m to 125.26m.
• Azimuth ranges/dip ranges – vertical drilling.
Data
aggregation
methods		 In reporting Exploration Results,
weighting averaging techniques,
maximum and/or minimum grade
truncations (eg cutting of high
grades) and cut-off grades are
usually Material and should be		 • Not relevant.
• No grade cutting of HM values were undertaken.
• No metal equivalents were used for reporting of
Mineral Resources.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 68

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Not relevant.
• The strandline mineralisation is sub-horizontal in
nature and the air core drilling intercepts are vertical.
• Thickness of intercept reported is therefore true
thickness of the mineralisation.
• Maps, sections and plan views are provided in the
main body of the resource report.
• Statistics of drillhole grades used during the Mineral
Resource Estimate are contained in the main body of
the report.
• This report provides the total information available to
date and is considered to represent a balanced
report.
• Aeromagnetic geophysical data has been used for
drilling target delineations.
• Only 12 holes (316m) from historical drilling were
verified and included into the resource model.
Criteria JORC Code Explanation Commentary
stated.
Where aggregate intercepts
incorporate short lengths of high
grade results and longer lengths
of low grade results, the
procedure used for such
aggregation should be stated and
some typical examples of such
aggregations should be shown in
detail.
The assumptions used for any
reporting of metal equivalent
values should be clearly stated.
Relationship
between
mineralisation
widths and
intercept
lengths		 These relationships are
particularly important in the
reporting of Exploration Results.
If the geometry of the
mineralisation with respect to the
drill hole angle is known, its
nature should be reported.
If it is not known and only the
down hole lengths are reported,
there should be a clear statement
to this effect (eg ‘down hole
_length, true width not known’). _		 • Not relevant.
• The strandline mineralisation is sub-horizontal in
nature and the air core drilling intercepts are vertical.
• Thickness of intercept reported is therefore true
thickness of the mineralisation.
Diagrams Appropriate maps and sections
(with scales) and tabulations of
intercepts should be included for
any significant discovery being
reported These should include,
but not be limited to a plan view of
drill hole collar locations and
appropriate sectional views.		 • Maps, sections and plan views are provided in the
main body of the resource report.
Balanced
reporting		 Where comprehensive reporting of
all Exploration Results is not
practicable, representative
reporting of both low and high
grades and/or widths should be
practiced to avoid misleading
reporting of Exploration Results.		 • Statistics of drillhole grades used during the Mineral
Resource Estimate are contained in the main body of
the report.
• This report provides the total information available to
date and is considered to represent a balanced
report.
Other
substantive
exploration
data		 Other exploration data, if
meaningful and material, should
be reported including (but not
limited to): geological
observations; geophysical survey
results; geochemical survey
results; bulk samples – size and
method of treatment; metallurgical
test results; bulk density,
groundwater, geotechnical and
rock characteristics; potential
deleterious or contaminating		 • Aeromagnetic geophysical data has been used for
drilling target delineations.
• Only 12 holes (316m) from historical drilling were
verified and included into the resource model.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 69

ASX: MRC ASX: MRC 28 April 2023

ASX:
MRC
ASX: MRC
MRC
ASX: MRC		 28 April 2023 28 April 2023 28 April 2023
Commentary
• Further drilling is planned to produce a
Measured/Indicated resource over the Eastern Strandline.
Criteria JORC Code Explanation Commentary
substances.
Further work The nature and scale of planned
further work (eg tests for lateral
extensions or depth extensions or
large-scale step-out drilling).
Diagrams clearly highlighting the
areas of possible extensions,
including the main geological
interpretations and future drilling
areas, provided this information is
not commercially sensitive.		 • Further drilling is planned to produce a
Measured/Indicated resource over the Eastern Strandline.
Criteria JORC Code Explanation Commentary
Database
integrity		 Measures taken to ensure that
data has not been corrupted by,
for example, transcription or
keying errors, between its initial
collection and its use for Mineral
Resource estimation purposes.
Data validation procedures used.		 • The data was plotted and plots whereas expected with no
mis- plots or extraneous data found. Maximum and minimum
values and average values were all within the norm.
Duplicate values were confirmed as such. The coordinates
were confirmed as being WGS84 UTM zone 34S.
• Data is stored in an offsite database hosted by Maxgeo.
Site visits Comment on any site visits
undertaken by the Competent
Person and the outcome of
those visits.
If no site visits have been
undertaken indicate why this is
the case.		 • The previous Competent Person was a full-time employee
of Mineral Commodities Ltd. However, the new Competent
Person as of 2022 has not had sufficient time to visit site. A
site visit is planned for 2023.
Geological
interpretation		 Confidence in (or conversely,
the uncertainty of) the
geological interpretation of the
mineral deposit.
Nature of the data used and of
any assumptions made.
The effect, if any, of alternative
interpretations on Mineral
Resource estimation.
The use of geology in guiding
and controlling Mineral
Resource estimation.
The factors affecting continuity
_both ofgrade andgeology. _		 • The deposit is a classic inland strandline mineral sands
deposit with no doubt as to its genesis.
• The grain size characteristics are interpreted to support
an offshore depositional setting, closer to the shoreline
position.
• Samples were collected for resource estimation purposes.
• The geology/topography of the deposit has been used to
constrain the resource envelope. The data was partitioned
into areas (subsets) based on geology/topography. The
base of the deposit is defined by the underlying bedrock, the
landward side by barren land and sand dunes.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 70

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
• The total deposit, inside MSR controlled Prospecting
Rights, has a strike length along the coastline of
approximately 7,400m and an average width of 60m,
ranging from over 100m wide in the south to 30m wide in
the north. The resource area includes northern part in
4.4km length and southern part in 3km length. It is
developed from surface to a maximum depth of 72m and
the average resource thickness is approximately 40m. The
deposit occurs from the surface down.
• Micromine software was used to domain and estimate each
of the valuable heavy minerals. Domains were snapped to
the nearest true intersection from sampling.
• Assays were all generally 1.0m, with some assayed field
composited to 4m in length, and so the entire data set was
composited to 1m.
• No Outliers were present, as such no outlier restriction or top
cutting was required.
• Data
was
extrapolated
between
data
points
and
approximately half of the drill spacing beyond. Data points
are nominally 250 x 20m to 500 x 20m for Indicated and
1000m x 20m for Inferred. There are generally between 2-11
drill holes per line.
• Ordinary kriging was used as the primary estimator. Each
variable was estimated separately, using variograms created
for the Western Strandline resource, which is similar in
population.
• An anisotropic search was used, with the variable ratios of
direction of greatest continuity: Across the continuity: depth.
1:0.4:0. A maximum search distance of 1,000m was used to
ensure the resource was filling with estimated data. Tight
sample numbers were used to reduce the smearing effects
of using a large search. Octant searching was used, with
maximum points per sector of 4. Minimum points to estimate
a block were 4.
• This is a resource estimate and mining parameters are not
used beyond normal global parameters of grades,
dimensions, and accessibility.
• An in-depth validation process was used to test the
robustness of the modelled data, including visual checks,
check estimates (inverse distance and nearest neighbor),
swath plots and detailed statistical comparisons.
• Mineral Resources have not been previously estimated for
the Eastern Strandline.
Criteria JORC Code Explanation Commentary
Dimensions The extent and variability of the
Mineral Resource expressed as
length (along strike or
otherwise), plan width, and
depth below surface to the
upper and lower limits of the
Mineral Resource.		 • The total deposit, inside MSR controlled Prospecting
Rights, has a strike length along the coastline of
approximately 7,400m and an average width of 60m,
ranging from over 100m wide in the south to 30m wide in
the north. The resource area includes northern part in
4.4km length and southern part in 3km length. It is
developed from surface to a maximum depth of 72m and
the average resource thickness is approximately 40m. The
deposit occurs from the surface down.
Estimation and
modelling
techniques		 The nature and appropriateness
of the estimation technique(s)
applied and key assumptions,
including treatment of extreme
grade values, domaining,
interpolation parameters and
maximum distance of
extrapolation from data points. If
a computer assisted estimation
method was chosen, include a
description of computer
software and parameters used.
The availability of check
estimates, previous estimates
and/or mine production records
and whether the Mineral
Resource estimate takes
appropriate account of such
data.
The assumptions made
regarding recovery of by-
products.
Estimation of deleterious
elements or other non-grade
variables of economic
significance (eg sulphur for acid
mine drainage characterisation).
In the case of block model
interpolation, the block size in
relation to the average sample
spacing and the search
employed.
Any assumptions behind
modelling of selective mining
units.
Any assumptions about
correlation between variables.
Description of how the
geological interpretation was
used to control the resource
estimates.
Discussion of basis for using or
not using grade cutting or
capping.
Theprocess of validation, the		 • Micromine software was used to domain and estimate each
of the valuable heavy minerals. Domains were snapped to
the nearest true intersection from sampling.
• Assays were all generally 1.0m, with some assayed field
composited to 4m in length, and so the entire data set was
composited to 1m.
• No Outliers were present, as such no outlier restriction or top
cutting was required.
• Data
was
extrapolated
between
data
points
and
approximately half of the drill spacing beyond. Data points
are nominally 250 x 20m to 500 x 20m for Indicated and
1000m x 20m for Inferred. There are generally between 2-11
drill holes per line.
• Ordinary kriging was used as the primary estimator. Each
variable was estimated separately, using variograms created
for the Western Strandline resource, which is similar in
population.
• An anisotropic search was used, with the variable ratios of
direction of greatest continuity: Across the continuity: depth.
1:0.4:0. A maximum search distance of 1,000m was used to
ensure the resource was filling with estimated data. Tight
sample numbers were used to reduce the smearing effects
of using a large search. Octant searching was used, with
maximum points per sector of 4. Minimum points to estimate
a block were 4.
• This is a resource estimate and mining parameters are not
used beyond normal global parameters of grades,
dimensions, and accessibility.
• An in-depth validation process was used to test the
robustness of the modelled data, including visual checks,
check estimates (inverse distance and nearest neighbor),
swath plots and detailed statistical comparisons.
• Mineral Resources have not been previously estimated for
the Eastern Strandline.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 71

ASX: MRC ASX: MRC 28 April 2023

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
• The resource tonnages are estimated on a dry basis.
• Final report was based on a 2% THM cut off grade for blocks
as this is the current minimum grade where there is a
reasonable expectation for eventual extraction.
• 2% cut off grade was based on grade-tonnage curves with
respect to THM and VHM assemblage with the grade
distribution along the length of the orebody. Also taken into
account was current processing plant performance and
other similarlydeposits in the region.
• The resource is considered as dry mining feed and
mineralisation can be any depth or width. Dry mining
techniques are preferred in situations involving high grades.
• Mining would be through conventional open pit methods.
• The thickness and continuous nature of the mineralisation,
supports a bulk mining method.
• The Company believes there are no mining factors which
affect the assumption that the deposit has reasonable
prospects for eventual economic mining.
• Metallurgical recovery is similar to other mineral sand
operations.
• Metallurgical parameters have been taken from the
metallurgical tests, and metallurgical test work results
support the recovery.
• To date, the Company considers there are no metallurgical
factors which are likely to significantly affect the assumption
that the deposit has reasonable prospects of eventual
economic extraction.
Criteria JORC Code Explanation Commentary
checking process used, the
comparison of model data to
drill hole data, and use of
reconciliation data if available.
Moisture Whether the tonnages are
estimated on a dry basis or with
natural moisture, and the
method of determination of the
moisture content.		 • The resource tonnages are estimated on a dry basis.
Cut-off
parameters		 The basis of the adopted
cut-off grade(s) or quality
parameters applied.		 • Final report was based on a 2% THM cut off grade for blocks
as this is the current minimum grade where there is a
reasonable expectation for eventual extraction.
• 2% cut off grade was based on grade-tonnage curves with
respect to THM and VHM assemblage with the grade
distribution along the length of the orebody. Also taken into
account was current processing plant performance and
other similarlydeposits in the region.
Mining factors
or assumptions		 Assumptions made regarding
possible mining methods,
minimum mining dimensions
and internal (or, if applicable,
external) mining dilution. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider potential mining
methods, but the assumptions
made regarding mining methods
and parameters when
estimating Mineral Resources
may not always be rigorous.
Where this is the case, this
should be reported with an
explanation of the basis of the
mining assumptions made.		 • The resource is considered as dry mining feed and
mineralisation can be any depth or width. Dry mining
techniques are preferred in situations involving high grades.
• Mining would be through conventional open pit methods.
• The thickness and continuous nature of the mineralisation,
supports a bulk mining method.
• The Company believes there are no mining factors which
affect the assumption that the deposit has reasonable
prospects for eventual economic mining.
Metallurgical
factors or
assumptions		 The basis for assumptions or
predictions regarding
metallurgical amenability. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider potential metallurgical
methods, but the assumptions
regarding metallurgical
treatment processes and
parameters made when
reporting Mineral Resources
may not always be rigorous.
Where this is the case, this
should be reported with an
explanation of the basis of the
metallurgical assumptions made		 • Metallurgical recovery is similar to other mineral sand
operations.
• Metallurgical parameters have been taken from the
metallurgical tests, and metallurgical test work results
support the recovery.
• To date, the Company considers there are no metallurgical
factors which are likely to significantly affect the assumption
that the deposit has reasonable prospects of eventual
economic extraction.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 72

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
• There are no environmental factors likely to affect the
assumption that the deposit has reasonable prospects for
eventual economic extraction.
• The local vegetation environment generally consists of
strandveld plant communities. Topsoil stripped from the
mining operations will be stockpiled for later use during
rehabilitation.
• Slime is low (~8%) and tailings generated in the processing
plant will be pumped back into the open pits as part of the
rehabilitation strategy. Any excess water will be recovered
and recycled to the process.
• There are no pollutants introduced with the tailings and the
material is inert.
• The bulk density is based on a calculation of the specific
gravity of the silica and heavy mineral content fractions of
each sample. It is therefore not fixed and fluctuates between
1.56 and 2.1 as per the formula: SG=1.68+(0.0095 x THM).
• The use of a bulk density algorithm is a standard industry
practice for the estimation of mineral sands resource.
• The Mineral Resources have been classified as Indicated,
and Inferred Categories, in accordance with the 2012
Australasian Code for Reporting of Mineral Resources and
Ore Reserves (“JORC Code (2012)”).
• A range of criteria has been considered in determining this
classification including:
• Geological continuity
• Drillhole spacing:
• Areas with aircore drilling spaced at between
200m x 20m and 400m x 20m have been
Criteria JORC Code Explanation Commentary
Environmental
factors or
assumptions		 Assumptions made regarding
possible waste and process
residue disposal options. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider the potential
environmental impacts of the
mining and processing
operation. While at this stage the
determination of potential
environmental impacts,
particularly for a greenfield
project, may not always be well
advanced, the status of early
consideration of these potential
environmental impacts should
be reported. Where these
aspects have not been
considered, this should be
reported with an explanation of
the environmental assumptions
made.		 • There are no environmental factors likely to affect the
assumption that the deposit has reasonable prospects for
eventual economic extraction.
• The local vegetation environment generally consists of
strandveld plant communities. Topsoil stripped from the
mining operations will be stockpiled for later use during
rehabilitation.
• Slime is low (~8%) and tailings generated in the processing
plant will be pumped back into the open pits as part of the
rehabilitation strategy. Any excess water will be recovered
and recycled to the process.
• There are no pollutants introduced with the tailings and the
material is inert.
Bulk density Whether assumed or
determined. If assumed, the
basis for the assumptions. If
determined, the method used,
whether wet or dry, the
frequency of the measurements,
the nature, size and
representativeness of the
samples.
The bulk density for bulk
material must have been
measured by methods that
adequately account for void
spaces (vugs, porosity, etc),
moisture and differences
between rock and alteration
zones within the deposit.
Discuss assumptions for bulk
density estimates used in the
evaluation process of the
different materials.		 • The bulk density is based on a calculation of the specific
gravity of the silica and heavy mineral content fractions of
each sample. It is therefore not fixed and fluctuates between
1.56 and 2.1 as per the formula: SG=1.68+(0.0095 x THM).
• The use of a bulk density algorithm is a standard industry
practice for the estimation of mineral sands resource.
Classification The basis for the classification of
the Mineral Resources into
varying confidence categories.
Whether appropriate account
has been taken of all relevant
factors (ie relative confidence in
tonnage/grade estimations,
reliability of input data,
confidence in continuity of
geology and metal values,
quality, quantity and distribution		 • The Mineral Resources have been classified as Indicated,
and Inferred Categories, in accordance with the 2012
Australasian Code for Reporting of Mineral Resources and
Ore Reserves (“JORC Code (2012)”).
• A range of criteria has been considered in determining this
classification including:
• Geological continuity
• Drillhole spacing:
• Areas with aircore drilling spaced at between
200m x 20m and 400m x 20m have been

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 73

ASX: MRC ASX: MRC 28 April 2023

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
generally classified Indicated.
• Areas with aircore drilling spaced at greater
than 400m x 20m have been generally
classified as inferred.
• No Mineralisation has been classified as
Measured.
• Slope of regression of the kriging estimate – this is a
measure of the robustness of the estimate:
• Where there is a cluster of blocks with slope
between 0.7 and 0.85, even if other criteria have
been met for higher classification, the resource
has been classified as Indicated.
• Where there is a cluster of blocks where slope
is less than 0.7, even if other criteria have been
met for higher classification, the resource has
been classified as Inferred.
• The results of the validation of the block model show
acceptable correlation of the input data to the estimated
grades.
• The Competent Person is confident that all relevant factors
have been considered and the results reflect his views.
• The Mineral Resource has been reviewed internally as part
of normal validation processes by MRC.
• This is considered to be a maiden Mineral Resource
Estimate under theguidelines of the JORC Code(2012).
• Geostatistical studies regarding relative accuracy have not
been made.
• The size of the Eastern Strandline is modest in term of both
HM tonnes and HM grade, but it represents a mining project
due to an existing mineral sand operation in Tormin.
• The southern half of the deposit does remain open to the
south potentially opening extension opportunities for the
deposit.
• The estimate is appropriate for input into long term planning
studies.
• No production has occurred from the deposit.
Criteria JORC Code Explanation Commentary
of the data).
Whether the result appropriately
reflects the Competent Person’s
view of the deposit.		 generally classified Indicated.
• Areas with aircore drilling spaced at greater
than 400m x 20m have been generally
classified as inferred.
• No Mineralisation has been classified as
Measured.
• Slope of regression of the kriging estimate – this is a
measure of the robustness of the estimate:
• Where there is a cluster of blocks with slope
between 0.7 and 0.85, even if other criteria have
been met for higher classification, the resource
has been classified as Indicated.
• Where there is a cluster of blocks where slope
is less than 0.7, even if other criteria have been
met for higher classification, the resource has
been classified as Inferred.
• The results of the validation of the block model show
acceptable correlation of the input data to the estimated
grades.
• The Competent Person is confident that all relevant factors
have been considered and the results reflect his views.
Audits or
reviews		 The results of any audits or
reviews of Mineral Resource
estimates.		 • The Mineral Resource has been reviewed internally as part
of normal validation processes by MRC.
• This is considered to be a maiden Mineral Resource
Estimate under theguidelines of the JORC Code(2012).
Discussion of
relative
accuracy/
confidence		 Where appropriate, a statement
of the relative accuracy and
confidence level in the Mineral
Resource estimate using an
approach or procedure deemed
appropriate by the Competent
Person. For example, the
application of statistical or
geostatistical procedures to
quantify the relative accuracy of
the resource within stated
confidence limits, or, if such an
approach is not deemed
appropriate, a qualitative
discussion of the factors that
could affect the relative
accuracy and confidence of the
estimate.
The statement should specify
whether it relates to global or
local estimates, and, if local,
state the relevant tonnages,
which should be relevant to
technical and economic
evaluation. Documentation
should include assumptions
made and theprocedures used.		 • Geostatistical studies regarding relative accuracy have not
been made.
• The size of the Eastern Strandline is modest in term of both
HM tonnes and HM grade, but it represents a mining project
due to an existing mineral sand operation in Tormin.
• The southern half of the deposit does remain open to the
south potentially opening extension opportunities for the
deposit.
• The estimate is appropriate for input into long term planning
studies.
• No production has occurred from the deposit.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 74

ASX: MRC ASX: MRC

28 April 2023

==> picture [121 x 112] intentionally omitted <==

Appendix 2 – Skaland Mineral Resources and Ore Reserves

The Skaland Graphite Operation is located in northern Norway on the island of Senja, with Tromsø the nearest major town, with a population of around 65,000, 70km to the northeast.

Graphite was first discovered in the area in 1870 and production started in 1917. Skaland is understood to be the largest flake graphite producer in Europe and is presently the world's highest-grade operating flake graphite mine. Skaland Graphite AS formerly extracted graphite ore from the Skaland mine which is located directly alongside the existing processing and port infrastructure. Since 2007, ore to the plant has been sourced from the nearby Trælen Graphite Mine.

In October 2019, the Company completed the acquisition of Skaland Graphite AS and secured permitting tenure for a further 10 years. After completing the acquisition of Skaland, the Company has moved quickly to undertake a re-evaluation of the mineral resources in the Trælen Graphite Mine by re-logging, re-sampling and re-assaying of drilling core, to build a 3D block model of the deposit. No previous JORC resource estimation had been undertaken for the Skaland or Trælen deposits. A maiden JORC Code (2012) compliant resource of 1.78 million tonnes at 22% TGC, using a 10% cut-off, in the categories of Indicated and Inferred containing 397 kt of graphite was reported in March 20202 for the Trælen deposit.

Geology and Geological Interpretation

The Trælen deposit lies on the northern tip of the Skaland peninsula and consists of two main and related lithological units. The tectono-stratigraphically lower unit is a banded gneiss with alternating biotite rich and granitic bands (locally termed "Trælen Gneiss") and an upper unit that consists of amphibolitic gneiss. These are heterogeneous hornblende gneisses with graphite horizons, possibly metamorphic greywacke, and calciferous rocks. Both units contain granitic orthogneisses, possibly due to the partial melting of the surrounding rocks. The graphite found in the upper unit is assumed to be primarily syngenetic and later exposed to tectonic activity leading to its present textural, mineralogical, geochemical, and geometric characteristics. The mineralised horizon is isoclinally folded and the thickest, most continuous mineralisation occurs as lens shaped bodies oriented parallel to the main fold axis. This horizon contains the most economically interesting instances of graphite at Trælen and can vary between centimetres and up to 25m thick. There are minor exploration targets to the south and west of the current Trælen Deposit, representing either a further fold of the same horizon or a second mineralised horizon.

The rocks in the area have been exposed to at least three phases of folding and deformation with the last folding phase responsible at Trælen with a fold axis dipping 30 to 90 degrees towards the west–northwest. The existence of hypersthene, signs of partial melting, migmatisation and the occurrences of course grained flaky graphite all indicate high temperature metamorphism. The thicker, domainable zones of the graphite mineralisation are named the Boye North Shoot, Boye South Shoot (termed for their relative positions to each other), the VLF or Northeast Shoot and an unnamed second northeast shoot ("NE2"). The

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 75

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==

Northeast Shoot was named as such due to occupying a location to the northeast of the mine workings, where it was identified at the 85mRL and above.

Drilling Techniques and Hole Spacing

A total of 17 infill diamond holes were drilled in the previous program by an underground rig - Diamec Smart 6, with a core diameter of 47.6mm NQ2. The program was designed to provide sufficient geological and assay data to allow for an update to the JORC Mineral Resource. It targeted inferred resources in the deeper sections of the Boye North Shoot (100 shoot) and the Boye South Shoot (200 shoot). Previously, two types of drilling have been conducted at Trælen, diamond drillholes (both from surface and underground) and shorter rotary probe (sludge) boreholes, all drilled from underground, which was included a total of 133 holes have been drilled, 93 diamond holes and 40 probe holes. The total metres drilled is 16,540m, comprised of 15,531m diamond drilling (average 167m, minimum 36m, maximum 435m) and 1,009m of probe drilling.

Sampling and Sub-Sampling Techniques

All significant graphite bearing intersections in the diamond core have been sampled by splitting the core longitudinally, with the mineralised zone sampled every metre except for the boundaries, where a longer or shorter interval was taken. Sample Analysis Method All collected samples have been assayed at the ALS laboratory in Sweden (ALS Scandinavia) to complete the preparation and assaying. Samples submitted to the ALS have been analysed for Total Graphitic Carbon ("TGC"), Total Carbon ("TC"), Total Sulphur ("TS") by LECO furnace and infrared spectroscopy. In addition, duplicates, blanks and CRMs have been inserted randomly for at least every 20 samples for QA/QC purposes. In general, all QA/QC indicated good to moderately good performance.

Estimation Methodology and Resource Classification

The Mineral Resource estimation involved the use of drillhole and geological mapping data to construct three dimensional wireframes to define the mineralised domains. Samples were selected inside these wireframes, coded and composited. Boundaries were treated as hard with statistical and geostatistical analysis conducted on the composites identified in individual domains. Grades were estimated into a geological block model representing each mineralised domain. The TGC Grade estimation was carried out by Ordinary kriging using Dynamic Anisotropy based on a structural trend model for the main lode, where data density allowed for robust variography modelling, and inverse distance for the other, more minor lodes. Flake size estimation was completed using the inverse distance for all lodes.

Zones of the Trælen deposit in close proximity to mining have been drilled to 40x20m spacing, closer in places due to the nature of fan drilling, which is considered to be sufficient for classification of an Indicated Resource. Where recent mining development has taken place, with underground face mapping and sampling, the high geological confidence has allowed for some Measured resources to be defined.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 76

ASX: MRC ASX: MRC

28 April 2023

==> picture [121 x 112] intentionally omitted <==

Cut-Off Grades

A 10% TGC cut-off grade, based on the economic criteria established by the ongoing Skaland operations, was applied to any mineralised exploration intersections and final resource reporting.

Mining and Metallurgical Methods and Parameters

The mining in down-dip ore is essentially a mirror of the up-dip mining. Mining is being conducted by the long hole open stoping in a top-down sequence and targeting resources between levels +5m to -115m (below sea level). The level height is 20m with ore extraction from the bottom of each level.

Material Assumptions

The Trælen Graphite Mine has been in operation since 2007. Development of a decline to access down-dip resources commenced in June 2021 and completed in 2022. The current operations demonstrate that the mine planning underpinning the Ore Reserve is technically achievable and economically viable. Material assumptions applied for the Trælen maiden Ore Reserve include:

  • Capital and operation costs as derived from the Company's long-term estimates.

  • Graphite prices based on MRC's price forecasting protocols were used for the optimisation.

  • Ore dilution in the mining operation and metallurgical performance adapted to reflect the Skaland operation.

  • Geotechnical design and hydrogeological factors.

Criteria Used for Classification

Mineral Resources have been released in accordance with the JORC Code (2012) and independently peer reviewed by Wardell Armstrong International Ltd. Measured and Indicated Mineral Resources were used to form the basis of the Ore Reserves according to the JORC Code (2012). Micromine software was used for the mine planning. All the Mineral Resources intersected by the mine design, and classified as Measured, were classed as Proved Ore Reserve, and Indicated portion of the Mineral Resources as Proved Ore Reserve after consideration of the mining, metallurgical, and financial aspects of the project. There are no Inferred Resources included in the Ore Reserve statement.

Mining Method and Mining Assumptions

Mining is conducted by long hole open stoping in a top-down sequence and targeting resources between levels +5m to -115m (below sea level). The level height is 20m with ore extraction from the bottom of each level.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 77

ASX: MRC ASX: MRC

28 April 2023

==> picture [93 x 25] intentionally omitted <==

A 15m crown pillar has been left in place between the existing (up-dip) mining void and the down-dip development. The existing up-dip mining voids will be filled with mine waste from the down-dip development, eliminating waste deposition outside Trælen. The mining concept is essentially a mirror of the up-dip mining, changing from the bottom-up to top-down progress. The decline will be the main access to the production levels.

Combined geotechnical, bathymetry and hydrological assessment also indicates a low risk of seawater ingress into the below sea level development.

JORC TABLE 1 Skaland Graphite

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections)

Criteria JORC Code Explanation Commentary
Sampling
techniques		 Nature and quality of sampling (eg
cut channels, random chips, or
specific specialised industry standard
measurement tools appropriate to
the minerals under investigation,
such as down hole gamma sondes,
or handheld XRF instruments, etc).
These examples should not be taken
as limiting the broad meaning of
sampling.
Include reference to measures taken
to ensure sample representivity and
the appropriate calibration of any
measurement tools or systems used.
Aspects of the determination of
mineralisation that are Material to the
Public Report. In cases where
‘industry standard’ work has been
done this would be relatively simple
(eg ‘reverse circulation drilling was
used to obtain 1m samples from
which 3kg was pulverised to produce
a 30g charge for fire assay’). In other
cases, more explanation may be
required, such as where there is
coarse gold that has inherent
sampling problems. Unusual
commodities or mineralisation types
(eg submarine nodules) may warrant
disclosure of detailed information.		 • The current resource update is based on 17 aircore
holes, representing 2,929m, and 415 analysed
samples. This data, added to database of maiden
Mineral Resource Estimate reported on 12 March
2020, consists of 133 holes, 93 diamond holes and
40 probe holes, representing 15,531m of drilling and
1,245 analysed drill samples.
• Diamond drilling mineralised zones were sampled
every metre except for boundaries, where a longer
or shorter interval was taken. Unmineralised core
was not sampled unless zone of unmineralised host
rock around the mineralisation that sampled in a few
holes.
• The sampling method is by core saw half core
sampling of diamond drill core.
• Pre-numbered calico bags used for samples ~4kg
each.
• Samples were submitted directly to ALS laboratory
to be analysed for TGC, TC and TS.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 78

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Epiroc underground rig - Diamec Smart 6 has been
used. All diamond drilling is NQ sized.
• The core diameter is approximately 47mm.
• Diamond drillholes drilled from underground have
been downhole surveyed by electronic multi-shot
survey tools at intervals of 3.0m.
• Azimuths were measured for each hole.
• No sample loss or cavitation was experienced.
• Sample recovery was very good.
• A sampling bias has not been determined.
• Each hole was logged by a geologist on pre-printed
log sheets.
• Geological and lithological observations per depth
were recorded together with field sections and hand
drawn down-the-hole logs.
• Special attention was given to graphite intersected.
• All diamond drillholes have been photographed in
both dry and wet states.
• All Diamond core has been split longitudinally with a
core saw and half core sampled.
• Duplicates have been sampled sporadically using
the remaining half of the core.
• Samples was sent to the ALS laboratory in Sweden
(ALS Scandinavia) to complete the preparation and
assaying.
• ALS Scandinavia ("ALS") prepares the sample by
crushing, weighing, drying, fine crushing the entire
sample to >70% passing 2mm, rotary splitting to
250g using a Boyd Rotary Splitter and finally
pulverising the split to >85% passing 75μm.
• The sample sizes are considered appropriate for the
type of mineralisation under consideration.
Criteria JORC Code Explanation Commentary
Drilling
techniques		 Drill type (eg core, reverse
circulation, open-hole hammer,
rotary air blast, auger, Banka, sonic,
etc) and details (eg core diameter,
triple or standard tube, depth of
diamond tails, face- sampling bit or
other type, whether core is oriented
and if so, by what method, etc).		 • Epiroc underground rig - Diamec Smart 6 has been
used. All diamond drilling is NQ sized.
• The core diameter is approximately 47mm.
• Diamond drillholes drilled from underground have
been downhole surveyed by electronic multi-shot
survey tools at intervals of 3.0m.
• Azimuths were measured for each hole.
Drill sample
recovery		 Method of recording and assessing
core and chip sample recoveries and
results assessed.
Measures taken to maximise sample
recovery and ensure representative
nature of the samples.
Whether a relationship exists
between sample recovery and grade
and whether sample bias may have
occurred due to preferential loss/gain
of fine/coarse material.		 • No sample loss or cavitation was experienced.
• Sample recovery was very good.
• A sampling bias has not been determined.
Logging Whether core and chip samples have
been geologically and geotechnically
logged to a level of detail to support
appropriate Mineral Resource
estimation, mining studies and
metallurgical studies.
Whether logging is qualitative or
quantitative in nature. Core (or
costean, channel, etc) photography.
The total length and percentage of
the relevant intersections logged.		 • Each hole was logged by a geologist on pre-printed
log sheets.
• Geological and lithological observations per depth
were recorded together with field sections and hand
drawn down-the-hole logs.
• Special attention was given to graphite intersected.
• All diamond drillholes have been photographed in
both dry and wet states.
Sub-
sampling
techniques
and sample
preparation		 If core, whether cut or sawn and
whether quarter, half or all core taken.
If non-core, whether riffled, tube
sampled, rotary split, etc and
whether sampled wet or dry.
For all sample types, the nature,
quality, and appropriateness of the
sample preparation technique.
Quality control procedures adopted
for all sub-sampling stages to
maximise representivity of samples.
Measures taken to ensure that the
sampling is representative of the in
situ material collected, including for
instance results for field
duplicate/second-half sampling.
Whether sample sizes are
appropriate to the grain size of the
material being sampled.		 • All Diamond core has been split longitudinally with a
core saw and half core sampled.
• Duplicates have been sampled sporadically using
the remaining half of the core.
• Samples was sent to the ALS laboratory in Sweden
(ALS Scandinavia) to complete the preparation and
assaying.
• ALS Scandinavia ("ALS") prepares the sample by
crushing, weighing, drying, fine crushing the entire
sample to >70% passing 2mm, rotary splitting to
250g using a Boyd Rotary Splitter and finally
pulverising the split to >85% passing 75μm.
• The sample sizes are considered appropriate for the
type of mineralisation under consideration.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 79

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• All samples were resubmitted to ALS to analyse
both TC and TGC as well as TS by LECO furnace
and infrared spectroscopy.
• In addition to the standard assays, duplicates,
blanks and standard reference material ("CRM") has
been inserted every 20 samples.
• 5 samples have been assayed for 48 rock forming
elements using HF-HNO3-HClO4 acid digestion,
HCl leach and a combination of ICP-MS and ICP-
AES. This was done on a selection of graphite
bearing and non-graphite bearing samples to help
identify general rock chemistry and impurities.
• The CRM, blank and duplicate sample results are
within accepted limits.
• No geophysical tools or handheld instruments were
utilised in the sample analysis.
• TGC values are reasonably consistent, but the
integer representing logged flake size can vary on a
short scale.
• No specific twinned holes have been drilled.
However, closely spaced drillholes were reviewed
for short scale variability.
• The drillhole logs have been converted to
electronically stored formats and stored in a
database provided by Maxgeo (DataShed). This
database is hosted on an offsite server supplied by
Maxgeo and managed by their trained database
staff.
• Diamond drillholes have been surveyed using
routine underground surveying methods (including
Leica Total Station).
• The project lies in UTM zone 33.
• Downhole surveys were done for the underground
diamond drillholes, and these have typically been
surveyed every 3m.
• Underground surveys are accurate for collar
positions.
• Drillholes were located in two underground drilling
platforms with drilling done in fan type arrangement.
• Spacing becomes variable due to the fanned nature
of the holes.
• 20x20m is appropriate for the size and shape of the
mineralisation.
• Through the main graphite zones, nominal 1m
sampling has been applied where appropriate and
Criteria JORC Code Explanation Commentary
Quality of
assay data
and
laboratory
tests		 The nature, quality and
appropriateness of the assaying and
laboratory procedures used and
whether the technique is considered
partial or total.
For geophysical tools,
spectrometers, handheld XRF
instruments, etc, the parameters
used in determining the analysis
including instrument make and
model, reading times, calibrations
factors applied and their derivation,
etc.
Nature of quality control procedures
adopted (eg standards, blanks,
duplicates, external laboratory
checks) and whether acceptable
levels of accuracy (ie lack of bias) and
precision have been established.		 • All samples were resubmitted to ALS to analyse
both TC and TGC as well as TS by LECO furnace
and infrared spectroscopy.
• In addition to the standard assays, duplicates,
blanks and standard reference material ("CRM") has
been inserted every 20 samples.
• 5 samples have been assayed for 48 rock forming
elements using HF-HNO3-HClO4 acid digestion,
HCl leach and a combination of ICP-MS and ICP-
AES. This was done on a selection of graphite
bearing and non-graphite bearing samples to help
identify general rock chemistry and impurities.
• The CRM, blank and duplicate sample results are
within accepted limits.
• No geophysical tools or handheld instruments were
utilised in the sample analysis.
Verification
of sampling
and
assaying		 The
verification
of significant
intersections by either independent or
alternative company personnel.
The use of twinned holes.
Documentation of primary data,
data entry procedures, data
verification, data storage (physical
and electronic) protocols.
Discuss any adjustment to assay
data.		 • TGC values are reasonably consistent, but the
integer representing logged flake size can vary on a
short scale.
• No specific twinned holes have been drilled.
However, closely spaced drillholes were reviewed
for short scale variability.
• The drillhole logs have been converted to
electronically stored formats and stored in a
database provided by Maxgeo (DataShed). This
database is hosted on an offsite server supplied by
Maxgeo and managed by their trained database
staff.
Location of
data points		 Accuracy and quality of surveys used
to locate drillholes (collar and down-
hole surveys), trenches, mine
workings and other locations used in
Mineral Resource estimation.
Specification of the grid system used.
Quality and adequacy of topographic
control.		 • Diamond drillholes have been surveyed using
routine underground surveying methods (including
Leica Total Station).
• The project lies in UTM zone 33.
• Downhole surveys were done for the underground
diamond drillholes, and these have typically been
surveyed every 3m.
• Underground surveys are accurate for collar
positions.
Data
spacing and
distribution		 Data spacing for reporting of
exploration results.
Whether the data spacing and
distribution are sufficient to establish
the degree of geological and grade
continuity appropriate for the Mineral
Resource and Ore Reserve
estimation procedure(s) and
classifications applied.
Whether sample compositing has		 • Drillholes were located in two underground drilling
platforms with drilling done in fan type arrangement.
• Spacing becomes variable due to the fanned nature
of the holes.
• 20x20m is appropriate for the size and shape of the
mineralisation.
• Through the main graphite zones, nominal 1m
sampling has been applied where appropriate and

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 80

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023 28 April 2023
Commentary
sampled to geological boundaries elsewhere.
• The drillhole orientation is considered appropriate
with the drillholes being drilled as close to
perpendicular to the interpreted strike of the
geological units and graphite mineralisation as
possible.
• Drill spacing and orientation are close to
perpendicular in the center of the mineralised
domains and becomes more oblique as the drillholes
target down-dip.
• All sample bag numbers were logged against the
drillhole by the site geologist. Bagged samples were
labelled, zip-tied and transported to the laboratory.
• External laboratories have significant chain of
command documents due to shipping the samples
internationally.
• No external audits of sampling or the laboratory
have occurred recently.
• The lab results and logging have been reviewed
externally by a consultant to Skaland Graphite AS
and internally as part of normal validation processes
byMRC.
Criteria JORC Code Explanation Commentary
been applied. sampled to geological boundaries elsewhere.
Orientation
of data in
relation to
geological
structure		 Whether the orientation of sampling
achieves
unbiased
sampling
of
possible structures and the extent to
which this is known, considering the
deposit type.
If the relationship between the drilling
orientation and the orientation of key
mineralised structures is considered
to have introduced a sampling bias,
this should be assessed and
reported if material.		 • The drillhole orientation is considered appropriate
with the drillholes being drilled as close to
perpendicular to the interpreted strike of the
geological units and graphite mineralisation as
possible.
• Drill spacing and orientation are close to
perpendicular in the center of the mineralised
domains and becomes more oblique as the drillholes
target down-dip.
Sample
security		 The measures taken to ensure sample
security.		 • All sample bag numbers were logged against the
drillhole by the site geologist. Bagged samples were
labelled, zip-tied and transported to the laboratory.
• External laboratories have significant chain of
command documents due to shipping the samples
internationally.
Audits or
reviews		 The results of any audits or reviews of
sampling techniques and data.		 • No external audits of sampling or the laboratory
have occurred recently.
• The lab results and logging have been reviewed
externally by a consultant to Skaland Graphite AS
and internally as part of normal validation processes
byMRC.
Criteria JORC Code Explanation Commentary
Mineral
tenement and
land tenure
status		 Type, reference name/number,
location and ownership including
agreements or material issues
with third parties such as joint
ventures, partnerships, overriding
royalties, native title interests,
historical sites, wilderness or
national park and environmental
settings.
The security of the tenure held at
the time of reporting along with
any known impediments to
obtaining a licence to operate in
the area.		 • According to the Norwegian Minerals Act, graphite is
owned by the landowner.
• The Trælen Mine lies on cadastral numbers
(property numbers) 5421-306/1, 5421-306/2, and
5421-307/1. An agreement with the local landowner
is in place and covers access (5421-306/1and 5421-
306/2) and mining (5421-307/1).
• All licenses, permits and rights are granted in the
name of Skaland Graphite AS, a subsidiary of ASX
listed Mineral Commodities Ltd (ASX: MRC).
• Skaland Graphite AS also owns three properties
(5421-310/13, 5421-310/108 and 5421-310/164)
which cover the current process plant, an old
residence, an access road and the old Skaland Mine
site. Skaland Graphite AS also owns 5421-310/1/28
and 5421-310/13/5 which comprise the wharf and
hardstand area and have been leased back to the

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 81

ASX: MRC ASX: MRC 28 April 2023

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
Berg Municipality.
• Skaland Graphite AS has also leased 5421-
310/1/19, 5421-310/1/24 and 5421-310/1/27on
which the current main office building and car park
are located.
• The Skaland Graphite AS operating license for the
Trælen Mine was renewed on 28 May 2019 for a
duration of 10 years.
• The Company was granted permission to increase
Production to 16,000t of graphite concentrate per
year, and the discharge of 40,000t of tailings to sea
per year. The license issued on 28 June 2019
replaced the previous production license of 24
January 2002 and discharge permit of 25 July 2019.
• To the knowledge of Competent Person, all licenses
and permits are in good standing with no known
impediments.
• Exploration dates back to 1870 when graphite was
first discovered in the area.
• The Geological Survey of Norway has conducted
extensive regional-scale exploration including
geochemistry and geophysical surveys.
• Six drillholes were completed in 1985, followed by a
Pre-Feasibility Study of the Trælen deposit
conducted in 1998.
• In 2001 an additional drilling program was
undertaken that comprised 15 drillholes for a total
length of 2,103m. All holes intersected high grade
graphite in the Boye-vein and 5 holes also
intersected high grade graphite in the VLF-vein,
which indicated a significant addition to the 1998
estimation.
• In 2002, based on a total of 35 drillholes, two ruler
shaped mineralised bodies, or veins, were drill
indicated and a Mineral Resource evaluation
completed to estimate the contained tonnes and
carbon in graphite grade.
• By 2017, a total of 101 drillholes had been
completed and comprised 40 probe holes for a total
of 1,009m and 61 diamond holes for a total of
7,506m.
• The Trælen deposit lies on the northern tip of the
Skaland peninsula and consists of two main and
related lithological units. The tectono-
stratigraphically lower unit is a banded gneiss with
alternating biotite rich and granitic bands (locally
termed "Trælen Gneiss") and an upper unit that
consists of amphibolitic gneiss. These are
heterogeneous hornblende gneisses with graphite
horizons, possibly metamorphic greywacke, and
calciferous rocks. Both units containgranitic
Criteria JORC Code Explanation Commentary
Berg Municipality.
• Skaland Graphite AS has also leased 5421-
310/1/19, 5421-310/1/24 and 5421-310/1/27on
which the current main office building and car park
are located.
• The Skaland Graphite AS operating license for the
Trælen Mine was renewed on 28 May 2019 for a
duration of 10 years.
• The Company was granted permission to increase
Production to 16,000t of graphite concentrate per
year, and the discharge of 40,000t of tailings to sea
per year. The license issued on 28 June 2019
replaced the previous production license of 24
January 2002 and discharge permit of 25 July 2019.
• To the knowledge of Competent Person, all licenses
and permits are in good standing with no known
impediments.
Exploration
done by other
parties		 Acknowledgment and appraisal of
exploration by other parties.		 • Exploration dates back to 1870 when graphite was
first discovered in the area.
• The Geological Survey of Norway has conducted
extensive regional-scale exploration including
geochemistry and geophysical surveys.
• Six drillholes were completed in 1985, followed by a
Pre-Feasibility Study of the Trælen deposit
conducted in 1998.
• In 2001 an additional drilling program was
undertaken that comprised 15 drillholes for a total
length of 2,103m. All holes intersected high grade
graphite in the Boye-vein and 5 holes also
intersected high grade graphite in the VLF-vein,
which indicated a significant addition to the 1998
estimation.
• In 2002, based on a total of 35 drillholes, two ruler
shaped mineralised bodies, or veins, were drill
indicated and a Mineral Resource evaluation
completed to estimate the contained tonnes and
carbon in graphite grade.
• By 2017, a total of 101 drillholes had been
completed and comprised 40 probe holes for a total
of 1,009m and 61 diamond holes for a total of
7,506m.
Geology Deposit type, geological setting
and style of mineralisation.		 • The Trælen deposit lies on the northern tip of the
Skaland peninsula and consists of two main and
related lithological units. The tectono-
stratigraphically lower unit is a banded gneiss with
alternating biotite rich and granitic bands (locally
termed "Trælen Gneiss") and an upper unit that
consists of amphibolitic gneiss. These are
heterogeneous hornblende gneisses with graphite
horizons, possibly metamorphic greywacke, and
calciferous rocks. Both units containgranitic

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 82

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
orthogneisses, possibly a result of partial melting of
the surrounding rocks. Quartz diorites and different
types of pegmatites occur as well, forming
discontinuous intrusions.
• The graphite found in the upper unit is assumed to
be primarily syngenetic and later exposed to tectonic
activity leading to its present textural, mineralogical,
geochemical, and geometric characteristics.
• The mineralised horizon is isoclinally folded and the
thickest, most continuous mineralisation occurs as
lens shaped bodies oriented parallel to the main fold
axis. This horizon contains the most economically
interesting instances of graphite at Trælen and can
vary between centimeters and up to 25m thick.
There is minor graphite found in faults and along
shears. There are minor exploration targets to the
south and west of the current Trælen Deposit, which
may represent either a further fold of the same
horizon, or a second mineralised horizon.
• The rocks in the area have been exposed to at least
three phases of folding and deformations. D1
developed the main foliation, D2 is responsible for
the majority of the large scale folding structures in
the region and D3 which is the last folding phase
responsible at Trælen for the folds with a fold axis
dipping30 to 90 degrees towards west-northwest.
• 133 diamond drill holes have been drilled for this
updated mineral resource.
• Diamond drillholes = 15,531m (average 172m, min
98m, max 231m).
• East collar ranges – 12,659mE to 12,706mE.
• North collar ranges – 1,281,490mN to 1,281,503mN.
• Collar elevation ranges – 23mRL to 25mRL.
• Azimuth ranges – the strike of the mineralised zones
ranges from 290° to 85°. Drill sections are orientated
perpendicular to the general strike of the mineralised
zones.
• Dip ranges – the dip of the mineralised zones ranges
from 55° to 75°. Drillholes are generally inclined to
intersect perpendicular to the mineralisation.
• No individual Exploration Results are reported.
Criteria JORC Code Explanation Commentary
orthogneisses, possibly a result of partial melting of
the surrounding rocks. Quartz diorites and different
types of pegmatites occur as well, forming
discontinuous intrusions.
• The graphite found in the upper unit is assumed to
be primarily syngenetic and later exposed to tectonic
activity leading to its present textural, mineralogical,
geochemical, and geometric characteristics.
• The mineralised horizon is isoclinally folded and the
thickest, most continuous mineralisation occurs as
lens shaped bodies oriented parallel to the main fold
axis. This horizon contains the most economically
interesting instances of graphite at Trælen and can
vary between centimeters and up to 25m thick.
There is minor graphite found in faults and along
shears. There are minor exploration targets to the
south and west of the current Trælen Deposit, which
may represent either a further fold of the same
horizon, or a second mineralised horizon.
• The rocks in the area have been exposed to at least
three phases of folding and deformations. D1
developed the main foliation, D2 is responsible for
the majority of the large scale folding structures in
the region and D3 which is the last folding phase
responsible at Trælen for the folds with a fold axis
dipping30 to 90 degrees towards west-northwest.
Drill hole
Information		 A summary of all information
material to the understanding of
the exploration results including a
tabulation of the following
information for all Material drill
holes:
Easting and northing of the drill
hole collar
elevation or RL (Reduced Level –
elevation above sea level in
metres) of the drill hole collar
dip and azimuth of the hole
down hole length and interception
depth
hole length.
If the exclusion of this information
is justified on the basis that the
information is not Material and
this exclusion does not detract
from the understanding of the
report, the Competent Person
should clearly explain why this is
the case.		 • 133 diamond drill holes have been drilled for this
updated mineral resource.
• Diamond drillholes = 15,531m (average 172m, min
98m, max 231m).
• East collar ranges – 12,659mE to 12,706mE.
• North collar ranges – 1,281,490mN to 1,281,503mN.
• Collar elevation ranges – 23mRL to 25mRL.
• Azimuth ranges – the strike of the mineralised zones
ranges from 290° to 85°. Drill sections are orientated
perpendicular to the general strike of the mineralised
zones.
• Dip ranges – the dip of the mineralised zones ranges
from 55° to 75°. Drillholes are generally inclined to
intersect perpendicular to the mineralisation.
Data
aggregation		 In reporting Exploration Results,
weighting averaging techniques,		 • No individual Exploration Results are reported.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 83

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• No (high-grade) top cutting was used during the
Mineral Resource estimation process. A statistical
review of the assay data is outlined in the main body
of the resource report.
• No metal equivalent equations were used during the
Mineral Resource estimation procedure or reporting.
• Samples were composited to 1.0m lengths during
the Mineral Resource estimation procedure to
ensure a consistent level of support during the
estimation process.
• The strike of the mineralised zones ranges from
290° to 85°. Drill sections are orientated
perpendicular to the general strike of the mineralised
zones where possible.
• The dip of the mineralised zones ranges from 55° to
75°. Drillholes are generally inclined to intersect the
mineralisation at appropriate angles to limit sampling
bias.
• Any reported mineralisation intercepts are downhole
widths and not true widths, which are unknown at
this time.
• Significant intersections are not being reported.
• Maps, sections and plan view are provided in the
resource report.
• Statistics of drillhole grades used during the Mineral
Resource estimate are contained in the resource
report.
• This report provides the total information available to
date and is considered to represent a balanced
report.
• A substantial amount of work has been completed at
the Project by historic explorers dating back to 1870.
Work has included geophysical surveys, soil
sampling, diamond and probe drilling.
• A Pre-Feasibility Study for the Trælen deposit was
prepared in 1998 following the drilling of 6 drillholes
in 1985.
Criteria JORC Code Explanation Commentary
methods maximum and/or minimum grade
truncations (eg cutting of high
grades) and cut-off grades are
usually Material and should be
stated.
Where aggregate intercepts
incorporate short lengths of high
grade results and longer lengths
of low grade results, the
procedure used for such
aggregation should be stated and
some typical examples of such
aggregations should be shown in
detail.
The assumptions used for any
reporting of metal equivalent
values should be clearly stated.		 • No (high-grade) top cutting was used during the
Mineral Resource estimation process. A statistical
review of the assay data is outlined in the main body
of the resource report.
• No metal equivalent equations were used during the
Mineral Resource estimation procedure or reporting.
• Samples were composited to 1.0m lengths during
the Mineral Resource estimation procedure to
ensure a consistent level of support during the
estimation process.
Relationship
between
mineralisation
widths and
intercept
lengths		 These relationships are
particularly important in the
reporting of Exploration Results.
If the geometry of the
mineralisation with respect to the
drill hole angle is known, its
nature should be reported.
If it is not known and only the
down hole lengths are reported,
there should be a clear statement
to this effect (eg ‘down hole
_length, true width not known’). _		 • The strike of the mineralised zones ranges from
290° to 85°. Drill sections are orientated
perpendicular to the general strike of the mineralised
zones where possible.
• The dip of the mineralised zones ranges from 55° to
75°. Drillholes are generally inclined to intersect the
mineralisation at appropriate angles to limit sampling
bias.
• Any reported mineralisation intercepts are downhole
widths and not true widths, which are unknown at
this time.
Diagrams Appropriate maps and sections
(with scales) and tabulations of
intercepts should be included for
any significant discovery being
reported These should include,
but not be limited to a plan view of
drill hole collar locations and
appropriate sectional views.		 • Significant intersections are not being reported.
• Maps, sections and plan view are provided in the
resource report.
Balanced
reporting		 Where comprehensive reporting of
all Exploration Results is not
practicable, representative
reporting of both low and high
grades and/or widths should be
practiced to avoid misleading
reporting of Exploration Results.		 • Statistics of drillhole grades used during the Mineral
Resource estimate are contained in the resource
report.
• This report provides the total information available to
date and is considered to represent a balanced
report.
Other
substantive
exploration
data		 Other exploration data, if
meaningful and material, should
be reported including (but not
limited to): geological
observations; geophysical survey
results; geochemical survey
results; bulk samples – size and
method of treatment; metallurgical		 • A substantial amount of work has been completed at
the Project by historic explorers dating back to 1870.
Work has included geophysical surveys, soil
sampling, diamond and probe drilling.
• A Pre-Feasibility Study for the Trælen deposit was
prepared in 1998 following the drilling of 6 drillholes
in 1985.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 84

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC
MRC
ASX: MRC		 28 April 2023 28 April 2023 28 April 2023
Commentary
• Significant geophysical studies have been done by
NGU.
• Further drilling is planned for 2023 to unlock further
resources and reserves.
Criteria JORC Code Explanation Commentary
test results; bulk density,
groundwater, geotechnical and
rock characteristics; potential
deleterious or contaminating
substances.		 • Significant geophysical studies have been done by
NGU.
Further work The nature and scale of planned
further work (eg tests for lateral
extensions or depth extensions or
large-scale step-out drilling).
Diagrams clearly highlighting the
areas of possible extensions,
including the main geological
interpretations and future drilling
areas, provided this information is
not commercially sensitive.		 • Further drilling is planned for 2023 to unlock further
resources and reserves.
Criteria JORC Code Explanation Commentary
Database
integrity		 Measures taken to ensure that
data has not been corrupted by,
for example, transcription or
keying errors, between its initial
collection and its use for Mineral
Resource estimation purposes.
Data validation procedures used.		 • Data is stored in an offsite database hosted by Maxwell
Geoservices.
• Visual validation of results against logs and in a spatial
context has been undertaken.
• Any discrepancies or errors were either corrected or the
results rejected.
• Downhole survey was checked for significant deviation. No
issues were identified.
• Assays were checked for anomalies between geology and
TC, and TGC grade. No anomalies were identified. Drill
cores with no sample assays were inserted with zero
grade.
Site visits Comment on any site visits
undertaken by the Competent
Person and the outcome of
those visits.
If no site visits have been
undertaken indicate why this is
the case.		 • The Competent Person is currently a full-time employee of
Quantified Strategies Pty Ltd.
• No site visits were undertaken for this resource estimate.
The Competent Person did visit the project previously,
undertaking due diligence for the Skaland acquisition and
is familiar with the site and resource conditions.
Geological
interpretation		 Confidence in (or conversely,
the uncertainty of) the
geological interpretation of the
mineral deposit.
Nature of the data used and of
any assumptions made.
The effect, if any, of alternative
interpretations on Mineral
Resource estimation.
The use of geology in guiding
and controlling Mineral		 • Confidence in the interpretation of the Trælen stratigraphy
is considered to be high given domain interpretation was
completed with a consideration for geological logging,
geochemical data and surrounding holes.
• Graphite is distinct geochemically and visually compared to
the host rocks and is defined using lithological logging.
• Domaining fits well with previous geological investigations
of the overall architecture of the mineralisation.
• Major faulting may cause a break in domains to the east of

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 85

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
the main mineralised zones, but lack of data around this
fault has made it difficult to confidently interpret its effect.
• Domaining has been done manually, and as such, no
major interpretation artefacts exist.
• Wireframe solids and surfaces of the Domains act as hard
boundaries duringestimation for the mineralisation.
• The mineralised shoots consist of four 2-20m wide
moderately plunging shoots, folded around a moderately
plunging double anticline system.
• 100 Shoot:
• Length: 725m
• Width: 80-160m
• Depth to surface: +330m to -250m below sea level,
from 0m to 75m inside mountain
• 200 Shoot:
• Length: 190m
• Width: 55m
• Depth to surface: +140m to -130m below sea level,
from 10m to 50m inside mountain
• 300 Shoot:
• Length: 310m
• Width: 30m
• Depth to surface: +140m to -60m below sea level, from
100m to 130m inside mountain
• 400 Shoot:
• Length: 268m
• Width: 50m
• Depth to surface: +140m to -150m below sea level, from
20m to 100m inside mountain
• Ordinary kriging using a structural trend model was used for
estimation of the folded 100 Shoot, while inverse distance
was used for estimation of the other, minor shoots where
variography was not able to be robustly modelled.
• 1m composites were used for the estimation.
• No top-cuts were applied as outlier analysis indicated any
high assay values were part of a normal distribution, and as
such were not outliers.
• Parent block size was 8mx4mx2m, with sub-blocking down
to a quarter of this to reflect domain boundaries closely.
Estimate was applied to all blocks. Block size was based
around the dimensions of the ore body, and drillhole spacing
that was between 5m and 50m.
• Domain boundaries were treated as hard during estimation.
• Anisotropic search distances were used for the minor lodes,
Criteria JORC Code Explanation Commentary
Resource estimation.
The factors affecting continuity
both of grade and geology.		 the main mineralised zones, but lack of data around this
fault has made it difficult to confidently interpret its effect.
• Domaining has been done manually, and as such, no
major interpretation artefacts exist.
• Wireframe solids and surfaces of the Domains act as hard
boundaries duringestimation for the mineralisation.
Dimensions The extent and variability of the
Mineral Resource expressed as
length (along strike or
otherwise), plan width, and
depth below surface to the
upper and lower limits of the
Mineral Resource.		 • The mineralised shoots consist of four 2-20m wide
moderately plunging shoots, folded around a moderately
plunging double anticline system.
• 100 Shoot:
• Length: 725m
• Width: 80-160m
• Depth to surface: +330m to -250m below sea level,
from 0m to 75m inside mountain
• 200 Shoot:
• Length: 190m
• Width: 55m
• Depth to surface: +140m to -130m below sea level,
from 10m to 50m inside mountain
• 300 Shoot:
• Length: 310m
• Width: 30m
• Depth to surface: +140m to -60m below sea level, from
100m to 130m inside mountain
• 400 Shoot:
• Length: 268m
• Width: 50m
• Depth to surface: +140m to -150m below sea level, from
20m to 100m inside mountain
Estimation and
modelling
techniques		 The nature and appropriateness
of the estimation technique(s)
applied and key assumptions,
including treatment of extreme
grade values, domaining,
interpolation parameters and
maximum distance of
extrapolation from data points. If
a computer assisted estimation
method was chosen, include a
description of computer
software and parameters used.
The availability of check
estimates, previous estimates
and/or mine production records
and whether the Mineral
Resource estimate takes
appropriate account of such		 • Ordinary kriging using a structural trend model was used for
estimation of the folded 100 Shoot, while inverse distance
was used for estimation of the other, minor shoots where
variography was not able to be robustly modelled.
• 1m composites were used for the estimation.
• No top-cuts were applied as outlier analysis indicated any
high assay values were part of a normal distribution, and as
such were not outliers.
• Parent block size was 8mx4mx2m, with sub-blocking down
to a quarter of this to reflect domain boundaries closely.
Estimate was applied to all blocks. Block size was based
around the dimensions of the ore body, and drillhole spacing
that was between 5m and 50m.
• Domain boundaries were treated as hard during estimation.
• Anisotropic search distances were used for the minor lodes,

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 86

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
with directions of major and semi major axes based on
domain wireframe orientations.
• Micromine software was used.
• The nearest neighbour estimate was run as a check and
validated well against the OK/ID2 model. The previous
estimate was also used as a check.
• No byproducts are present.
• No deleterious elements have been estimated.
• The estimate was visually checked against raw assays.
• Discretisation of 3x3x3.
• Maximum search distance of 150m.
• Maximum composite points per block – 10.
• Minimum points per block – 3.
• Octant searching was used.
• Validation of the final resource has been carried out in a
number of ways, including:
• Visual validation - comparing block model estimated
grade against drillhole by section.
• Statistical validation - comparing statistically by
domain, wireframe and block model grades versus
sample and composite grades.
• Swath plots - graphical display of the grade distribution
to compare the grade within these bands of the
composite samples and the block estimated grades.
• Reconciliation - compare the estimated Mineral
Resource inside the north and south stope outlines
against production records.
• All modes of validation have produced acceptable results.
• Flake size estimation was completed using inverse distance
for all lodes. Flake size estimation code, 1= Fine, 2=Medium,
3=Coarse has been used and more than 90% of blocks have
a flake size code with overall mean of 2.6 indicating a
reasonable level of consistency.
• The Mineral Resource has not been updated this year. The
Criteria JORC Code Explanation Commentary
data.
The assumptions made
regarding recovery of by-
products.
Estimation of deleterious
elements or other non-grade
variables of economic
significance (eg sulphur for acid
mine drainage characterisation).
In the case of block model
interpolation, the block size in
relation to the average sample
spacing and the search
employed.
Any assumptions behind
modelling of selective mining
units.
Any assumptions about
correlation between variables.
Description of how the
geological interpretation was
used to control the resource
estimates.
Discussion of basis for using or
not using grade cutting or
capping.
The process of validation, the
checking process used, the
comparison of model data to
drill hole data, and use of
reconciliation data if available.		 with directions of major and semi major axes based on
domain wireframe orientations.
• Micromine software was used.
• The nearest neighbour estimate was run as a check and
validated well against the OK/ID2 model. The previous
estimate was also used as a check.
• No byproducts are present.
• No deleterious elements have been estimated.
• The estimate was visually checked against raw assays.
• Discretisation of 3x3x3.
• Maximum search distance of 150m.
• Maximum composite points per block – 10.
• Minimum points per block – 3.
• Octant searching was used.
• Validation of the final resource has been carried out in a
number of ways, including:
• Visual validation - comparing block model estimated
grade against drillhole by section.
• Statistical validation - comparing statistically by
domain, wireframe and block model grades versus
sample and composite grades.
• Swath plots - graphical display of the grade distribution
to compare the grade within these bands of the
composite samples and the block estimated grades.
• Reconciliation - compare the estimated Mineral
Resource inside the north and south stope outlines
against production records.
• All modes of validation have produced acceptable results.
• Flake size estimation was completed using inverse distance
for all lodes. Flake size estimation code, 1= Fine, 2=Medium,
3=Coarse has been used and more than 90% of blocks have
a flake size code with overall mean of 2.6 indicating a
reasonable level of consistency.
• The Mineral Resource has not been updated this year. The

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 87

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
reported Mineral resource has been estimated by depletion
methodology for 2022.
• The resource tonnages are estimated on a dry basis.
• The current reported resource was declared at a cut-off
grade of 10%, based on the economic criteria established by
the ongoingmining Skaland operations.
• Currently, mining is conducted by long hole open stopping in
a top-down sequence and targeting resources between
levels +5m to -115m (below sea level).
• The level height is 20m with ore extraction from the bottom
of each level.
• It is assumed due to geotechnical considerations no mining
may take place within 10m of the mountainside.
• Down-dip development waste is backfill into the current
mining void which will allow safe access to further up-dip
resources and eliminate mine waste disposal outside the
Trælen mountain.
• Metallurgical factors have been taken from the current
processing plant.
• Any changes that MRC undertake have not been quantified
or assumed to change the product specifications.
• All necessary environmental permits required to operate the
mine and process plant are in place.
• Any changes that MRC undertake have not been quantified
or assumed to change the product specifications.
Criteria JORC Code Explanation Commentary
reported Mineral resource has been estimated by depletion
methodology for 2022.
Moisture Whether the tonnages are
estimated on a dry basis or with
natural moisture, and the
method of determination of the
moisture content.		 • The resource tonnages are estimated on a dry basis.
Cut-off
parameters		 The basis of the adopted
cut-off grade(s) or quality
parameters applied.		 • The current reported resource was declared at a cut-off
grade of 10%, based on the economic criteria established by
the ongoingmining Skaland operations.
Mining factors
or assumptions		 Assumptions made regarding
possible mining methods,
minimum mining dimensions
and internal (or, if applicable,
external) mining dilution. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider potential mining
methods, but the assumptions
made regarding mining methods
and parameters when
estimating Mineral Resources
may not always be rigorous.
Where this is the case, this
should be reported with an
explanation of the basis of the
mining assumptions made.		 • Currently, mining is conducted by long hole open stopping in
a top-down sequence and targeting resources between
levels +5m to -115m (below sea level).
• The level height is 20m with ore extraction from the bottom
of each level.
• It is assumed due to geotechnical considerations no mining
may take place within 10m of the mountainside.
• Down-dip development waste is backfill into the current
mining void which will allow safe access to further up-dip
resources and eliminate mine waste disposal outside the
Trælen mountain.
Metallurgical
factors or
assumptions		 The basis for assumptions or
predictions regarding
metallurgical amenability. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider potential metallurgical
methods, but the assumptions
regarding metallurgical
treatment processes and
parameters made when
reporting Mineral Resources
may not always be rigorous.
Where this is the case, this
should be reported with an
explanation of the basis of the
metallurgical assumptions made		 • Metallurgical factors have been taken from the current
processing plant.
• Any changes that MRC undertake have not been quantified
or assumed to change the product specifications.
Environmental
factors or
assumptions		 Assumptions made regarding
possible waste and process
residue disposal options. It is
always necessary as part of the
process of determining
reasonable prospects for
eventual economic extraction to
consider the potential		 • All necessary environmental permits required to operate the
mine and process plant are in place.
• Any changes that MRC undertake have not been quantified
or assumed to change the product specifications.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 88

ASX: MRC ASX: MRC 28 April 2023

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
• In December 2019, a bulk density of 2.72 has been
measured from 12 samples, weighed dry then wet to
determine the density (Archimedes principle).
• No wax coating was used to seal the sample. Visual
inspection of the core indicates little loss of material due to
vugs or other void spaces.
• In August 2021, 17 samples were sent to ALS for specific
gravity measurement (OA-GRA08), 8 samples from host
rock (Amphibolite & Gneiss), resulted specific gravity of 2.9
and 9 samples from graphite reported specific gravity of
2.67.
• This release is based on the updated Mineral Resource for
Traelen graphite mine. The Maiden JORC Mineral
Resources was reported on 12 March 2020.
• The Mineral Resources have been classified in the
Measured, Indicated and Inferred Categories, in accordance
with the 2012 Australasian Code for Reporting of Mineral
Resources and Ore Reserves (JORC Code).
• A range of criteria has been considered in determining this
classification including:
• Geological continuity
• Data quality
• Drillhole spacing
• Modelling techniques
• Estimation properties including search strategy,
number of informing data, average distance of data
from
blocks
and
estimation
output
from
the
Criteria JORC Code Explanation Commentary
environmental impacts of the
mining and processing
operation. While at this stage the
determination of potential
environmental impacts,
particularly for a greenfield
project, may not always be well
advanced, the status of early
consideration of these potential
environmental impacts should
be reported. Where these
aspects have not been
considered, this should be
reported with an explanation of
the environmental assumptions
made.
Bulk density Whether assumed or
determined. If assumed, the
basis for the assumptions. If
determined, the method used,
whether wet or dry, the
frequency of the measurements,
the nature, size and
representativeness of the
samples.
The bulk density for bulk
material must have been
measured by methods that
adequately account for void
spaces (vugs, porosity, etc),
moisture and differences
between rock and alteration
zones within the deposit.
Discuss assumptions for bulk
density estimates used in the
evaluation process of the
different materials.		 • In December 2019, a bulk density of 2.72 has been
measured from 12 samples, weighed dry then wet to
determine the density (Archimedes principle).
• No wax coating was used to seal the sample. Visual
inspection of the core indicates little loss of material due to
vugs or other void spaces.
• In August 2021, 17 samples were sent to ALS for specific
gravity measurement (OA-GRA08), 8 samples from host
rock (Amphibolite & Gneiss), resulted specific gravity of 2.9
and 9 samples from graphite reported specific gravity of
2.67.
Classification The basis for the classification of
the Mineral Resources into
varying confidence categories.
Whether appropriate account
has been taken of all relevant
factors (ie relative confidence in
tonnage/grade estimations,
reliability of input data,
confidence in continuity of
geology and metal values,
quality, quantity and distribution
of the data).
Whether the result appropriately
reflects the Competent Person’s
view of the deposit.		 • This release is based on the updated Mineral Resource for
Traelen graphite mine. The Maiden JORC Mineral
Resources was reported on 12 March 2020.
• The Mineral Resources have been classified in the
Measured, Indicated and Inferred Categories, in accordance
with the 2012 Australasian Code for Reporting of Mineral
Resources and Ore Reserves (JORC Code).
• A range of criteria has been considered in determining this
classification including:
• Geological continuity
• Data quality
• Drillhole spacing
• Modelling techniques
• Estimation properties including search strategy,
number of informing data, average distance of data
from
blocks
and
estimation
output
from
the

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 89

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
interpolation
• Measured resources have been classified as such only
where there is recent mining development, with supporting
geological face mapping and sampling.
• Indicated resources are typically supported by a drillhole
spacing of between 20mx20m and up to 40mx40m.
• Inferred resources for drillhole spacing in excess of
40mx40m.
• Drillhole spacing greater than 100mx100m is considered to
be unclassified.
• Where geological complexity is greater, around folds etc,
inferred classification has been used.
• The results of the validation of the block model show
acceptable correlation of the input data to the estimated
grades.
• The Mineral Resource Classification has been reviewed by
and reflects the views of the Competent Person.
• The Mineral Resource has been reviewed internally as part
of normal validation processes by MRC.
• Wardell Armstrong International ("WAI") conducted a review
of the Mineral Resource Estimate and no material issues
were identified. Mr Ché Osmond (CGeol) and Mr Richard
Ellis (CGeol) (WAI) undertook an audit of the Mineral
Resource estimate as an independent technical review.
• The current Competent Person was not involved in the
preparation of the resource estimate. A desktop review was
completed before accepting responsibility as the Competent
Person. The current estimate and resource classification is
considered defendable. There is some uncertainty around
several assumptions and applications that need to be
investigated with more work, i.e.,
• 1. Undertaking of twin holes to verify the reliability of drilling.
• 2.
Comparing
calculated
density
to
actual
density
measurements and application across the model.
• 3. Additional QA/QC samples, consistent assaying of TGC
and additional density measurements.
• 4. Complete a simple 2D kriging estimation variance study
to verify that the current drill hole spacings used for
resource classification are appropriate.
• Calculated accuracy and confidence in the Mineral Resource
Estimate are not explicitly stated. However, relative accuracy
is reflected in the Resource classification, based on statistical
analysis, and comparing the output of the results from the
interpolation techniques with the mean statistical grades
lying within the individual domains.
• The Indicated and Inferred Mineral Resource Estimates are
considered to represent a local estimate as there is
reasonable confidence in the location of mineralisation.
Criteria JORC Code Explanation Commentary
interpolation
• Measured resources have been classified as such only
where there is recent mining development, with supporting
geological face mapping and sampling.
• Indicated resources are typically supported by a drillhole
spacing of between 20mx20m and up to 40mx40m.
• Inferred resources for drillhole spacing in excess of
40mx40m.
• Drillhole spacing greater than 100mx100m is considered to
be unclassified.
• Where geological complexity is greater, around folds etc,
inferred classification has been used.
• The results of the validation of the block model show
acceptable correlation of the input data to the estimated
grades.
• The Mineral Resource Classification has been reviewed by
and reflects the views of the Competent Person.
Audits or
reviews		 The results of any audits or
reviews of Mineral Resource
estimates.		 • The Mineral Resource has been reviewed internally as part
of normal validation processes by MRC.
• Wardell Armstrong International ("WAI") conducted a review
of the Mineral Resource Estimate and no material issues
were identified. Mr Ché Osmond (CGeol) and Mr Richard
Ellis (CGeol) (WAI) undertook an audit of the Mineral
Resource estimate as an independent technical review.
• The current Competent Person was not involved in the
preparation of the resource estimate. A desktop review was
completed before accepting responsibility as the Competent
Person. The current estimate and resource classification is
considered defendable. There is some uncertainty around
several assumptions and applications that need to be
investigated with more work, i.e.,
• 1. Undertaking of twin holes to verify the reliability of drilling.
• 2.
Comparing
calculated
density
to
actual
density
measurements and application across the model.
• 3. Additional QA/QC samples, consistent assaying of TGC
and additional density measurements.
• 4. Complete a simple 2D kriging estimation variance study
to verify that the current drill hole spacings used for
resource classification are appropriate.
Discussion of
relative
accuracy/
confidence		 Where appropriate, a statement
of the relative accuracy and
confidence level in the Mineral
Resource estimate using an
approach or procedure deemed
appropriate by the Competent
Person. For example, the
application of statistical or
geostatistical procedures to
quantify the relative accuracy of
the resource within stated		 • Calculated accuracy and confidence in the Mineral Resource
Estimate are not explicitly stated. However, relative accuracy
is reflected in the Resource classification, based on statistical
analysis, and comparing the output of the results from the
interpolation techniques with the mean statistical grades
lying within the individual domains.
• The Indicated and Inferred Mineral Resource Estimates are
considered to represent a local estimate as there is
reasonable confidence in the location of mineralisation.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 90

ASX: MRC ASX: MRC

ASX:
A
MRC
SX: MRC		 28 April 2023 28 April 2023
Commentary
• The Trælen deposit has been mined continuously for the past
15 years and, during this time, the high-grade nature of the
mineralisation has been proven.
• Globally the estimation is considered reasonable, while lack
of data in general will lead to short scale variability and local
estimation accuracy may be low.
• Production data from the mine has not been well
documented, but where it is available, grade estimations
from this estimate reconcile well with production data.
Criteria JORC Code Explanation Commentary
confidence limits, or, if such an
approach is not deemed
appropriate, a qualitative
discussion of the factors that
could affect the relative
accuracy and confidence of the
estimate.
The statement should specify
whether it relates to global or
local estimates, and, if local,
state the relevant tonnages,
which should be relevant to
technical and economic
evaluation. Documentation
should include assumptions
made and theprocedures used.		 • The Trælen deposit has been mined continuously for the past
15 years and, during this time, the high-grade nature of the
mineralisation has been proven.
• Globally the estimation is considered reasonable, while lack
of data in general will lead to short scale variability and local
estimation accuracy may be low.
• Production data from the mine has not been well
documented, but where it is available, grade estimations
from this estimate reconcile well with production data.

Section 4 Estimation and Reporting of Ore Reserves

(Criteria listed in the preceding sections also apply to this section)

Criteria JORC Code Explanation Commentary
Mineral
Resource
estimate for
conversion to
Ore Reserves		 Description of the Mineral
Resource estimate used as a
basis for the conversion to an
Ore Reserve.
Clear statement as to whether
the Mineral Resources are
reported additional to, or
inclusive of, the Ore Reserves.		 • This Ore Reserve is based on the updated Measured and
Indicated portion of the current reported Mineral Resource
at Trælen graphite mine.
• The Mineral Resource model is a 3D block model
reported at 10%TGC cut-off grade.
• Mineral Resources are reported inclusive of Ore
Reserves.
Site visits Comment on any site visits
undertaken by the Competent
Person and the outcome of
those visits.
If no site visits have been
undertaken indicate why this is
the case.		 • The Competent Person is currently principal mine
engineer and a fulltime employee of Skaland Graphite SA.
Study status The type and level of study
undertaken to enable Mineral
Resources to be converted to
Ore Reserves.
The Code requires that a study
to at least Pre-Feasibility Study
level has been undertaken to
convert Mineral Resources to
Ore Reserves. Such studies will
have been carried out and will
have determined a mine plan
that is technically achievable and
economically viable, and that
material Modifying Factors have
been considered.		 • The Trælen graphite mine is operational with down-dip
development commenced in June 2021. Current
operations
demonstrate
that
the
mine
planning
underpinning this Ore Reserve is technically achievable
and economically viable.
• Current financial model of operation at level of feasibility
study (FS) has been used and all geology and resource,
mining,
metallurgy,
process
plant
and
tailings,
infrastructure
and
logistics,
environment,
human
resources, marketing, capital and operating costs,
financial assessment factors have been reviewed against
the current operational achievements, or in the case of a
robust data set based on actual results achieved.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 91

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Appropriate modifying factors have been applied in the
estimation of Ore Reserve. The resulting mine plan is
technically achievable and economically viable.
• A value model was developed that assigns mining and
processing recoveries, costs, and revenue to the
geological model. This value model follows the entire
mining process from development to final rehabilitation.
• A cost/value model was formulated in Micromine
optimisation software from a simplified cash flow script to
generate at a block level of all the required attributes to
calculate the cash flow grades for the proposed
processing
permutations
for
subsequent
use
in
optimisation and strategic mine schedule optimisation.
• The basis for the application of the TGC cut-off grade is a
simplified variable cash flow per tonne. This approach
provides the most mathematically efficient inputs to solve
the objective function, as used consistently in the
optimisation models developed, which is to maximise the
real, pre-tax NPV.
• Blocks where the cash flow per tonne is positive are
designated ore and negative blocks are designated
waste.
• Currently, mining is conducted by long hole open stoping
in a topdown sequence and targeting resources between
levels +5m to 115m (below sea level).
• The level height is 20m with ore extraction from the
bottom of each level.
• It is assumed due to geotechnical considerations no
mining may take place within 10m of the mountainside. A
15m crown pillar has been left in place between the
existing ("up-dip") mining void and the downdip
development.
• Down-dip development waste is backfilled into the
existing mining void, which will allow safe access to
further up-dip resources and eliminate mine waste
disposal outside the Trælen mountain.
• The decline is designed with the following
principles:
• Minimum distance to the ore 40m
• Minimum turn radius 20m, 25m preferred
• To minimise the amount of development
• Maximise the number of straight sections for easier
development and driving
• Inclination of 1:7
• Long hole drill, face drilling rig (Jumbo), scaler,
underground truck and wheel loaders are used for
underground mining operation.
• Mining recovery of 90% is applied for stopes.
• Mining dilution was assumed to be 10% due to the mining
method used and complexity of the deposit.
Criteria JORC Code Explanation Commentary
• Appropriate modifying factors have been applied in the
estimation of Ore Reserve. The resulting mine plan is
technically achievable and economically viable.
Cut-off
parameters		 The basis of the cut-off grade(s)
or quality parameters applied.		 • A value model was developed that assigns mining and
processing recoveries, costs, and revenue to the
geological model. This value model follows the entire
mining process from development to final rehabilitation.
• A cost/value model was formulated in Micromine
optimisation software from a simplified cash flow script to
generate at a block level of all the required attributes to
calculate the cash flow grades for the proposed
processing
permutations
for
subsequent
use
in
optimisation and strategic mine schedule optimisation.
• The basis for the application of the TGC cut-off grade is a
simplified variable cash flow per tonne. This approach
provides the most mathematically efficient inputs to solve
the objective function, as used consistently in the
optimisation models developed, which is to maximise the
real, pre-tax NPV.
• Blocks where the cash flow per tonne is positive are
designated ore and negative blocks are designated
waste.
Mining factors
or assumptions		 The major assumptions made
and Mineral Resource model
used for pit and stope
optimisation (if appropriate).
The mining dilution factors used.
The mining recovery factors
used.
Any minimum mining widths
used.
The manner in which Inferred
Mineral Resources are utilised in
mining studies and the sensitivity
of the outcome to their inclusion.
The infrastructure requirements
of the selected mining methods.		 • Currently, mining is conducted by long hole open stoping
in a topdown sequence and targeting resources between
levels +5m to 115m (below sea level).
• The level height is 20m with ore extraction from the
bottom of each level.
• It is assumed due to geotechnical considerations no
mining may take place within 10m of the mountainside. A
15m crown pillar has been left in place between the
existing ("up-dip") mining void and the downdip
development.
• Down-dip development waste is backfilled into the
existing mining void, which will allow safe access to
further up-dip resources and eliminate mine waste
disposal outside the Trælen mountain.
• The decline is designed with the following
principles:
• Minimum distance to the ore 40m
• Minimum turn radius 20m, 25m preferred
• To minimise the amount of development
• Maximise the number of straight sections for easier
development and driving
• Inclination of 1:7
• Long hole drill, face drilling rig (Jumbo), scaler,
underground truck and wheel loaders are used for
underground mining operation.
• Mining recovery of 90% is applied for stopes.
• Mining dilution was assumed to be 10% due to the mining
method used and complexity of the deposit.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 92

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Inferred Mineral Resources were considered as waste.
• Annual material movement is planned to be limited to
0.1Mt per annum.
• Geotechnical and hydrogeology assessment and
recommendations provided by DTM Group.
• Based on the block model, the total mine waste rock
volumes are expected to be approximately 15,000
tonnes over a 13 year LOM. This equates to 54,000m3
of gray rock at an average in-situ bulk density of 2.9.
• Ventilation of the mine is planned to be done by using
fresh air shafts to bring fresh air to workings. The dirty
exhaust air will go out via the decline and empty stopes.
No exhaust fan or shaft is planned. Ventilation survey
carried out by DTM Group.
• Metallurgical factors have been taken from the current
processing plant.
• Skaland Graphite SA is processing the ore by
conventional metallurgical techniques include crushing,
grinding, floatation, screening and drying to produce
graphite concentrate of various flake size.
• The processing plant has a recovery of >91% of the
graphite in the feed which has a concentrate grade of 90%
TGC.
• The product fraction size is summarised in the below:
• Flake (+250 microns)
• Medium (+150 to -250 microns)
• Fine (+75 to -150 microns), and
• Powder (-75 microns)
• The
average product
size distribution (PSD) is
summarised in the below:
Criteria JORC Code Explanation Commentary
• Inferred Mineral Resources were considered as waste.
• Annual material movement is planned to be limited to
0.1Mt per annum.
• Geotechnical and hydrogeology assessment and
recommendations provided by DTM Group.
• Based on the block model, the total mine waste rock
volumes are expected to be approximately 15,000
tonnes over a 13 year LOM. This equates to 54,000m3
of gray rock at an average in-situ bulk density of 2.9.
• Ventilation of the mine is planned to be done by using
fresh air shafts to bring fresh air to workings. The dirty
exhaust air will go out via the decline and empty stopes.
No exhaust fan or shaft is planned. Ventilation survey
carried out by DTM Group.
Metallurgical
factors or
assumptions		 The metallurgical process
proposed and the
appropriateness of that process
to the style of mineralisation.
Whether the metallurgical
process is well-tested technology
or novel in nature.
The nature, amount and
representativeness of
metallurgical test work
undertaken, the nature of the
metallurgical domaining applied
and the corresponding
metallurgical recovery factors
applied.
Any assumptions or allowances
made for deleterious elements.
The existence of any bulk
sample or pilot scale test work
and the degree to which such
samples are considered
representative of the orebody as
a whole.		 • Metallurgical factors have been taken from the current
processing plant.
• Skaland Graphite SA is processing the ore by
conventional metallurgical techniques include crushing,
grinding, floatation, screening and drying to produce
graphite concentrate of various flake size.
• The processing plant has a recovery of >91% of the
graphite in the feed which has a concentrate grade of 90%
TGC.
• The product fraction size is summarised in the below:
• Flake (+250 microns)
• Medium (+150 to -250 microns)
• Fine (+75 to -150 microns), and
• Powder (-75 microns)
• The
average product
size distribution (PSD) is
summarised in the below:

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 93

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023 28 April 2023
Criteria JORC Code Explanation Commentary
For minerals that are defined by
a specification, has the ore
reserve estimation been based
on the appropriate mineralogy to
meet the specifications?
Product Product Grade
% of Production
Category (%C)
Flake 26.2 97.9
Medium 8.4 95.5
Fine-Medium 28.4 91.8
Powder 35 84.9
Specials 2 90
Environmental The status of studies of potential
environmental impacts of the
mining and processing
operation. Details of waste rock
characterisation and the
consideration of potential sites,
status of design options
considered and, where
applicable, the status of
approvals for process residue
storage and waste dumps
should be reported.		 • Significant environmental assessment work has been
undertaken. The environmental permits are based on the
discharge of 40,000t of tailings to sea per year from the
County Governor of Troms and Finnmark and all
environmental permits required to operate the mine and
process plant are in place.
• From the mine, the wastewater is filtered before it goes to
the sea. Samples of the water are taken every second
month to control of solid density.
• The waste rocks (grey rock) from the mine can be
deposited through a hole in the mountain and down the
mountain wall. It can be deposited until it reaches the sea.
This looks like the natural scree slopes that are
everywhere in Trælen mountain.
• The tailings from the flotation circuit are sent to a
thickener within the processing building for water
recovery. The thickener underflow is relatively dilute, at
around 180m from the shoreline and at least at 30m
depth. Tailings must contain no more than 120g/l of solid
density to be sure that the tailings are deposited close to
the point of deposit. The limit values for components with
requirements to be measured are:
Component
Short Time Limit
(g/day)
Long Time Limit
(g/year)
Zn
4.11
1,500
Ni
14.25
5,200
Cu
2.74
1,000
Cr
1.37
500
• The Company has conducted testwork to optimise the
Production of tailings to support expansion, targeting the
Production of high volume/low sulphides/low metals tails
and a smaller volume of high S/high metals tailings.
These streams would then be disposed separately.
• NIVA, as an independent environmental consultant, has
done testing on the impact the tailing from the plant has
on the fjord. They recommended to discharge the tailings

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 94

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
point in deeper level.
• In 2021, NTNU did testing on the tailings to evaluate
implementation of a method in the process to extract most
of the harmful components from the tailings.
• In the processing plant, there is some dust emission into
air from the chimney and from the main ventilation
exhaust. It must be <5g/m2. The latest assessment was
done in August 2021 and it was below the limit.
• Noise zone maps are prepared for all relevant operations
to be sure that the people living around the operation are
not negatively disturbed.
• General wastes are sorting into appropriate containers
and are delivered to environmental or recycle stations.
• All the infrastructure requirements for the project already
exist at the Skaland site.
• The Skaland Project, and Trælen deposit, are located on
the Island of Senja but can be reached from the mainland
via the 862 and 86 paved highway via a bridge spanning
the Gisundet strait to the town of Finnsnes. To access the
Trælen deposit, a graded road of some 7.5km was
constructed around the northern coastline of the
peninsula.
• Graphite ore is trucked from the Trælen deposit to the
Skaland processing plant. The Project is accessible, and
operational, throughout the year and is not impacted by
climatic conditions.
• There is a well-established local community supporting
the operation along with good quality infrastructure.
• The Skaland process plant is located adjacent to its own
dedicated (ice-free) quay that allows the graphite
concentrate to be shipped throughout the year. The port
has an ISPS status, code NOSAA-0001. A small amount
of concentrate is transported by truck to customers within
Europe.
• The mine is connected to a 22kV network. The processing
plant is connected to the national grid with a 22 kV line to
three main transformers, 1600 kA, 1000 kA and 500 kA.
• Skaland Graphite AS utilises water from two sources, the
Trælen mine and from the mountains. There is a natural
pond with 175,000m3 of water storage capacity. Process
water comes mainly from the thickener overflow and from
the concentrate filter.
• Propene is used for drying graphite. Tank volume is
87.4m3 and the tank is taken care of by gas supplier. The
gas tank is buried to ground for external fire protection.
Criteria JORC Code Explanation Commentary
point in deeper level.
• In 2021, NTNU did testing on the tailings to evaluate
implementation of a method in the process to extract most
of the harmful components from the tailings.
• In the processing plant, there is some dust emission into
air from the chimney and from the main ventilation
exhaust. It must be <5g/m2. The latest assessment was
done in August 2021 and it was below the limit.
• Noise zone maps are prepared for all relevant operations
to be sure that the people living around the operation are
not negatively disturbed.
• General wastes are sorting into appropriate containers
and are delivered to environmental or recycle stations.
Infrastructure The existence of appropriate
infrastructure: availability of land
for plant development, power,
water, transportation (particularly
for bulk commodities), labour,
accommodation; or the ease
with which the infrastructure can
be provided, or accessed.		 • All the infrastructure requirements for the project already
exist at the Skaland site.
• The Skaland Project, and Trælen deposit, are located on
the Island of Senja but can be reached from the mainland
via the 862 and 86 paved highway via a bridge spanning
the Gisundet strait to the town of Finnsnes. To access the
Trælen deposit, a graded road of some 7.5km was
constructed around the northern coastline of the
peninsula.
• Graphite ore is trucked from the Trælen deposit to the
Skaland processing plant. The Project is accessible, and
operational, throughout the year and is not impacted by
climatic conditions.
• There is a well-established local community supporting
the operation along with good quality infrastructure.
• The Skaland process plant is located adjacent to its own
dedicated (ice-free) quay that allows the graphite
concentrate to be shipped throughout the year. The port
has an ISPS status, code NOSAA-0001. A small amount
of concentrate is transported by truck to customers within
Europe.
• The mine is connected to a 22kV network. The processing
plant is connected to the national grid with a 22 kV line to
three main transformers, 1600 kA, 1000 kA and 500 kA.
• Skaland Graphite AS utilises water from two sources, the
Trælen mine and from the mountains. There is a natural
pond with 175,000m3 of water storage capacity. Process
water comes mainly from the thickener overflow and from
the concentrate filter.
• Propene is used for drying graphite. Tank volume is
87.4m3 and the tank is taken care of by gas supplier. The
gas tank is buried to ground for external fire protection.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 95

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• Capital and operating underground development and
stoping costs are based on existing mining and supply
contracts and were used to convert the Trælen Mineral
Resources to Ore Reserves. Project to date mining of
Trælen has established the technical feasibility and
profitable extraction of the mineralised lodes by
underground method.
• The capital infrastructure, mining, associated equipment,
and processing plant are in place. All the processing plant
and infrastructure required for the processing operation is
already owned by MRC, with only minor modifications or
upgrades required.
• The operating cost estimate for the Project includes all
costs associated with processing, infrastructure, and site-
based general and administration costs.
• The operating cost estimate has been prepared to an
accuracy of ±10%.
• Industry
standards,
quotations
from
vendors
or
information from the operating cost database and
information from the process design criteria underlie the
basis of the estimate.
• The operating costs have been compiled by Skaland
Graphite AS and MRC from a variety of sources and
additional consultants including:
• Budget quotations received from suppliers
• Operating cost database
• Wages and salaries, general and administration
costs
• First principal estimates based on typical operating
data
• Royalties have been calculated at NOK14.6 per tonne of
product sold payable to the landowners.
• NOK2.03 per tonne mine out ore is payable to the
Norwegian Directorate of Mining as a rehabilitation cost.
• All amounts have been modelled in US dollars with
foreign estimated inflows/outflows converted to US
dollars at an average exchange rate forecast for the
relevant transaction year. The forecast exchange rate of
USD/NOK 8.4 and USD/AUD 1.3 used reflects long term
exchange forecasts with an accuracy of ±10%.
• The Trælen Ore Reserve estimate will produce a revenue
stream from sale of graphite concentrate. Revenue from
the Project is derived from the sale of graphite
concentrates in different size fractions.
• The price assumptions are based on contracted sales
agreements. Forecast prices for each flake size were
provided by Benchmark Mineral Intelligence. • Revenue
estimates are based on independent market pricing and
life-of-mine concentrate production of 10,000tpa.
• Transport and treatment charges as well as other
administration charges incurred on site are all based upon
Criteria JORC Code Explanation Commentary
Costs The derivation of, or
assumptions made, regarding
projected capital costs in the
study.
The methodology used to
estimate operating costs.
Allowances made for the content
of deleterious elements.
The source of exchange rates
used in the study.
Derivation of transportation
charges.
The basis for forecasting or
source of treatment and refining
charges, penalties for failure to
meet specification, etc.
The allowances made for
royalties payable, both
Government and private.		 • Capital and operating underground development and
stoping costs are based on existing mining and supply
contracts and were used to convert the Trælen Mineral
Resources to Ore Reserves. Project to date mining of
Trælen has established the technical feasibility and
profitable extraction of the mineralised lodes by
underground method.
• The capital infrastructure, mining, associated equipment,
and processing plant are in place. All the processing plant
and infrastructure required for the processing operation is
already owned by MRC, with only minor modifications or
upgrades required.
• The operating cost estimate for the Project includes all
costs associated with processing, infrastructure, and site-
based general and administration costs.
• The operating cost estimate has been prepared to an
accuracy of ±10%.
• Industry
standards,
quotations
from
vendors
or
information from the operating cost database and
information from the process design criteria underlie the
basis of the estimate.
• The operating costs have been compiled by Skaland
Graphite AS and MRC from a variety of sources and
additional consultants including:
• Budget quotations received from suppliers
• Operating cost database
• Wages and salaries, general and administration
costs
• First principal estimates based on typical operating
data
• Royalties have been calculated at NOK14.6 per tonne of
product sold payable to the landowners.
• NOK2.03 per tonne mine out ore is payable to the
Norwegian Directorate of Mining as a rehabilitation cost.
• All amounts have been modelled in US dollars with
foreign estimated inflows/outflows converted to US
dollars at an average exchange rate forecast for the
relevant transaction year. The forecast exchange rate of
USD/NOK 8.4 and USD/AUD 1.3 used reflects long term
exchange forecasts with an accuracy of ±10%.
Revenue
factors		 The derivation of, or
assumptions made regarding
revenue factors including head
grade, metal or commodity
price(s) exchange rates,
transportation and treatment
charges, penalties, net smelter
returns, etc.
The derivation of assumptions
made of metal or commodity
price(s), for the principal metals,
minerals and co-products.		 • The Trælen Ore Reserve estimate will produce a revenue
stream from sale of graphite concentrate. Revenue from
the Project is derived from the sale of graphite
concentrates in different size fractions.
• The price assumptions are based on contracted sales
agreements. Forecast prices for each flake size were
provided by Benchmark Mineral Intelligence. • Revenue
estimates are based on independent market pricing and
life-of-mine concentrate production of 10,000tpa.
• Transport and treatment charges as well as other
administration charges incurred on site are all based upon

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 96

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
actual costs being incurred mining the Trælen ore lodes.
• There are no by-products, co-products, or deleterious
elements in the concentrate.
• Forecast prices for graphite concentrate products (2021-
2027) were incorporated into the model.
• Revenue estimates are base case only.
• Skaland is the largest flake graphite producer in Europe
and the fourth-largest producer globally outside of China.
Skaland is presently one of the world's highest-grade
operating flake graphite mines with mill feed grade
averaging around 25%C. Skaland accounts for around
2% of global annual natural flake graphite production.
• Production of Natural Graphite, including all three forms
of it (Amorphous, Flake, Vein) is 0.95 million tpa. China,
with 60% share, is the biggest producer and seller.
• The refractory market still has the biggest share in
graphite consumption and graphite mainly goes into
Magnesia Carbon bricks for iron and steel production. It
is estimated that around 0.5kg of natural graphite is
consumed per tonne of steel, besides the given market
share of 28%. It is estimated that refractories consume
600,000 tonnes of graphite every year.
• Current demand for natural flake graphite is estimated at
approximately
750,000
tonnes
per
annum
with
approximately 26% of total graphite demand attributed to
the lithium-ion battery market. Independent market
research forecasts that the lithium-ion battery market will
grow at an annual rate of 16% to 2023 for approximately
696,000 tonnes of lithium-ion batteries (or 51% of the total
annual demand). By 2030, the annual demand for
graphite for lithium-ion batteries is projected at 2.9M
tonnes, or 80% of the total projected annual demand of
3.6M tonnes. Natural flake graphite demand from 2015
to 2040 for all end uses is forecast to grow at an average
of over 12% per year, though this is dominated by lithium-
ion battery demand. Primarily because of projected
increases in demand for natural flake graphite in lithium-
ion batteries, the graphite market is projected to be in
undersupply from 2020, with the supply deficit growing as
projected lithium-ion battery demand ramps up.
• Based on MRC's market approach, the focus is:
• Possible value additions to our product, producing
high purity graphite, developing expandable
Production etc.
• Specialty product markets, targeting Alkaline
batteries,
Lubricants,
Powder
Metallurgy,
Conductive additives, etc.
• Diversified and customer specific products, closely
engaging with customers and developing the right
products for the customers' requirements.
• Total value proposition: packaging, logistics,
offering short delivery times, fast response times,
consistent quality etc.
Criteria JORC Code Explanation Commentary
actual costs being incurred mining the Trælen ore lodes.
• There are no by-products, co-products, or deleterious
elements in the concentrate.
• Forecast prices for graphite concentrate products (2021-
2027) were incorporated into the model.
• Revenue estimates are base case only.
Market
assessment		 The demand, supply and stock
situation for the particular
commodity, consumption trends
and factors likely to affect supply
and demand into the future.
A customer and competitor
analysis along with the
identification of likely market
windows for the product.
Price and volume forecasts and
the basis for these forecasts.
For industrial minerals the
customer specification, testing
and acceptance requirements
prior to a supply contract.		 • Skaland is the largest flake graphite producer in Europe
and the fourth-largest producer globally outside of China.
Skaland is presently one of the world's highest-grade
operating flake graphite mines with mill feed grade
averaging around 25%C. Skaland accounts for around
2% of global annual natural flake graphite production.
• Production of Natural Graphite, including all three forms
of it (Amorphous, Flake, Vein) is 0.95 million tpa. China,
with 60% share, is the biggest producer and seller.
• The refractory market still has the biggest share in
graphite consumption and graphite mainly goes into
Magnesia Carbon bricks for iron and steel production. It
is estimated that around 0.5kg of natural graphite is
consumed per tonne of steel, besides the given market
share of 28%. It is estimated that refractories consume
600,000 tonnes of graphite every year.
• Current demand for natural flake graphite is estimated at
approximately
750,000
tonnes
per
annum
with
approximately 26% of total graphite demand attributed to
the lithium-ion battery market. Independent market
research forecasts that the lithium-ion battery market will
grow at an annual rate of 16% to 2023 for approximately
696,000 tonnes of lithium-ion batteries (or 51% of the total
annual demand). By 2030, the annual demand for
graphite for lithium-ion batteries is projected at 2.9M
tonnes, or 80% of the total projected annual demand of
3.6M tonnes. Natural flake graphite demand from 2015
to 2040 for all end uses is forecast to grow at an average
of over 12% per year, though this is dominated by lithium-
ion battery demand. Primarily because of projected
increases in demand for natural flake graphite in lithium-
ion batteries, the graphite market is projected to be in
undersupply from 2020, with the supply deficit growing as
projected lithium-ion battery demand ramps up.
• Based on MRC's market approach, the focus is:
• Possible value additions to our product, producing
high purity graphite, developing expandable
Production etc.
• Specialty product markets, targeting Alkaline
batteries,
Lubricants,
Powder
Metallurgy,
Conductive additives, etc.
• Diversified and customer specific products, closely
engaging with customers and developing the right
products for the customers' requirements.
• Total value proposition: packaging, logistics,
offering short delivery times, fast response times,
consistent quality etc.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 97

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• MRC has existing customers for graphite products from
its Skaland operation.
Product
Price (US$/t)
Flake
$1,010
Medium
$800
Fine-Medium
$680
Powder
$510
Specials
$770
Micronised
$2,400
• Price
assumptions
are
cross
referenced
against
Benchmark Mineral Intelligence assumptions over the
coming years.
• Economic analysis was carried out using established site
costs for mining, geology, processing and administration.
• A discount rate of 7% (real) was applied, reflecting the
weighted average cost of capital expected from debt
funding the project.
• Sensitivities to existing unit costs, principally of
underground mining, were carried out to establish the
viability of the Trælen Ore Reserves. An undiscounted
and uninflated cashflow model was used to evaluate the
economic return of the mine plan underlying the Ore
Reserves.
• As an ongoing operation, monthly cost review is
undertaken along with geological reconciliation to analyse
conformance to the expectations that form the basis of the
Ore Reserve estimation.
• Sensitivities of the NPV to changes in key assumptions
have been analysed. These were run on the following key
model assumptions: graphite recovery, exchange rate,
discount rate, operating costs, and capital costs. In each
case, the sensitivities run was regarded as a possible
downside scenario and a possible upside scenario based
on the historic experience of mining projects.
• All cashflows have been prepared in real terms, assuming
2021 dollars, with no inflation of graphite concentrate
prices.
• Skaland Graphite has been running on and off since 1918
and it has been a part of the local community. The local
community is familiar with the characteristics of mining,
processing and product transport, as other resource
extraction operations occur within the district. Stakeholder
consultation conducted to date has identified that most of
the community is supportive of the Project.
• In earlier years, Skaland Graphite assisted workers and
their families to get a place to live. Many of the older
people in the area have either worked at the mine or had
Criteria JORC Code Explanation Commentary
• MRC has existing customers for graphite products from
its Skaland operation.
Product
Price (US$/t)
Flake
$1,010
Medium
$800
Fine-Medium
$680
Powder
$510
Specials
$770
Micronised
$2,400
• Price
assumptions
are
cross
referenced
against
Benchmark Mineral Intelligence assumptions over the
coming years.
Economic The inputs to the economic
analysis to produce the net
present value (NPV) in the study,
the source and confidence of
these economic inputs including
estimated inflation, discount rate,
etc.
NPV ranges and sensitivity to
variations in the significant
assumptions and inputs.		 • Economic analysis was carried out using established site
costs for mining, geology, processing and administration.
• A discount rate of 7% (real) was applied, reflecting the
weighted average cost of capital expected from debt
funding the project.
• Sensitivities to existing unit costs, principally of
underground mining, were carried out to establish the
viability of the Trælen Ore Reserves. An undiscounted
and uninflated cashflow model was used to evaluate the
economic return of the mine plan underlying the Ore
Reserves.
• As an ongoing operation, monthly cost review is
undertaken along with geological reconciliation to analyse
conformance to the expectations that form the basis of the
Ore Reserve estimation.
• Sensitivities of the NPV to changes in key assumptions
have been analysed. These were run on the following key
model assumptions: graphite recovery, exchange rate,
discount rate, operating costs, and capital costs. In each
case, the sensitivities run was regarded as a possible
downside scenario and a possible upside scenario based
on the historic experience of mining projects.
• All cashflows have been prepared in real terms, assuming
2021 dollars, with no inflation of graphite concentrate
prices.
Social The status of agreements with
key stakeholders and matters
leading to social licence to
operate.		 • Skaland Graphite has been running on and off since 1918
and it has been a part of the local community. The local
community is familiar with the characteristics of mining,
processing and product transport, as other resource
extraction operations occur within the district. Stakeholder
consultation conducted to date has identified that most of
the community is supportive of the Project.
• In earlier years, Skaland Graphite assisted workers and
their families to get a place to live. Many of the older
people in the area have either worked at the mine or had

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 98

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
someone in their family that worked in Skaland
operations. Currently, 35 people work directly in the
operation and a lot of families live in Skaland because
some of them work at Skaland Graphite AS.
• Together with the fishing industry, Skaland Graphite AS
is the most important workplace in the area, and it is an
important part of the local economy of the district.
• The Skaland operations are not new, all regulatory
approvals have been granted, no economic evaluation or
justification is required.
• The stated Ore Reserve estimate is not materially
affected by any known environmental, permitting, legal,
title, taxation, socioeconomic, marketing, political or other
relevant issues, to the best knowledge of the authors.
There is no known mining, metallurgical, infrastructure, or
other factors that materially affect this Ore Reserve
estimate, at this time.
• The Mineral Resource classifies all mineralisation at
Trælen as Measured, Indicated, and Inferred and 100%
of the maiden Ore Reserve has been derived from
Measured and Indicated Mineral Resources.
• The classification reflects the Competent Person's view of
the deposit.
• Optimisations and the proposed mining schedule are
cognisant of the Mineral Resource classification.
• The Ore Reserve methodology and estimates has been
reviewed internally as part of normal validation processes
by MRC.
Criteria JORC Code Explanation Commentary
someone in their family that worked in Skaland
operations. Currently, 35 people work directly in the
operation and a lot of families live in Skaland because
some of them work at Skaland Graphite AS.
• Together with the fishing industry, Skaland Graphite AS
is the most important workplace in the area, and it is an
important part of the local economy of the district.
Other To the extent relevant, the
impact of the following on the
project and/or on the estimation
and classification of the Ore
Reserves:
Any identified material naturally
occurring risks.
The status of material legal
agreements and marketing
arrangements.
The status of governmental
agreements and approvals
critical to the viability of the
project, such as mineral
tenement status, and
government and statutory
approvals. There must be
reasonable grounds to expect
that all necessary Government
approvals will be received within
the timeframes anticipated in the
Pre- Feasibility or Feasibility
study. Highlight and discuss the
materiality of any unresolved
matter that is dependent on a
third party on which extraction of
the reserve is contingent.		 • The Skaland operations are not new, all regulatory
approvals have been granted, no economic evaluation or
justification is required.
• The stated Ore Reserve estimate is not materially
affected by any known environmental, permitting, legal,
title, taxation, socioeconomic, marketing, political or other
relevant issues, to the best knowledge of the authors.
There is no known mining, metallurgical, infrastructure, or
other factors that materially affect this Ore Reserve
estimate, at this time.
Classification The basis for the classification of
the Ore Reserves into varying
confidence categories.
Whether the result appropriately
reflects the Competent Person’s
view of the deposit.
The proportion of Probable Ore
Reserves that have been
derived from Measured Mineral
Resources (if any).		 • The Mineral Resource classifies all mineralisation at
Trælen as Measured, Indicated, and Inferred and 100%
of the maiden Ore Reserve has been derived from
Measured and Indicated Mineral Resources.
• The classification reflects the Competent Person's view of
the deposit.
• Optimisations and the proposed mining schedule are
cognisant of the Mineral Resource classification.
Audits or
reviews		 The results of any audits or
reviews of Ore Reserve
estimates.		 • The Ore Reserve methodology and estimates has been
reviewed internally as part of normal validation processes
by MRC.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 99

ASX: MRC ASX: MRC

ASX:
MRC
ASX: MRC		 28 April 2023 28 April 2023
Commentary
• This is considered to be a maiden Ore Reserve Estimate
under the guidelines of the JORC Code (2012) since this
is the first reserve estimate completed in this project.
• The Ore Reserve has been peer reviewed internally and
the Competent Person is confident that it is an accurate
estimate of the Deflector Reserve.
• The mining and processing methods selected are typical
for graphite and have been demonstrated in various other
operations. They are considered a low risk of impacting
the Ore Reserves.
• There
is
a
degree
of
uncertainty
regarding
hydrogeological models. Further hydrogeological study
and geotechnical work is recommended.
• All costs used in the optimisation and Ore Reserve
process are supported by an extended operational history
and actual results from the Skaland operation.
Criteria JORC Code Explanation Commentary
Discussion of
relative
accuracy/
confidence		 Where appropriate a statement
of the relative accuracy and
confidence level in the Ore
Reserve estimate using an
approach or procedure deemed
appropriate by the Competent
Person. For example, the
application of statistical or
geostatistical procedures to
quantify the relative accuracy of
the reserve within stated
confidence limits, or, if such an
approach is not deemed
appropriate, a qualitative
discussion of the factors which
could affect the relative accuracy
and confidence of the estimate.
The statement should specify
whether it relates to global or
local estimates, and, if local,
state the relevant tonnages,
which should be relevant to
technical and economic
evaluation. Documentation
should include assumptions
made and the procedures used.
Accuracy and confidence
discussions should extend to
specific discussions of any
applied Modifying Factors that
may have a material impact on
Ore Reserve viability, or for
which there are remaining areas
of uncertainty at the current
study stage.
It is recognised that this may not
be possible or appropriate in all
circumstances. These
statements of relative accuracy
and confidence of the estimate
should be compared with
production data, where available.		 • This is considered to be a maiden Ore Reserve Estimate
under the guidelines of the JORC Code (2012) since this
is the first reserve estimate completed in this project.
• The Ore Reserve has been peer reviewed internally and
the Competent Person is confident that it is an accurate
estimate of the Deflector Reserve.
• The mining and processing methods selected are typical
for graphite and have been demonstrated in various other
operations. They are considered a low risk of impacting
the Ore Reserves.
• There
is
a
degree
of
uncertainty
regarding
hydrogeological models. Further hydrogeological study
and geotechnical work is recommended.
• All costs used in the optimisation and Ore Reserve
process are supported by an extended operational history
and actual results from the Skaland operation.

==> picture [71 x 29] intentionally omitted <==

ABN 39 008 478 653 [email protected] www.mncom.com.au

Page 100

More from MINERAL COMMODITIES LTD

Delisting Announcement 2026
Apr 23
Board/Management Information 2026
Mar 16
Capital/Financing Update 2026
Mar 8
Regulatory Filings 2026
Jan 19
Board/Management Information 2026
Jan 5
Regulatory Filings 2025
Dec 17
Capital/Financing Update 2025
Nov 5
Capital/Financing Update 2025
Nov 2
Interim / Quarterly Report 2025
Oct 30
Director's Dealing 2025
Sep 2
View all filings →