MINERAL COMMODITIES LTD — Capital/Financing Update 2012

Jul 30, 2012

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Mineral Commodities Ltd

ACN 008 478 653 ABN 39 008 478 653

40 Murray Road North Welshpool WA 6106, Australia PO Box 235, Welshpool DC WA 6986, Australia Telephone: 61 8 6253 1100 Facsimile: 61 8 9258 3601 Email: info@mncom.com.au Web: www.mncom.com.au

31 July 2012

Company Announcements Platform Australian Stock Exchange Limited

**MRC

poised to accelerate development of Tormin Mineral Sands Project after securing final Environmental Approvals**

Mineral Commodities Limited (ASX:MRC) (MRC or the Company) is pleased to advise that its subsidiary, Mineral Sands Resources (Pty) Ltd, has received notification from the Department of Environmental Affairs and Development Planning that the Environmental Management Programme (EMP) for its proposed mining activities at the Tormin Mineral Sands Project (“Tormin”) has been approved by the Regional Director for the Western Cape.

The EMP was the final material impediment to the Company proceeding to undertake accelerated development activities and the Company is therefore now in a position to proceed to ensure appropriate financing is in place to develop Tormin for production to commence in the first half of 2013.

The decision vindicates the Company’s tenacity in maintaining its desire to proceed to develop its South African Mineral Sands assets and is pleased to be able to announce this to its loyal shareholders.

Background

Tormin is located on the west coast of South Africa, approximately 400km north of Cape Town. The predominant minerals of value are zircon and rutile, which are contained in a high grade beach placer deposit north of the Oliphants River outfall.

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

Perth-based MSP Engineering Pty Ltd (MSP Engineering) completed the process engineering, including PFD’s, P&ID’s, Mass Balances and Process Design Criteria based on the DFS and submitted designs for the primary wet concentrators based on the beach and the SCP. MSP Engineering also prepared scope specifications and distributed tender documents. The engineering design provides for primary beach concentration of 1.1 Mtpa producing 45,000 to 50,000 tonnes of non-magnetic concentrate grading up to 80% zircon and 10% rutile.

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Accordingly, the Company will commence construction, commissioning and operation of Tormin as soon as it has raised the necessary funds.

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Project Economics and Development Costs

Current economic estimates based on the DFS for Tormin are robust. Based on an initial 5-year Life of Mine extracting Zircon and Rutile non-magnetic concentrate, economic models suggest an NPV of AUD$68.9m with an IRR of 87.9%.

Engineering plans are substantially progressed for dry separation, which would enable further upgrading of non-magnetic concentrates as well as the separation and sale of Ilmenite and Garnet, which will further enhance the project economics.

The following capital cost summary estimate, including provisions for upgrading existing roads; bulk earthworks for the proposed SCP; all concrete works; fabrication and construction of the beach concentrators and the SCP; all equipment, storage and process facilities; installation of equipment and mechanical and piping services; and electrical and instrumentation and scope, has been developed for Tormin:

Tormin:
Capital Cost Summary	Total($)
Owner’s Costs	2,500,000
Indirects	1,500,000
Construction Indirects	9,000,000
EPCM	3,000,000
Total(including EPCM)	16,000,000

MRC anticipates that the expenditure of $16,000,000 on development or project expenditure will bring Tormin into production during the first half in 2013, with the necessary works to commence hydraulic mining and processing of concentrate with the installation of primary processing facilities on the beach and at the SCP to commence immediately.

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Funding

Funding for the project is under review and may incorporate the sale of all non-core investments, assessment of product off-take finance as well as debt, with a view to minimizing the size of an equity issue.

At the Company’s Annual General Meeting held of 31 May 2012, shareholders approved the allotment and issue of sufficient MRC shares to raise up to $20,000,000 (twenty million) for the development of Tormin if required.

The Company is hopeful to be in a position to complete all financing and product off-take in the near term and will keep the market informed.

For further information please contact:

Mark Caruso Managing Director

Peter Torre Company Secretary