MINERAL COMMODITIES LTD — Capital/Financing Update 2013

Jul 30, 2013

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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 2013

MRC SECURES OFF-TAKE FOR 100% OF TORMIN MINERAL SANDS NON-MAG CONCENTRATE PRODUCT AND SECURES US$2 MILLION PRE FINANCE ARRANGEMENT

Highlights

• Offtake Agreement concluded with Wogen

• Includes Pre-Finance Arrangement of US$2 million

• Further Offtake Negotiations Ongoing for other minerals

• Tormin Project Development Remains on Schedule and on Budget

• Offshore Studies due to Commence

Mineral Commodities Limited (ASX:MRC) (MRC or the Company) is pleased to advise that it has concluded a Pre-Finance and Offtake Agreement with Wogen Pacific Limited (Wogen) in relation to the Tormin Mineral Sands Project (Tormin).

Offtake Agreement

MRC and its subsidiary, Mineral Sands Resources Proprietary Limited (MSR), which owns Tormin have concluded a Pre Finance and Marketing Agreement (Agreement) with Wogen for 100% of the non-magnetic concentrate (Concentrate), comprising primarily Zircon and Rutile, to be produced at Tormin. Pursuant to the Agreement, Wogen will pay MSR for the Concentrate at an FOB level. Thereafter, Wogen will fund the shipping and processing of the Concentrate until such time as it is sold into the local Chinese market in finished product form, with sale proceeds net of commission, shipping and processing costs being paid over to MSR.

Accordingly, the Agreement provides MRC with significant working capital finance as well as access to the full mineral sands value chain without investment in its own dry processing facilities.

The Agreement is for an initial term of 3 years with evergreen provisions thereafter unless terminated by either party.

Pre-Finance Arrangement

Incorporated into the Agreement, Wogen will provide MRC with a Pre-finance Arrangement (Arrangement) of US$2 million with effect from July 2013, to be drawn anytime up to 31 December 2013. Interest will accrue on the Arrangement from the time it is drawn. However, capital and interest will only become payable when Tormin comes into commercial production. Thereafter, capital and interest repayments will be made quarterly in arrears with the entire amount re-paid within 12 months of commercial production.

Executive Chairman Mr Mark Caruso commented: “ The Agreement is particularly pleasing as the Pre-finance Arrangement and working capital support clearly demonstrates Wogen’s belief in the project and reinforces the Board’s long held view that Tormin is a high quality asset that will produce premium quality mineral sands products. Moreover, Wogen’s extensive experience and relationships in Asia provide the Company with unparalleled access to the key markets in this sector.”

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Background on Wogen

Established in 1972 as a metal and minerals trading company with a strong China focus, Wogen has grown into one of the most diversified suppliers of high-value raw materials to the non-ferrous industry worldwide.

Wogen specialise in off exchange metals and minerals ranging from Antimony to Zircon and the company was a founding member of the Minor Metals Trade Association. Wogen trades in a full range of products for industrial end use and has established a reputation in electronic metals, ferro-alloys, the Platinum group of metals and other metals and minerals not traded on an exchange.

Wogen also has a long and significant history in mineral sands. Wogen’s wholly-owned Chinese subsidiary allows it to import, convert and distribute high quality products and trade with Chinese inland customers in local currency.

Further Offtake Negotiations

MRC remains in negotiation with potential offtake partners in relation to other minerals to be produced at Tormin, with a primary focus on Ilmentite. These negotiations are significantly developed and the Company hopes to be in a position to complete product offtake agreement for these products in the near term and will keep the market informed.

Tormin Development Schedule and Budget

As previously announced to the market, all major equipment and fabrication orders for the construction and commissioning of Tormin have been awarded. Project development remains on schedule and commercial production is still expected in the last quarter of 2013.

MRC remains funded to complete the development of Tormin. The Arrangement from Wogen, together with other funding initiatives currently being considered by the Company, including further offtake finance, debt and equity, will ensure the Company is well placed to fund the required level of start up working capital to the project into production.

Project Economics and Further Development

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

Engineering plans are substantially progressed for dry separation of the magnetic concentrates, which would enable the separation and sale of Ilmenite and Garnet which will further enhance the Project economics i.e an NPV of $94m and IRR of 97%. Development of the required dry processing facilities is expected to cost approximately $8 million which is expected to be funded in due course by the Company’s internal resources.

Life of Mine

The established geology of the region confirms that the source of the beach deposits is a Heavy Mineral-rich offshore zone and that the dynamic coastline serves to replenish the beaches by transporting sediment from deeper waters. MRC has been granted a prospecting right for the offshore area adjacent to the Tormin mining tenement. The offshore prospecting area extends 1km out to sea from the low-water mark.

A study by the University of Stellenbosch in South Africa titled “The Geelwal Karoo heavy mineral deposit: a modern day beach placer” concluded that “ the implementation of replenishment mining of this active beach appears to be a realistic possibility. It is, after all, regularly practised by off-shore diamond mining in several favourable localities. This alternative could considerably increase the reserves and sustain mining for an extended period.”

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MRC has engaged with the scientists who undertook the initial study and work to assess the timeframes around and extent of the potential replenishment. This work will commence in the third quarter of 2013 and the Company is optimistic that its studies will show that replenishment from, or exploitation of this area could at least double the expected Life of Mine of Tormin.

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 primary 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.

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. 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. Provision has also been made to produce various magnetic concentrates for further processing these through dry plants should those project economics allow.

For further information please contact:

Andrew Lashbrooke Chief Executive alashbrooke@mrc-res.co.za