MINERAL COMMODITIES LTD — Capital/Financing Update 2019

Sep 1, 2019

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ASX RELEASE
ASX: MRC 2 September 2019
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MRC & UNIVERSITY OF ADELAIDE SUCCESSFULLY DEVELOP PROPRIETARY METHOD TO PRODUCE GRAPHENE & RELATED PRODUCTS

• MRC’s Munglinup natural flake graphite product characterised as highly crystalline with minimal defects

• Proprietary method identified to produce few-layer graphene from Munglinup Graphite Product at high yields (>95%) and reduced reagent requirements

• Proprietary method developed for producing functionalised graphene and related materials

• Initial application testing shows graphene and functionalised graphene suitable for conductive inks, super-capacitors and corrosion resistant paints and coatings

• Testwork confirms chemical intercalation and expansion characteristics of Munglinup Graphite Product using microwave expansion

• Program for next stage under development

Mineral Commodities Ltd (ASX: MRC) (“the Company” or “MRC”) is pleased to announce the successful completion of an initial Research and Development Program into production of graphene and related products by the University of Adelaide (“UoA”). The research was conducted using graphite product from MRC’s Munglinup Flake Graphite Project (“the product”) in southern Western Australia.

The UoA research program focused on:

• Characterisation of the product

• Producing graphene from the product using three methods developed by UoA

• Assessment of producing expanded graphite from the product

• Production of functionalised graphene and related materials from the product

• Testing of graphene and functionalised graphene produced in specific end-use applications

The research program was conducted under a Research Agreement between MRC and UoA signed in April 2018[1] . The Product samples used in this program were sourced from testwork (announced to the ASX on 8 February 2018[2] and 22 October 2018[3] ) that utilised the Munglinup metallurgical master composites.

• 1- MRC Graphene/Expandable Graphite Test Work Commences – 18/4/2019

• 2- Munglinup Metallurgical Testwork – 8/2/2018

3- Positive Munglinup Graphite Optimisation Testwork Results – 22/10/2018

T: +61 8 6253 1100 PO Box 235 WELSHPOOL DC WA 6986

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Munglinup Graphite Product Evaluation

The product was characterised by UoA’s team using a range of specialised methods including X-ray powder diffraction (“XRD”), Raman Spectroscopy, Thermo-Gravimetric Analysis (“TGA”) Scanning Electron Microscopy (“SEM”) and Energy Dispersive Spectroscopy (“EDAX”). The aim was to evaluate the properties and feasibility of Munglinup Graphite Product for production of graphene and value-added graphite materials.

XRD analysis shows the product to be highly crystalline with an interlayer spacing of 0.334nm – typical of high-quality graphite. Rietveld analysis showed the product to be 100% of the thermodynamically stable hexagonal structure, whereas most natural graphites are a mix of hexagonal and rhombohedral structures. This has positive implications for the use of the product in lithium ion battery applications.

Raman Spectroscopy results showed that the product has low defects and is highly crystalline. Raman Spectroscopy is an important technique used in characterising carbon materials. The Raman spectra of the product is shown in Figure 1.

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Figure 1 – Raman Spectra for MRC Graphite Product

Typical Raman spectra show three characteristics peaks:

• D Peak (indicates disorder and/or defect structure)

• G Peak (measures the graphitic component of the material)

• 2D Peak (represents the quality of the structure)

The ratio of the intensity of the D peak and the G peak (ID/IG) is an indicator of the degree of disorder in the crystal structures of carbon. The sharp 2D peak is typical for natural graphite.

The ID/IG ratio of 0.04 highlights that Munglinup graphite has low defects and is highly crystalline. This is further confirmed by an interlayer spacing of 0.334nm, close to the theoretical value of 0.335nm.

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Evaluation of Produced Graphene

UoA trialled a range of conditions using two proprietary methods to produce graphene from the product. The first and most suitable method produced graphene with a high conversion of graphite to graphene (>95% yield), indicating the potential to be developed into a scalable process for the industrial production of graphene. This method also significantly reduces reagents consumption to produce graphene relative to current methods.

Raman spectra of the graphene produced by this method presented in Figure 2, show a broad 2D peak at 2680cm[-1] , with a wavelength shift of ~40cm from 2720cm[-1] for graphite (Figure 1). The shape and shift of the 2D peak are indicative of pristine graphene and similar to other high-quality graphene products on the market. This is distinct from the sharp 2D peak evident for natural graphite – see Figure 2.

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Figure 2 – Raman spectra for graphene produced from MRC graphite product

Photographs of graphene material produced from the products by the UoA team are presented in Figure 3. Transmission electron microscope (“TEM”) images show typical sheet morphologies for graphene with single to few layers – Figure 4. The darker shades indicate overlapping of sheets and/or folding and crinkling of individual sheets.

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Figure 3 - photographs of graphene produced from MRC product

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Figure 4 - TEM images of graphene sheets produced from Munglinup product

UoA prepared a 45mm diameter graphene film membrane from the graphene powder. The sheet resistance of the membrane was measured to be a low 12.7 ohm/square, highlighting the excellent conductivity of the material.

A second, proprietary method developed during the research program produced graphenelike material with very similar properties to the graphene produced using the first method. This new proprietary method also demonstrated the potential for simpler processing and will be considered for scale-up.

Table 1 shows that the defects ratios (ID/IG) for the graphene produced by the two successful methods are very similar in crystal size (La) and crystallite height (Lc) but smaller than graphite.

Table 1 – C:O ratios and structural parameters for the various products

Sample	C/O Ratio	ID/IG ratio	Lc (nm)	La (nm)
MRC Graphite	12.8	0.04	28.4	46.7
MRC Graphene – Method 1	25.9	0.11	11.0	24.5
MRC Graphene – Method 2	N/A	0.13	11.3	25.2

Figure 5 shows the similarities of the two methods’ resistance to combustion – method 2 has a slightly higher decomposition temperature.

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Figure 5 – Thermo-gravimetric analysis (TGA) of graphene produced from Munglinup product by Method 1 (blue) and Method 2 (black)

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Expandable Graphite

The UoA team investigated the chemical intercalation and expansion characteristics of the product as a function of flake size using microwave expansion rather than direct thermal shock. The aim was twofold: to evaluate performance and feasibility of Munglinup product for production of expanded graphite, a very valuable graphite material; and to demonstrate the capability of a microwave expansion process.

The outcome of this investigation showed that graphite intercalated compound (“GIC”) produced on chemical treatment of the product expanded rapidly with short microwave irradiation times of 3-20 seconds. The study highlighted areas for optimisation of the intercalation reagents and the thermal treatment of the GIC to produce expanded graphite. A photograph of prepared expanded graphite from the product during the program is shown in Figure 6.

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Figure 6 – Photograph of prepared expanded graphite from MRC product

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The results, Figure 7, showed that the peak expansion for the bulk product was greater with microwave expansion than the previous results with direct thermal expansion at Dorfner ANZAPLAN[4] . In addition, the smaller (<210 micron product, and the tighter ranged 53-210 micron fraction) exhibited expansion factors above 200cm[3] /g - which is the oft-quoted target of Chinese expandable graphite. However, the coarser flake (>210 micron) exhibited lower expansion volumes with microwave expansion than in previous work using thermal expansion. This process is scalable, with a low-energy cost and is more sustainable.

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Figure 7 – Expansion volumes for MRC graphite with microwave expansion (3-20sec)

4- Munglinup Expandable Graphite Testwork Results Positive - 08/05/2018

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Typical SEM images of the expanded graphite are shown in Figure 8 for the bulk (as received) graphite and the coarse fractions. The typical ‘worms’ of expanded graphite are clearly visible and the results indicate that the graphite is rapidly expanded.

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Figure 8 - Low resolution (left) and high resolution (right) SEM images of expanded MRC graphite a) MRC bulk product treated with UoA method; b) MRC bulk graphite treated with MRC method; c) Coarse (>210 microns) flake treated with UoA method; d) Coarse Flake (>210 microns) treated with MRC method

The expandability work at UoA reinforces the view that the product has very good expansion characteristics. In particular, the high average expansion volumes achieved for the bulk sample indicate the potential to maximise the use of the product in producing expandable or expanded graphite, rather than relying on the coarse fractions.

Oxygen Functionalised Graphene

The UoA team investigated a range of proprietary methods to produce oxygen functionalised graphene and associated products from MRC Munglinup graphite product. The aim was to

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develop a process to make a new material that could replace graphene oxide (“GO”), a product produced by oxidation of concentrated acid and oxidants using harsh conditions.

Oxygen functionalised graphene retains the structure of pristine graphene and its properties but introduces oxygen groups (C-O, C=O, O-C=O), which increases the hydrophilicity (ability to be dispersed in water and polymers). These functional groups allow this material to be used in the production of a broad range of composite materials, including conductive inks, polymer composites, coatings and anti-corrosion paints that require dosages between 1% to 50% graphene. In contrast to functionalised graphene, it is difficult to achieve higher dosages of pristine graphene in these composites due to graphene’s inherent high hydrophobicity and tendency to aggregate that prevents uniform dispersions in the matrix. Consequently, functionalised graphene is an attractive material for water-based anti-corrosion paints and graphene polymer filaments for 3D printing. These are US$100M to multi-billion dollar markets according to IDTechEx.com data.

The oxygen functional groups also improve charge storage and metal-ion storage capacity for energy storage applications, which is forecast at ~US$100 Billion according to IDTechEx.com data.

MRC graphene was successfully processed to produce oxygen functionalised graphene, increasing the oxygen content and decreasing the carbon to oxygen ratio (C:O) from 25.9 to 16.2 – see Table 2. The increase in oxygen content improves the hydrophilicity of the material and improves the light absorbance of the oxygen functionalised graphene relative to that of graphene – Figure 9. This confirms that the oxygen functionalised graphene is more readily dispersed.

Table 2 – Properties of Precursors and Oxygen Functionalised Products

Sample/Process Method	O 1s (Atomic %)	C 1s (Atomic %)	C:O
MRC Graphene	3.70	96.0	25.9
Oxygen Functionalised Graphene	5.70	92.5	16.2
MRC Graphite	7.17	91.91	12.8
Oxygen Functionalised Graphite	23.8	64.2	2.7

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Figure 9 – Absorption spectra of MRC graphene (black) and oxygen functionalised graphene (red)

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A visual assessment of the impact of oxygen functionalisation is shown in Figure 10. The oxygen functionalised graphene clearly has improved dispersion characteristics whereas the dispersion of the graphene in water is very limited.

The improvement in dispersion characteristics on oxygen functionalisation of graphene is a positive benefit for applications such as protective paints, coatings and composites.

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Figure 10 – The dispersability of MRC graphene (left) and oxygen functionalised graphene (right) after 60 minutes.

Oxygen Functionalised Graphite and Expanded Graphite

The study was performed with the aim to demonstrate the capability of this green proprietary functionalisation process to produce oxygen functionalised graphite and expanded graphite. This can potentially replace current technologies, which are mainly based on non-sustainable production methods including the use of harsh acids and oxidants.

Outcomes of this study showed the process significantly increased the oxygen content to 23.8 atomic percent, and reduced the C:O ratio to 2.7 (Table 2) i.e. within the range for graphene oxide produced by the Hummers’ method. However, the Hummers’ method requires significant amounts of concentrated acid, oxidants and water for washing and produces a material with high levels of defects (with an ID/IG ratio of one or more). In contrast, the new method produces a material with a low ID/IG ratio of 0.28 using a simple and environmentally friendly process.

Whilst the oxygen functionalised graphite has a low C:O ratio, it is not graphite oxide as it lacks the distinctive, large (001) peak for graphite oxide at ~11° in the XRD spectra – Figure 11. In addition, Figure 11 shows that the material is 100% hexagonal structured which is the thermodynamically stable form of the graphite.

Intriguingly, the material has the high oxygen content of graphite oxide and/or graphene oxide but low defects, exhibits thermodynamically stable ABAB stacking, and has small crystallite height (Lc of 5.64nm) and size (La of 12.5nm).

Planning is underway to further assess the oxygen functionalised graphite with respect to applications and optimisation of the process method.

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Figure 11 – XRD pattern of oxygen functionalised graphite

The oxygen functionalisation routes developed by UoA have the potential to significantly reduce reagent consumptions and environmental impacts for the production of functionalised graphite/graphene materials and to deliver scalable processes with reduced technical risks. These products and process routes will be further investigated in the next stage of the program.

Applications Testing

Graphene and related products have a broad range of potential applications including energy storage, electronics, bio-sensors, conductive inks, additives in composites (e.g. in tyres, concrete), anti-corrosive paints and more.

The UoA team has conducted a series of tests to assess the suitability of graphene and functionalised graphene produced from the Munglinup Product. This initial application testing program has focused on proof-of-concept level assessment of the use of these materials in the following applications:

• Conductive inks and paints

• Super-capacitors

• Corrosion-protective paints and coatings

UoA successfully formulated and produced conductive inks from MRC graphene using a proprietary method with an unoptimised surface resistivity of prepared films of less than 1,000 ohm per square – Figure 12. These films, which could vary from transparent conductive to thick conductive films produced by graphene inks, have potential applications in energy storage, sensors, solar cells, wearable electronics, electromagnetic shielding and more.

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Figure 12 – Production of graphene conductive films from MRC graphene and potential applications

The UoA team also made a supercapacitor using graphene oxide produced from the Munglinup Graphite Product – Figure 13. The rectangular shape of the cyclic voltammetry confirms the ability of the material to operate at high scan rates without distortion in performance. The fabricated material also delivers a high specific capacitance of 122 F/g at a scan rate of 5 mVs-1. This value is much higher than the reported values for activated carbon (50 to 70 F/g) as the main active material in commercial supercapacitors. There is potential to further improve the performance and to test oxygen functionalised material produced by the new processing routes discussed above.

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Figure 13 – Production of graphene conductive films by UoA and potential applications, a) supercapacitor produced; b) cyclic voltammetry curves at different scan rates; c) calculated specific capacitances at different scan rates

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UoA developed a paint product using MRC graphene produced from the Munglinup Graphite Product to evaluate the corrosion resistance and diffusion barrier resistance on copper plate. The electrochemical testing showed lower anodic current densities in comparison to control samples (bare copper and commercial paint), confirming that the graphene oxide paint increased resistance to copper dissolution. The diffusion barrier results, Figure 14, showed total protection against corrosion over 24 hours against highly corrosive acid.

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Figure 14 – Testing of corrosion resistance of graphene composite coatings on copper plate to a drop of 1M HCl acid under humid conditions over time. Untreated copper plate (LHS), coated with commercial paint (MID) and coated with graphene composites (RHS)

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Figure 15 - Photographs of demonstration of production of graphene filaments for 3 d printing using MRC graphene produced from the Munglinup Graphite Product

The team also produced graphene filaments for 3D printing using MRC graphene – Figure 15.

The application testing program reinforces the potential to use graphene and related products produced from the Munglinup Graphite Product in a range of potential products. Further application testing is planned in the next stage, in particular for the oxygen functionalised products.

Conclusions

MRC is very pleased with the progress made by the UoA team on assessing potential processing routes for producing graphene and related materials from the Munglinup Graphite Product in the past twelve months, with the objective of identifying a scalable process that addresses the production and environmental constraints associated with current methods, and targets appropriate end-uses.

MRC’s Executive Chairman Mark Caruso said, “ We are focused on developing a robust vertically integrated downstream graphite business from the world class Munglinup Project. The combination of the excellent graphene research and development expertise at the University of Adelaide, combined with our strategic objectives for the project and downstream developments, provides the foundation for integrating graphene and related products into our product suite from Munglinup. The Company has an ongoing commitment and has established and funded research programs through its own financial resources and the recently announced CRC-P 7

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Federal Grant with its Partners CSIRO and Doral Fused Materials. We look forward to continuing our relationship with the University to further evaluate the products and process routes identified in this work to develop a scalable, fit-for-purpose process which will produce graphene-related products to meet end-customer requirements.”

For further information, please contact:

INVESTORS & MEDIA CORPORATE Peter Fox Peter Torre Investor Relations and Corporate Company Secretary Development T: +61 8 6253 1100 T: +61 8 6253 1100 investor@mncom.com.au

T: +61 8 6253 1100 peter@torrecorporate.com.au

About Mineral Commodities Ltd:

Mineral Commodities Ltd (ASX: MRC) is a global exploration and mining company with a primary focus on the development of high-grade mineral deposits within the industrial minerals, base metals, bulk commodities and precious metals sectors.

The Company is a leading producer of zircon, rutile, garnet and ilmenite concentrates through its Tormin Mineral Sands Operation located on the Western Cape of South Africa. In April 2019, the Company entered into an agreement to acquire 100% of Skaland Graphite AS, which operates the Trælen Graphite Mine and Skaland Processing Facility in Norway. Skaland is the world’s highest-grade operating flake graphite mine with mill feed grade averaging around 28%C. Skaland is the largest flake graphite producer in Europe and fourth largest producer globally outside of China. The planned development of the Munglinup Graphite Project, located near Esperance in Western Australia, is consistent with the Company’s strategy to capitalise on the fast-growing sustainable renewable energy storage and electric vehicle revolution as well as downstream vertically integrated value-adding.

Cautionary Statement

This report may contain 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 a number of factors could cause actual results or expectations to differ materially from the results expressed or implied in the forward-looking statements.

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