MINERAL COMMODITIES LTD — Capital/Financing Update 2020

Jan 29, 2020

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ASX RELEASE
ASX: MRC 30 January 2020
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MRC RECEIVES REGISTERED PROSPECTING RIGHTS AT TORMIN

• Granted Prospecting Rights registered at Tormin Mineral Sands Operation

• Prospecting Right 10261 (Northern Beaches) – 23.5km (398 hectares) of highly prospective “placer deposit style” northern beaches adjoining existing Tormin beach deposits, and

• Prospecting Right 10262 (Inland Strand) – 12km (1741 hectares) of heavy mineral sands prospectivity along Inland Strand areas directly behind existing mining operations.

• Drilling contractor mobilised for 7000m resource definition drilling program, commencing immediately

Mineral Commodities Ltd (“MRC” or “the Company”) and its empowerment partners, Blue Bantry Investments 255 (Pty) Ltd, are pleased to announce that two Prospecting Right applications (WC 30/5/1/1/2/10261PR and WC 30/5/1/1/2/10262PR) submitted by the Company’s 50% owned South African subsidiary, Mineral Sands Resources (Pty) Ltd (“MSR”), have been granted, executed and registered with the South African Department of Mineral Resources and Energy (“DMRE”). The permits will allow MSR to commence prospecting activities, including a resource definition drilling program at the beaches directly north of, and on the Inland Strand areas respectively adjoining and adjacent to the existing Tormin mining operations, in the Western Cape province of South Africa (see Figure 1).

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Figure 1 – Tenements under application and granted in South Africa

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

ABN 39 008 478 653 info@mncom.com.au www.mncom.com.au

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The Company will mobilise drilling contractors with requisite Reverse Circulation (“RC”) and sonic drilling equipment to complete a 7000m resource definition program to define the multiple palaeo mineralised strandline occurrences. Drilling activities will commence in early February 2020, targeting a JORC Code (2012) compliant Indicated Resource at the Northern Beaches and a Measured and Indicated Resource over the Inland Strand areas. The Company is confident that it may be in a position to release an Inferred Resource on the Inland Strand area in March, based on historical drilling and data captured by previous exploration companies.

Executive Chairman Mark Caruso said, “ Tormin hosts one of the highest grade mineral sands resources in the world. The recent granting and registration of the Northern Beaches and Inland Strand prospecting areas gives the Company a 41.4km semi-continuous inland geological setting which continues to build a significant exploration landholding tenure in a world-class mineral sands geological setting. We have a high degree of confidence in the historical data and current test results that underpin the Company’s confidence in its operating future through successful exploration. ”

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Northern Beaches - additional ~23k.5m of replenishable
placer style mineralisation adjoining existing mining rights
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Figure 2 - Northern Beaches area

Prospecting Right 10261 (“Northern Beaches”) – the Northern Beaches incorporate ten beaches directly north and adjoining the current beach mining area at Tormin. The Northern Beaches prospecting areas incorporate a semi-continuous tenement approximately 23km in length, covering an area of 398 hectares of beach sands prospective for zircon, rutile, ilmenite, garnet, leucoxene and magnetite. Like the current beach mining area at Tormin, the Northern Beaches share similar placer style characteristics of deposition and replenishment. The heavy minerals (“HM”) 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. This replenishment occurs as a result of the naturally highly dynamic nature of sediment transport processes on beaches in this area. The beaches have previously been drilled by Trans Hex for diamonds and heavy mineral sands, and the occurrence of heavy mineral sands has been confirmed.

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These marine strandlines are characterised by an extremely high concentration of HM in distinct layers. The total HM (“THM”) content has been reported by Trans Hex in an internal non-JORC Code (2012) compliant resource report (“Tormin Feasibility Study Report dated June 1992”) to be between 20% and 34% with a weighted average of 22% THM for 1.79Mt. These grades have not been verified and are reported as Historical Foreign Estimates with Table 1 exemption under Listing Rule 5.10 “referring to a historical or foreign estimate of mineralisation for areas adjacent to or near to the entity’s mining tenements”.

The Company intends to immediately commence a sonic drilling program designed on a 50m x 25m grid in order to try and verify the above historical foreign estimates and delineate a JORC Code (2012) compliant Indicated Resource. To do this, MRC is targeting a total beach area of 5.7 kilometres strike length within the prospecting tenure. Section of highly prospective HMS “Inland Strand’ adjacent to the

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existing mining operations on the Company owned farmland
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Figure 3 – Inland Strand

Prospecting Right 10262 (“Inland Strand”) – the Inland Strand incorporates an area approximately 12km in length covering 1741 hectares of coastal area immediately adjacent to the existing mining operations on the Company-owned farm Geelwal Karoo 262. The inland palaeo strandline has been identified by geophysics and supplemented by historical sampling. There is also substantial data reflecting the presence of multiple palaeo strandlines running parallel to the coastline and within the current Inland Strand prospecting tenure. This deposit has undergone historical exploration since the 1930s (Haughton 1931, Toerien & Groeneveld 1957, Abele 1989, Swart 1990, Barnes 1998), with exploration drilling work undertaken by Trans Hex between 1989 and 1991.

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 a number of trenches in 1999-2000 (Figure 4).

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Figure 4: Historical inland bulk sampling by Trans Hex indicating the heavy mineral strandline

The Company anticipates commencing a Resource Definition Program as early as February 2020, utilising RC drilling on a 200m by 25m grid across the known areas of mineralisation. The Company anticipates delineating and releasing a JORC Code (2012) compliant Measured and Indicated Resource at the completion of the drilling program.

In addition to the recently granted Prospecting Rights, the Company have under application additional significant prospecting areas to the North and South of the recently granted Tormin Inland Strand Prospecting Right.

The additional prospecting tenure under application includes large tracts of semicontinuous identified Inland Strand occurrences to the South of the Tormin Inland Strand Prospecting Permit, known as the De Punt Prospecting Area, covering an area of approximately 13.4km in length covering approximately 4,495 hectares. The area to the north of the current Tormin Inland Strand Prospecting Permit, known as Klipvley Karoo Kop, covers an area approximately 16km in length and covering approximately 3,970 hectares.

The Company cumulatively holds a continuous inland prospecting tenure granted, or under application, of approximately 41.4km in length and covering approximately 6,634 hectares. This is in addition to the current granted Tormin Mining Right area and the Northern Beaches prospecting tenure.

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Section 102 Expanded Mining Right Application

The receipt of the prospecting rights is a significant outcome that gives the Company the opportunity to conduct targeted exploration over a strategic land package that is the cornerstone of the Company’s phased expansion strategy at Tormin.

A large percentage of areas covered under both PR10261 and PR10262 is subject to a Section 102 Expanded Mining Right application (“S102 Application”). Once granted, executed and registered, the expanded mining rights provided under S102 Application will permit MRC to conduct expanded mining and processing activities at both the Northern Beaches and Inland Strand areas. The Company intends to adopt a phased development program with an initial increase in primary beach concentration capacity followed by the construction of a Mineral Separation Plant that will produce final products from the Company’s concentrates. This will enable the Company to continue to deliver economic benefits to its South African partners, the local community and shareholders.

The Company, through its Environmental Assessment Practitioner (“EAP”), the internationally recognised environmental services firm SRK, submitted its application for a S102 Expanded Mining Right and Environmental Authorisation (“EA”) in April 2018 which was granted in June 2019. As is often the case with applications of this nature, the EA was subsequently appealed. The Company, in conjunction with SRK, submitted the requisite responses to the appealing authority, the Department of Environmental Affairs (“DEA”), within a week of receiving the appeal notification. The Company’s EAP advised that the Company’s submission was comprehensive and addressed all issues raised in the current appeal process.

The decision regarding the Appeal was due to be handed down in September 2019.

The Company has been advised that the matter will be dealt with in the next quarter.

END

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

For inquiries, please contact:

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

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About Mineral Commodities Ltd

Mineral Commodities Ltd (ASX: MRC) is a global mining and development company with a primary focus on the development of high-grade mineral deposits within the industrial and battery minerals 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 October 2019, the Company completed the acquisition of Skaland Graphite AS, the owner of the world’s highest-grade operating flake graphite mine and one of the only producers in Europe. The planned development of the Munglinup Graphite Project, located in Western Australia, builds on the Skaland acquisition and is a further step toward an integrated, downstream value-adding strategy which aims to capitalise on the fastgrowing demand for sustainably manufactured lithium-ion batteries.

Cautionary Statement

The Company has been mining the adjoining beaches since 2012 and has acquired a significant amount of historical drilling and geological data from previous exploration undertaken by other companies.

Reference to, or statements of, historical exploration results included in this announcement have not been reported in accordance with the JORC Code 2012. A Competent Person has not done sufficient work to disclose the exploration results in accordance with the JORC Code 2012. Accordingly it is possible that following further evaluation and/or exploration work that the confidence in the prior reported exploration results may be lower when reported in accordance with the JORC Code 2012.

Competent Person Statement

The information in this Stock Exchange Announcement that relates to Exploration, together with any related assessment and interpretation, has been approved for release by Mr Bahman Rashidi, who is a member of the Australian Institute of Mining and Metallurgy (AusIMM) and the Australian Institute of Geoscientists (AIG). Mr Rashidi is Exploration Manager and a full-time employee of the Company. Mr Rashidi has sufficient experience which is relevant to the style of mineralisation and types of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person in accordance with the JORC Code 2012.

Mr Rashidi consents to the inclusion of the information contained in this ASX release in the form and context in which it appears.

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(JORC Code, 2012 Edition – Table 1 report)

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections)

Criteria		Commentary
Sampling		The resource results are from a hand auger drilling campaign in 1989: 236
techniques		holes totalling 402m and Reverse Circulation drilling in 1990: 302 holes
		totalling 905m by Trans Hex
		Composite samples were collected from each hole
Drilling		Hand auger and RC drilling
techniques		All holes were drilled vertically
Drill sample		Unknown
recovery
Logging		Each hole was logged by a geologist on 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 only
		Marine gravels and contact with basement bedrock recorded as the maximum
		depth of mineralisation
Sub-sampling		Composite sampling over the mineralised zone
techniques
and sample
preparation
Quality of		All sample analyses were undertaken by MINTEK RSA
assay data		Microscopic point counting (plate count) for heavy minerals and x-ray for
and		zirconium
laboratory		Scanning electron microprobe and x-ray for zirconium
tests		Mintek had a 0.1% zirconium detection limit
Verification of		No independent verification of grades was undertaken outside the work by
sampling and		Mintek
assaying
Location of		Hole collars were determined from 1:1000 scale maps and 1:2000 scale aerial
data points		photos
Data spacing		Variable spacing was used depending on access
and		Some auger holes were twinned with RC holes
distribution		Average grid density on beaches was 300m x 15m
Orientation of		Vertical drilling across the strike of the strandline and beaches were sufficient
data in		to intersect mineralisation
relation to
geological
structure
Sample		Samples were geologically logged and send to Mintek
security		No samples were kept for future reference

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Criteria		Commentary
Audits or		The exploration data and samples were reviewed by Professor Krige
review		(Witwatersrand University) in 1990 and Kapp, Prestedge and Retief
		(Stellenbosch) in 1991
		The original resource estimation was done in 1991 by RS Ficking with an
		updated resource estimation and review in 1992 by PD Danchin, A van der
		Westhuizen and M Wissink
		Verification drilling on the historical exploration results are planned

Section 2 Reporting of Exploration Results

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

Criteria		Commentary
Mineral tenement		The area has a granted prospecting right in the name of Mineral Sands
and land tenure		Resources (Pty) Ltd, the right has not yet been notarial
status		executed/registered
Exploration done		Trans Hex 1989-1991, as reported in this release
by other parties		The general area under application 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)
Geology		The heavy mineral sand deposits occur in a current active beach
		environment (e.g. 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 Neogene deposits are host to the commercially important
		diamondiferous and HMS raised beach terraces
Drill hole		As no historical exploration results have been verified it has not been
Information		released
Data aggregation		No data aggregation were done as no certifiable JORC compliant
methods		mineralisation grade results are available
Relationship		The strandline mineralisation is sub-horizon and the drilling intercepts
between		are vertical
mineralization		The thickness of intercept reported is, therefore, the real thickness
widths and		No mineralisation thickness has been reported until verification drilling
intercept lengths		has been done
Diagrams		None included in this release

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Criteria		Commentary
Balanced		No reporting of historical exploration results will be made until
reporting		verification drilling has been done
Other substantive		No other exploration data is currently available
exploration data
Further work		A comprehensive drilling program is planned and details in this regard
		will be announced to the market in the near future, upon execution of
		the granted right

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