MINERAL COMMODITIES LTD — Interim / Quarterly Report 2009

Oct 7, 2009

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Mineral Commodities Ltd ACN 008 478 653 ABN 39 008 478 653

Unit 15, Level 1, 51-53 Kewdale Road Welshpool, Western Australia 6106 PO Box 235, Welshpool DC 6986 Telephone: 61 8 9353 4890 Facsimile: 61 8 9353 4894 Email: info@mncom.com.au Web: www.mncom.com.au

8[th] October 2009 Australian Stock Exchange Company Announcements Office

QUARTERLY ACTIVITIES REPORT

FOR THE PERIOD ENDED 30 SEPTEMBER 2009

SUMMARY

During the Quarter activities were centred around the completion of the Tormin Feasibility Study. No work was undertaken at Xolobeni and future activities await an outcome from the appeal process. The Company elected during the quarter to not proceed to stage 2 funding of Africa Uranium’s exploration activities in Africa.

The Company undertook a non-renounceable entitlement issue, which, with the placement of the shortfall options, was completed immediately subsequent to the Quarter end.

TORMIN MINERAL SANDS PROJECT (SOUTH AFRICA)

Background

The Tormin Mineral Sands Project is located on the west coast of South Africa, approximately 400km north of Cape Town. The main minerals of interest are zircon and rutile which are contained in a high grade beach placer deposit north of the Oliphants River outfall. Previous studies have demonstrated that the Tormin Project can produce an enriched non-magnetic saleable concentrate containing predominately zircon and rutile. The base case production model consists of an annual production of 30,000 to 40,000 tonnes of concentrates grading up to 80% zircon and 10% rutile.

As announced on the 24[th] of June 2009, the Company commissioned K’Enyuka, a South African engineering firm, to undertake a Definitive Feasibility Study for the Project. The results of the study have been incorporated in a financial model developed on behalf of the Company by MSP Engineering Pty Ltd, a Perth based resource consultancy firm specialising in industrial minerals.

The Base Case investigated by K’Enyuka is based on hydraulic mining of the beach deposits and hydraulically transferring the sand from the beach to a stockpile ahead of a primary gravity circuit. Mining operations are to be conducted on a day shift basis only and surplus mining and stockpile capacity has been incorporated to accommodate for tidal and adverse weather events.

The primary spiral plant is designed for a nominal throughput capacity of 1.6 Mtpa and comprises a primary spiral circuit for removal of silica and light heavies followed by a wet high intensity magnetic separation (WHIMS) circuit for removal of magnetic minerals including ilmenite and garnet which are subsequently hydraulically transferred back to the beach for deposition as tailings with the silica fraction.

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The resultant non-magnetic concentrates, rich in zircon and rutile, are then bagged and exported as a combined concentrate.

The salient results of the K’Enyuka study are shown in Table 1.0. During the course of the study there was a number of value adding opportunities identified which have been modeled at desktop level by MSP as part of trade off and optimisation studies.

The trade off and optimisation studies considered the following two primary opportunities. The Project also has substantial garnet resources. The plant design allowed for the extraction of the +200 micron garnet but this aspect was not included in the operating costs (“OPEX”) and the operating synergies arising.

1.0 Kenyuka Base Case Optimised Study

This study considered locating the primary concentrate plant closer to mining activities and modifying the WHIMS circuit and incorporating a tables circuit for the final concentrate stream to improve overall recoveries and yield associated with the zircon and rutile fractions.

The results from this desktop study are also provided in Table 1.0.

2.0 Beach Process Option

In addition to the K’Enyuka study, the Company commissioned MSP to prepare a desk top study to investigate modularised beach mining and primary concentration units feeding semi concentrated concentrates to a centralised secondary processing facility located some 15km from the beach operation.

The results of the Beach Processing Options are also presented in the Table 1.0.

Both the optimised and beach processing study showed favorable economics and will assist the company in considering various development options moving forward for the project, including possible Joint Venture and sale of equity.

Table 1.0 – Project Development Option

Parameter	Unit	Study Base Case	Optimised Base Case	Beach Processing Option
Mining method Primary beach upgrade Ore transport method Secondary processing Plant throughput Concentrate throughput	Mtpa tpa	Mining DOP pump in excavator None 5 stage pumping (5km) 4 stage spirals, LIMS, WHIMS 1.60 30 – 40,000	Mining DOP pump on excavator None 2 stage pumping (1km) 4 stage spirals, LIMS, WHIMS, wet tabling 1.60 40-50,000	Mining suction pump on floating pontoon Rougher & Scavenger spirals on beach Truck haul to De Pump (15km) 2 stage spirals, LIMS, WHIMS, wet tabling 1.42 40-50,000

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Concentrate grade Concentrate transportation CAPEX(1) OPEX OPEX	% zircon % rutile US$ US$ per t ore US$ per t concentrate	~75 ~10 Truck to Cape Town. Shipped $21M $8.35 $304	~80 ~10 Truck to Cape Town. Shipped $21M $7.01 $204	~80 ~10 Truck to Cape Town. Shipped $7.4M $4.89 $144

(1) Capital Expenditure

XOLOBENI PROJECT (SOUTH AFRICA)

Background

The Xolobeni Project is located in the Eastern Cape Province of South Africa approximately 300km north of East London and 200km south of Durban.

The Xolobeni Mineral Resource is 346 million tonnes of 5.0% heavy mineral, with 65% of this resource in the Measured category (Table 1).

Area	Status	Tonnes (million)	% HM	% Ilmenite
Sikombe	Measured	85	5.5	3.1
Kwanyana	Measured	139	5.8	3.1
Mnyameni	Indicated	104	4.1	2.2
Mpahlane	Inferred	18	2.3	1.6
TOTAL		346	5.0	2.7

Table 1: Xolobeni Mineral Resource, 2003 at 1% Heavy Mineral Cut off Grade

The Xolobeni Project is regarded as one of the largest undeveloped mineral sands resources in the world containing in excess of 9,000,000 tonnes of ilmenite .

Mining Right Application

As noted in previous ASX announcements, the Company is awaiting the outcome of an appeal lodged with the Minister of the Department of Minerals and Energy (“DME”) against the grant of the Mining Right over the Kwanyana block. This appeal was lodged in September 2008.

AFRICA URANIUM AGREEMENT

As announced on 21[st] September 2009, the Company elected to not proceed to stage 2 funding of Africa Uranium’s (“AUL”) exploration activities in Africa. MRC will be allotted such shares that will equate to a further 10% interest in AUL.

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Africa Uranium has advised that it has secured funding for its ongoing exploration on favourable terms and MRC will monitor its investment in AUL with interest.

SIERRA LEONE DIAMOND OPERATIONS UPDATE

Equipment recovered from Sierra Leone is currently in South Africa awaiting sale.

CORPORATE

Investment in Petro Ventures International Limited

The Company holds a 9.31% interest in Petro Ventures International Limited (“Petro Ventures”). Petro Ventures has interests in two project areas which are located in offshore Romania and onshore Hungary. Petro Ventures’ working interest in the projects is 20% and 10% respectively.

Petro Ventures and its partners continue to develop these projects. Based on results to date, the Romanian project is likely to be commercial. The project in Hungary is in the early stages of exploration.

Investment in Allied Gold Limited (ASX listed: ALD)

MRC currently holds approximately 11.5 million shares of ALD’s issued fully paid ordinary shares.

The market value of MRC’s shareholding at 30[th] September 2009 was $5.3 million (previous Quarter reported $5.6 million).

Cash and Marketable Securities

At 30[th] September 2009, MRC had $0.4 million in cash with a further $5.4 million in marketable securities. In aggregate this represents 4.0 cents per MRC share.

During the quarter, the Company completed a non-renounceable entitlement issue. Total funds raised with the completion of the placement of the shortfall to the offer immediately following quarter end were $286,786.

Securities on Issue

Issued securities at quarter-end comprise;

143,393,021 fully paid ordinary shares listed on the ASX.

39,999,062 listed options exercisable at $0.20 expiring 31 December 2012. A further 17,358,146 listed options were issued immediately subsequent to quarter end bringing the total listed options on issue to 57,357,208.

1,750,000 unlisted options exercisable at $0.30 and 500,000 unlisted options exercisable at $0.40 expired on 30 September 2009.

Yours faithfully

Greg Steemson

Managing Director

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For enquiries in connection with this release please contact:

Mineral Commodities Limited +61 8 9353 4890 telephone +61 8 9353 4894 facsimile e-mail: info@mineralcommodities.com.au

Competent Persons

The information in this report that relates to Mineral Resources and Exploration Results for the Tormin Mineral Sands Project is based on information compiled by Greg Steemson who is a Fellow of the Australian Institute of Geoscientists. Greg Steemson has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Greg Steemson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Mineral Resources and Exploration Results of the Xolobeni Project is based on information compiled by Daniel Guibal (SRK Consulting) a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.