MINERAL COMMODITIES LTD

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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: [email protected] Web: www.mncom.com.au

30 July 2010

Australian Stock Exchange Company Announcements Office

QUARTERLY ACTIVITIES REPORT

FOR THE PERIOD ENDED 30 JUNE 2010

SUMMARY

Discussion with parties interested in acquiring an interest in the Tormin Mineral Sands Project ceased and decision to proceed with development has been made.
Perth based MSP Engineering Pty Ltd engaged to prepare a preliminary conceptual design of a beach concentrator for the Tormin Project.
Funding initiatives for the development of the Tormin Mineral Sands Project including discussions with off-take partners commenced.
Meetings held with the Department of Mineral Resources to progress discussions on both the Xolobeni and Tormin Projects.
Final Decision from the Director-General on the Mining Right at Xolobeni still pending.

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 exported as a combined concentrate.

The salient results of the K’Enyuka study were released in previous quarterly reports and are shown again in Table 1.0 below. 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.

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 Concentrate grade Concentrate transportation CAPEX(1) OPEX OPEX	Mtpa tpa % zircon % rutile US$ US$ per t ore US$ per t concentrate	Mining DOP pump in excavator None 5 stage pumping (5km) 4 stage spirals, LIMS, WHIMS 1.60 25 – 40,000 ~75 ~10 Truck to Cape Town. Shipped $21M $8.57 $588	Mining DOP pump on excavator None 2 stage pumping (1km) 4 stage spirals, LIMS, WHIMS, wet tabling 1.60 40-60,000 ~80 ~10 Truck to Cape Town. Shipped $21M $9.57 $417	Mining suction pump on floating pontoon Rougher & Scavenger spirals on beach Truck haul to De Punt (15km) 2 stage spirals, LIMS, WHIMS, wet tabling 1.42 16-50,000 ~80 ~10 Truck to Cape Town. Shipped $9.0M $6.48 $283

(1) Capital Expenditure – includes owner’s costs

(2) Operating costs – excludes depreciation and amortisation

Both the optimised and beach processing study showed favorable economics.

The Company furthered discussions with potential investors and its existing Black Empowerment Partner to determine the economics of an upfront divestment of this Project versus the risk/reward to the Company of its development.

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Those discussions did not result in any offers, which were acceptable by the Board of MRC. As such, a decision to proceed to develop the project has been made as this presents as the best alternative.

Perth based MSP Engineering Pty Ltd were engaged to prepare a preliminary conceptual design of a beach concentrator for the Tormin Project.

The Company also initiated discussions to assess various funding options, which include discussions with potential off-take partners.

Meetings were held with the DMR to ensure all stakeholders are fully consulted and informed as development progresses.

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 was 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.

The appeal was scheduled to be heard between 8 and 10 February, however the Company was informed that the hearing was deferred due to the committee that was appointed by the Mining and Minerals Board to oversee this matter, not receiving all necessary documentation by the Department of Mineral Resources.

The Company is aware that the task team established to advise the Mineral Resources Minister In South Africa on the Mining Right has submitted its report and recommendations to the DirectorGeneral without a public hearing as was initially anticipated.

The Department of Mineral Resources has advised the Company in meetings that consultation with various government departments is required prior to handing down a final decision. This process is expected to take approximately six months.

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CORPORATE

Investment in Africa Uranium Limited

The Company holds an approximate 12% interest in Africa Uranium Limited.

Cape Lambert Resources Limited subsequently obtained a 10% beneficial interest in AUL and in late 2009 undertook two drilling programmes on AUL’s Hoasib Uranium Project. In its ASX release on 20 January 2010, Cape Lambert Resources Limited advised that the results from the programmes were promising and in line with expectations.

In March 2010, Oklo Uranium Limited announced that it had entered into a transaction with Africa Uranium Limited to acquire its 70% interest in the Hoasib Project for an estimated value of approximately $20 million.

On 31 May 2010, Oklo Uranium Limited announced that following due diligence, Oklo formed the view that whilst the project remained prospective for uranium mineralisation, it was unable to support the key commercial terms of the acquisition and consequently terminated the transaction with Africa Uranium Limited. Oklo noted that it was in discussions with Africa Uranium Limited on the basis that it recognises the potential in the project and these discussions may or may not result in a new agreement with Africa Uranium Limited.

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.

Petro Ventures provided an update to its shareholders in May 2010. Petro advised that on 30 April it engaged First Energy Capital LLP to assist with a US$30m capital raising as well as development and formalisation of a schedule leading to listing on the Alternative Investment market in London.

In addition Petro requested First Energy to create a secondary liquidity event by way of a pre-IPO offer to acquire the Australian investors interests. The board of Petro is seeking to obtain a fair and reasonable offer to those Petro investors who wish to dispose of their holdings prior to admission to AIM.

The Company awaits further progress on these matters.

Investment in Allied Gold Limited (ASX listed: ALD)

MRC currently holds approximately 8.5 million shares of ALD’s issued fully paid ordinary shares.

Allied Gold has commenced the re-development of the Gold Ridge Project in the Solomon Islands following its successful takeover of Australian Solomons Gold in the last quarter of 2009. Allied has also appointed consultants to proceed with the expansion of its oxide processing facilities on Simberi Island PNG.

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The market value of MRC’s shareholding at 30 June 2010 was $3.1 million (previous Quarter reported $3 million). During the quarter, 1 million shares were divested to assist with working capital funding.

Cash and Marketable Securities

At 30 June 2010, MRC had $0.4 million in cash with a further $3.2 million in marketable securities. In aggregate this represents 2.5 cents per MRC share.

Securities on Issue

Issued securities at quarter-end comprise;

143,393,021 fully paid ordinary shares listed on the ASX. 57,357,208 listed options exercisable at $0.20 expiring 31 December 2012.

Yours faithfully

Mark Caruso Director

For enquiries in connection with this release please contact:

Mineral Commodities Limited +61 8 9353 4890 telephone +61 8 9353 4894 facsimile e-mail: [email protected] 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.

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

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Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.

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