MINERAL COMMODITIES LTD — Interim / Quarterly Report 2014

Sep 14, 2014

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Mineral Commodities Ltd

ABN 39 008 478 653

Half-Year Financial Report 30 June 2014

As part of the transition and to provide greater consistency with reporting by other international mining companies listed on the ASX, the Company has adopted United States (US$) dollars as its presentation currency. The financial statements are translated from the individual subsidiaries functional currencies into a presentation currency of United States dollars as described in Note 1.

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 December 2013 and any public announcements made by Mineral Commodities Ltd during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act.

Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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Directors’ Report

The Directors present their report on the Consolidated Entity, consisting of Mineral Commodities Ltd and the entities it controlled at the end of or during the half-year ended 30 June 2014.

Directors

The following persons were Directors of the Company in office during the half-year, and up to the date of this report:

Mark Victor Caruso Executive Chairman Joseph Anthony Caruso Non-Executive Director Peter Patrick Torre Non-Executive Director / Company Secretary James Gerald Leahy Independent Non-Executive Director Guy Redvers Walker Independent Non-Executive Director

Results

The profit of the consolidated entity after income tax attributable to members of the parent entity was US $1,505,059 (2013 loss US $649,157).

Review of Operations

Tormin Mineral Sands Project

The Tormin Mineral Sands Project (Tormin) was successfully commissioned in January 2014 and has completed its first 6 months of operations. Whilst the first few months reported some issues in ramping up, the operating performance for the period indicates the key inputs that support the project economics remain sound. In addition the confidence in the Resource and its replenishability continues to grow, based on Run of Mine (ROM) operating performance and reconciliation to date.

Tormin has been under construction and in operation for a total of 12 months and 6 months respectively. The Company is extremely proud of its safety record that by period end amounted to in excess of 535,000 man hours without a lost time injury (LTI).

From the commencement of mining operations in December 2013, to the end of the period in excess of 400,000 tonnes of ROM ore had been transported to the Secondary Concentration Plant (SCP). 99% of the mined area on the beach had been replenished over the same timeframe through normal tidal movements. The Company continues its work on the replenishment studies to determine the dynamics of the grade and quantum timing of the mineral sands redeposit.

Mining costs for the period remain in accordance with Budget.

The Company achieved nameplate capacity in the second half of the period of 4,000tpm non-magnetic zircon/rutile concentrate, producing 20,387 tonnes of non-magnetic zircon/rutile concentrate, 45,227 tonnes of ilmenite concentrate and 103,480 tonnes of garnet concentrate.

Processing costs remain below budget due to the higher grade and increased throughput through the SCP.

The Company continued with its plant optimisation studies with a view to extracting an additional 20-25% of nameplate processing throughput from the existing SCP.

Demand for the Company’s non-magnetic concentrate remains strong in the Chinese Market due to the ceramic grade quality of the finished Zircon product. Average Zircon and Rutile prices remain stable and in line with current market reconnaissance which suggest some upward price enhancement moving forward for the balance of calendar 2014.

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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All non-magnetic concentrate was shipped to the Companys offtake partner Wogen Pacific during the period and immediately subsequent to period end.

In line with SCP processing reaching nameplate throughput and capacity during the period and commencing the optimisation initiatives towards the end of the period, the Company remains confident of production and future sales forecasts of at least 4,000 tonnes per month of non-magnetic concentrate.

During the period, the Company negotiated a garnet Offtake Agreement (Agreement) with GMA Garnet Group of Australia, the world’s largest producer and global distributor of industrial garnet abrasives. The Agreement was announced subsequent to period end on 15 July 2014.

Garnet is used in abrasive blasting and waterjet cutting applications, and is a by-product of the zircon/rutile/ilmenite production process at Tormin. For every tonne of zircon concentrate, approximately five tonnes of garnet concentrate is produced. No additional mining or processing costs are incurred in the production of garnet.

The Tormin garnet concentrate will be sold FOB from the Saldanha Bay Port north of Cape Town and re-processed into industrial abrasives by GMA.

Full details of the Agreement were released to the market in the release of 15 July 2014 with further information in respect to the Resource and mining method in the Company’s quarterly report for the period ended 30 June 2014.

Negotiations in respect of the ilmenite produced at Tormin continued during the period. By the end of the period, 18,838 tonnes of ilmenite concentrate had been stockpiled.

The Company has previously reported that a prospecting right for the offshore area immediately adjacent to Tormin was awarded towards the end of 2012. The offshore prospecting area covers an area of 12km[2] and extends 1km out to sea from the low-water mark and covers the full length of the existing 12km Tormin tenement.

The established geology of the region confirms that the source of the Tormin beach deposit is a Heavy Mineral-rich offshore zone and that the dynamic coastline serves to replenish the beaches by transporting sediment from deeper waters.

As previously noted, to date 99% of the area mined has replenished through normal tidal movements. The Company continues its work on the replenishment studies to determine the dynamics of the grade and quantum timing of the mineral sands redeposit.

The Company has received a number of proposals to drill and sample the offshore area and re-define the existing beach resource. The program, which will be subject to final selection of drilling techniques contractors to ensure integrity of sampling collection and prevailing weather will be accelerated upon sourcing a working capital facility. The programme has not yet commenced. This will be pursued in the second half of the year.

Based on the Company’s confidence in the extent of this resource, an application was made in the period to extend the prospecting area from 1km seawards of the low water mark to 10km offshore. This will increase the prospecting area and potential resource area available to the Company from 12km[2] to 120km[2] .

The Company has proceeded with the regulatory approval process in relation to the offshore prospecting right application and remains confident that the application will be approved in the September quarter.

Xolobeni Mineral Sands Project

The Company holds the prospecting rights to four of the five blocks in the Xolobeni Mineral Sands Project (Xolobeni). The Company has previously advised that, due to objections received to the prospecting right application to the remaining block, the Kwanyana block, the Department of Mineral Resources (DMR) instructed the Company to undertake additional public consultation in relation to the project. The public consultation took place in early 2013 and feedback from the meetings was submitted to the DMR in the second half of that year.

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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Based on a review of stakeholder engagement reports submitted by the Company, the DMR instructed the Company on 22 January 2014 to undertake a further round of consultation with a number of political stakeholders. These included the local royal family, the Eastern Cape Cabinet, the district municipality, the local municipality and the local chamber of commerce. This consultation was undertaken and completed by the end of the period and a full report submitted to the DMR.

While the level of consultation undertaken to date has been extensive, the Company has undertaken the work as a display of good faith and its commitment to develop and operate Xolobeni transparently and sustainably in the interests of all stakeholders. All the necessary documents were completed and submitted to the DMR during the period and, given this and the substantial amount of support for the project evident through the consultation, the Company remains optimistic that the DMR will award a new prospecting right over the Kwanyana block in the next half enabling the Company to do the final work necessary to submit a mining right application for the entire Xolobeni project as soon thereafter as possible.

In the interim, work has commenced on preparation for the various baseline studies that are required as part of the prospecting works programme and in preparation for an application for a mining right for Xolobeni. This includes the appointment of a specialist water expert who has already provided initial feedback from site reviews and engagement with the Department of Water Affairs.

The second phase of the water studies will be undertaken in the next half. The focus of this phase is to confirm the level of water abstraction that will be possible from the local rivers and confirm water storage options. This work will form the basis of the Company’s water use license application which will commence as soon as possible after the results are available.

CORPORATE

Having commenced production and shipment of product, various financial institutions have indicated a willingness to provide standby working capital facilities.

The Company sought to establish a facility of up to $4m to assist with short term working capital requirements resulting from lower than forecast sales in the first quarter and to allow the Company to proceed with its planned de-bottlenecking and exploration replenishment drilling and study programs without delay. Major shareholders indicated their willingness to support and provide a finance facility on commercially arms-length terms.

The Company concluded a working capital facility of up to $4m with major shareholders and announced the transaction on 30 May 2014. The Company has drawn down on $3 million of this facility and continues discussions with traditional financiers to secure a working capital facility to replace the exiting one.

Events Subsequent to Balance Date

Other than disclosed elsewhere in this report, there have been no other events subsequent to balance date.

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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Auditor’s Independence Declaration

A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on page 16

Signed in accordance with a resolution of the Directors.

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Mark Caruso

Executive Chairman Perth, Western Australia 12 September 2014

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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Consolidated Statement of Profit or Loss and other Comprehensive Income

for the half year ended 30 June 2014

Note Revenues From continuing operations Site road construction and maintenance Other income Mining and Processing costs Royalties Administration expenses Employees and consultants remuneration Depreciation and amortisation Unrealised foreign exchange gain Exploration expenditure impaired Profit / (Loss) for the half-year from operations Finance expenses Finance income Impairment of available for sale asset Profit/(Loss) before income tax Tax expense Profit/(Loss) after income tax Other comprehensive income items that will or maybe reclassified to profit or loss Changes in fair value of available for sale financial assets Exchange differences on translation of foreign operations Other comprehensive loss for year net of tax Total comprehensive Profit/(Loss) for the period Profit /(Loss)Loss is attributable to: Owners of Mineral Commodities Ltd Non-controlling interest Total comprehensive (loss) for the half-year is attributable to Owners of Mineral Commodities Ltd Non-Controlling interest Earnings/(Loss) per share from continuing operations attributable to the ordinary equity holders of the Company: Basic and Diluted Profit / (Loss) per share From continuing operations attributable to the ordinary shareholders of the Company (cents per share) Total basic profit / (loss) loss per share for profit attributable to the ordinary equity holders of the Company: (cents per share)	30 June 2014 US$ 30 June 2013 US $ 11,111,512 - 1,569,409 - 4,152
	12,680,921 4,152
	(6,791,401) - (582,822) - (1,556,737) (516,285) (437,526) (108,895) (1,666,600) (14,665) 89,869 - (30,178) -
	1,705,526 (635,693)
	(207,142) - 6,675 152,112 - (165,576)
	1,505,059 (649,157) - -
	1,505,059 (649,157)
	- (31,700) (254,087) 587,138
	(254,087) 555,438
	1,250,972 (93,719)
	1,505,059 (649,157) - -
	1,505,059 (649,157) 1,250,972 (93,719) - (18,710)
	1,250,972 (112,429)
	cents cents 0.37 (0.20)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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Consolidated Statement of Financial Position as at 30 June 2014

Note CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Available for sale financial assets 3 Other current assets Total Current Assets NON-CURRENT ASSETS Receivables Property, plant and equipment Exploration expenditure 4 Mine properties 5 Total Non-current Assets Total Assets CURRENT LIABILITIES Trade and other payables 6 Short term borrowings 7 Total Current Liabilities Total Liabilities NET ASSETS EQUITY Contributed equity 8 Reserves 9 Accumulated losses Parent entity interest Non controlling interest TOTAL EQUITY	30 Jun 14 31 Dec 13 US$ US$ 569,737 1,503,316 2,746,941 1,167,705 1,749,369 771,760 100,110 94,495 32,258 10,287
	5,198,415 3,547,563
	729,935 737,047 5,887,558 5,030,704 10,968,333 11,008,541 15,757,464 13,606,814
	33,343,290 30,383,106
	38,541,705 33,930,669
	3,803,966 2,522,315 8,104,537 6,026,124
	11,908,503 8,548,439
	11,908,503 8,548,439
	26,633,202 25,382,230
	63,440,327 63,440,327 (8,107,459) (7,853,276) (28,813,305) (30,318,460)
	26,519,563 25,268,591 113,639 113,639
	26,633,202 25,382,230

The above Consolidated Statement of Financial position should be read in conjunction with the accompanying notes.

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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Consolidated Statement of Cash Flows for the half-year ended 30 June 2014

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Exploration and development Interest received Payments to suppliers and employees Interest paid Site road construction and maintenance Sundry income Net cash inflow/(outflow) from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payment for plant and equipment Loan to other entities Net cash (outflow)/inflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from the issue of shares and options Short term loan received Repayment of short term borrowings Net cash inflow from financing activities Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at the beginning of the half-year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the half-year	Jun 14 Jun 13 US$ US$ 9,125,215 - (53,199) (3,152,188) 6,675 152,112 (7,887,052) (908,466) (207,142) - 1,569,409 - - 4,152
	2,553,906 (3,904,390)
	(5,088,685) (57,271) - (314,111)
	(5,088,685) (371,382)
	- 4,359,974 3,000,000 - (1,368,495) -
	1,631,505 4,359,974
	(903,274) 84,202 1,503,316 8,080,008 (30,305) (859,379)
	569,737 7,304,831

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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Consolidated Statement of Changes in Equity

Balance at 1 January 2014 Profit for the half year Exchange differences on translation of foreign currencies Total comprehensive income for the half year Transactions with owners in their capacity as owners Contributions of equity net of transaction costs Balance at 30 June 2014 Balance at 1 January 2013 Loss for the half year Change in fair value of available for sale financial assets Exchange differences on translation of foreign currencies Total comprehensive income for the half year Transactions with owners in their capacity as owners Contributions of equity net of transaction costs Balance at 30 June 2013	Contributed equity Accumulated Losses Reserves Total Non- Controlling interest Total Equity US$ US$ US$ US$ US$ US$ 63,440,327 (30,318,364) (7,853,372) 25,268,591 113,639 25,382,230 1,505,059 - 1,505,059 - 1,505,059 - - (254,087) (254,087) - (254,087)
	- 1,505,059 (254,087) 1,250,972 - 1,250,972 - - - - - -
	63,440,327 (28,813,305) (8,107,459) 26,519,563 113,639 26,633,202
	Contributed equity Accumulated Losses Reserves Total Non- Controlling interest Total Equity US$ US$ US$ US$ US$ US$ 52,948,638 (28,406,336) (2,880,023) 21,662,279 137,596 21,799,875 - (649,157) - (649,157) - (649,157) - - (31,700) (31,700) - (31,700) - - 587,138 587,138 (18,710) 568,428
	- (649,157) 555,438 (93,719) (18,710) (112,429) 4,359,974 - - 4,359,974 - 4,359,974
	57,308,612 (29,055,493) (2,324,585) 25,928,534 118,886 26,047,420

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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Consolidated Financial Statements for the half-year ended 30 June 2014

1. Basis of Preparation

These general purpose financial statements for the interim half-year reporting period ended 30 June 2014 have been prepared in accordance with Australian Accounting Standard 134 "Interim Financial Reporting" and the Corporations Act 2001.

It is recommended that these financial statements be read in conjunction with the annual financial statements for the year ended 31 December 2013 and any public announcements made by Mineral Commodities Ltd during the half year in accordance with the continuous disclosure requirements arising under the Corporations Act 2001.

These interim financial statements do not include all the notes of the type normally included in annual financial statements.

With the exception of the presentation currency the accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

(a) Presentation currency

The Group has previously reported its consolidated results in Australian dollars. As part of the transition to a mining company and to provide greater consistency with reporting by other international mining companies listed on the ASX, as of 1 January 2014 the Company has adopted United States (US$) dollars as its presentation currency. The financial statements are translated from the individual subsidiaries functional currencies (Australian Dollars and South African Rand) into a presentation currency of United States Dollars. The exchange rates applied during the reporting period were as follows:

Australian dollars (A$) to United States dollars (US$)

			30	31	30
			Jun	Dec	Jun
			2014	2013	2013
Average exchange rates
used			0.920	0.968	1.015
Period	end	closing
exchange	rates	used	0.940	0.887	0.930

The basis for presenting the results and financial position from functional currency of Australian dollars into a presentation currency of United States dollars were as follows:

• The Australian denominated MRC Group statement of financial position for the period ending 30 June 2014 was translated at the closing exchange rate of 0.94.

• income and expenses for the statement of comprehensive income (including comparatives) were translated at average daily exchange rates from 1 January to 30 June 2014.

• movements in equity and reserves for the comprehensive income and for the financial position were translated at average daily exchange rates per quarter from 1 January to 30 June 2014.

• assets and liabilities for each statement of financial position presented have been translated at the closing rate at the date of that statement of financial position.

• results for the cash flow statement were translated at average daily exchange rates from 1 January to 30 June 2014.

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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• exchange differences on translating income, expenses and movements in equity and reserves at quarterly exchange rates and assets and liabilities at closing exchange rates from functional currency to presentation currency are taken to the foreign currency translation reserve in the equity section and under other comprehensive income/(expense) in the statement of comprehensive income.

• Comparatives for 30 June 2013 and 31 December 2013 have been re-translated.

2. Segment Information

Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors which makes strategic decisions.

There is no goodwill attaching to any of the segments. There has been no impact on the measurement of the assets and liabilities reported for each segment.

There are two operating segments for South Africa. The first is the operating project Tormin Mineral Sands held in Minerals Sands Resources Ltd and located on the West coast. The other is the exploration and development at Xolobeni Mineral Sands held in Transworld Energy and Minerals located on the East coast.

In Australia the Group operates in two segments, investing in the securities of unrelated entities and interest on the deposit of surplus funds. The other segment is the corporate overhead associated with the management and administration of the company’s projects and corporate administration.

Half- Year 2014 Revenue from operations Revenue from sale of product Interest earned from unrelated entities Other income Group’s revenue per consolidated statement of profit or loss and other comprehensive income Depreciation and amortisation Segment results Profit /(Loss) before income tax Total segment assets Total segment liabilities	Africa Australia Totals
	Tormin Xolobeni Investing Corporate
	US$ US$ US$ US$ US$ 11,111,512 11,111,512 4,231 2,444 6,675 1,569,409 1,569,409
	12,685,152 2,444 12,687,596 1,652,748 305 - 13,547 1,666,600 2,545,796 (123,903) 2,444 (919,278) 1,505,059
	30,913,578 6,945,923 100,110 582,094 38,541,705
	6,029,522 802,731 - 5,076,250 11,908,503

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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Half- Year 2013 Revenue from operations Interest earned from unrelated entities Other income Total segment revenue Depreciation and amortisation Segment results Profit /(Loss) before income tax Total segment assets Total segment liabilities	Africa Australia Totals
	Tormin Xolobeni Investing Corporate
	US$ US$ US$ US$ US$ 3,938 438 - 147,736 152,112 1,108 - - 3,044 4,152
	5,046 438 - 150,780 156,264 3,628 403 - 10,634 14,665 (20,075) (2,177) (165,576) (461,329) (649,157)
	8,392,427 7,358,208 310,620 7,368,978 23,430,233
	503,619 55,957 - 321,492 881,068

3. Available for Sale Financial Assets

Listed equity securities Australian Listed shares Other listed shares Impairment of Listed shares Total listed equity securities Unlisted equity securities Balance at 1 January 2014 Impairment Balance at 30 June 2014 Total available for sale securities	30 Jun 14 31 Dec 13 US$ US$ 329,000 311,500 192,708 182,457 (421,598) (399,172)
	100,110 94,785
	163,113 163,113 (163,113) (163,113)
	- -
	100,110 94,785

Available for sale financial assets comprise investments in the ordinary share capital of various entities. There are no fixed returns or fixed maturity dates attached to these investments. Listed shares held for resale have been adjusted to market value at balance date. The investment in unlisted shares has been fully impaired and charged to the statement of profit or loss and other comprehensive income in prior periods.

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

• Level 2:

• inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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2014 Available for sale financial assets Non-Current Receivables - Secured deposit¹ - Advance² Total 2013 Available for sale financial assets Non-Current Receivables - Secured deposit¹ - Advance² Total	Level 1 Level 2 Level 3 Total US$ US$ US$ US$ 100,110 - - 100,110 257,790 257,790 472,144 472,144
	357,900 - 472,144 830,044
	Level 1 Level 2 Level 3 Total 94,495 - - 94,495 260,303 260,303 476,744 476,744
	354,798 - 476,744 831,542

¹ Includes a secured deposit of $257,790 with First Rand Bank held as security for a performance guarantee issued by the Bank in favour of the South African Department of Minerals and Energy in respect of Mineral Sands Resources (Pty) Ltd obligations under the Tormin Mining right.

² An amount of Rand 5 million has been advanced to the BEE partner Blue Bantry.

4 Exploration Expenditure

4 Exploration Expenditure	4 Exploration Expenditure
Exploration expenditure – costs carried forward in respect of areas of interest in: Exploration and evaluation phases 5 Mine Properties Capitalised mine properties 6 Trade and other payables Trade Creditors Other payables Trade and other payables 7 Short term borrowings Short term loans (a) Amounts due under equipment acquisition agreements (b)		30 Jun 14 31 Dec 13 US$ US$ 10,968,333 11,008,541
		15,757,464 13,606,814
		2,624,839 1,785,422 1,179,127 736,893
		3,803,966 2,522,315
		4,770,952 2,074,349 3,333,585 3,951,775
		8,104,537 6,026,124

Short term loans

(a) A pre finance and marketing facility of US$2.0 million was drawn down in September 2013. This facility is repayable over a twelve month period in quarterly instalments and with an interest rate of 10%. Repayments commenced in June 2014. Two further loans of US$1.5 million were drawn down in June 2014 and are repayable in the first quarter of 2015 and have an interest rate of 13%.

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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• (b) The Group has entered into two Master rental agreements to acquire mobile mining equipment. Under the terms of these agreements there is an option to purchase which the Group intends to exercise. Interest is charged at 13.5%.

8 Issued capital

Ordinary Shares Fully Paid Balance at beginning of period Share placement Proceeds of Rights Issue Conversion of listed options cent options Costs of Capital raising Balance at the end of the period	30 June 2014 31 December 2013 30 June 2014 31 December 2013 Number of Shares US$ US$ 404,941,935 274,008,385 63,440,327 52,948,645 - 49,937,000 - 4,418,367 - 80,988,228 - 6,399,584 - 8,322 - 1,746 - (328,015)
	404,941,935 404,941,935 63,440,327 63,440,327

Options

The following unlisted options over fully paid ordinary shares expire on 31 December 2015:

Category Unlisted Options Unlisted Options 9 Reserves 30 June 2014 Balance at 1 January 2014 Exchange differences on translation of foreign operations Balance at 30 June 2014 30 June 2013 Balance at 1 January 2013 Exchange differences on translation of foreign operations Changes in the fair value of available for sale financial assets Balance at 30 June 2013	No of Options Exercise Price Expiry Date Cents per Share 10,000,000 20 31 December 2015 1,000,000 35 31 December 2015 Currency Translation Reserve Financial Asset Revaluation Reserve General Reserve Listed Options Reserve Total Reserves (9,300,905) (232,908) 1,363,393 317,048 (7,853,372) (254,087) (254,087) (9,554,992) (232,908) 1,363,393 317,048 (8,107,459)
	(5,689,228) - 2,437,582 371,623 (2,880,023) 587,138 587,138 (31,700) (31,700)
	(5,102,090) (31,700) 2,437,582 371,623 (2,324,585)

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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10. Contingent liabilities

Bank Guarantees

The Company has provided bank guarantees with a total value of $257,790 (31 December 2013 - $260,303) to the Department of Minerals & Energy South Africa as security on tenements.

The Directors are not aware of any other contingent liabilities at the date of this report.

11. Related party transactions

There were no transactions with directors or director related entities during the financial period other than:-

• a) The payment of directors’ remuneration.

• b) Minesite Construction Services Pty Ltd (MSCS), a company associated with Mr Mark Caruso and Mr Joseph Caruso has provided office space to Mineral Commodities Ltd (MRC) during the period 1 January – 30 June 2014. The amount paid by MRC was US$28,200 (2013 US$28,200). This is considered to be an armslength commercial rent. There is no formal sub lease agreement in place.

• c) MSCS has provided secretarial staff to the executive chairman pursuant to an executive service agreement during the period 1 January – 30 June 2014. The cost was US$24,252 (2013 US$24,252). These have been reimbursed on an arms length basis at normal commercial rates.

• d) MSCS has provided technical staff during the Period from 1 January – 30 June 2014 to the Company’s subsidiary which operates the Tormin Mineral Sands project at a total cost of US$61,669 these have been reimbursed on an arms-length basis at normal commercial rates. Subsequent to this report a further US$36,872 has been paid.

• e) Under the terms of a loan facility agreement and as approved by shareholders Regional Management Pty Ltd, a company associated with Mr Mark Caruso advanced US$1,500,000 to MRC in June 2014. This loan carries interest at the rate of 13%.

12. Events occurring after the reporting period

Other than disclosed elsewhere in this report, there have been no other events subsequent to balance date.

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Mineral Commodities Ltd Half-Year Financial Report – 30 June 2014

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Directors’ Declaration

Declaration by Directors

The Directors of the Company declare that:

1. The consolidated financial statements, comprising the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Cash Flow, Consolidated Statement of Changes in Equity and accompanying notes:

2. (a) Comply with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and

3. (b) Give a true and fair view of the consolidated entity's financial position as at 30 June 2014 and of its performance for the half-year ended on that date.

4. In the directors' opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and behalf of the Directors by:

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Mark Caruso Executive Chairman Perth, Western Australia 12 September 2014

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Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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DECLARATION OF INDEPENDENCE BY BRAD MCVEIGH TO THE DIRECTORS OF MINERAL COMMODITIES LTD

As lead auditor for the review of Mineral Commodities Ltd for the half-year ended 30 June 2014, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

2. No contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Mineral Commodities Ltd and the entities it controlled during the period.

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Brad McVeigh

Director

BDO Audit (WA) Pty Ltd

Perth, 12[th] September 2014

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of Mineral Commodities Ltd

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Mineral Commodities Ltd, which comprises the consolidated statement of financial position as at 30 June 2014, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, notes comprising a statement of accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Mineral Commodities Ltd, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Mineral Commodities Ltd, would be in the same terms if given to the directors as at the time of this auditor’s review report.

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Mineral Commodities Ltd is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001

BDO Audit (WA) Pty Ltd

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Brad McVeigh Director

Perth, 12 September 2014

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