MINERAL COMMODITIES LTD — Interim / Quarterly Report 2020

Aug 23, 2020

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2020 Half Year Results

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Cautionary Statements

This document has been prepared by Mineral Commodities Ltd (“MRC” or “the Company”) and comprises written materials/slides for a presentation concerning MRC. This is not a prospectus, disclosure document or offering document.

This document is for information purposes only and does not constitute or form part of any offer or invitation to acquire, sell or otherwise dispose of, or issue, or any solicitation of any offer to sell or otherwise dispose of, purchase or subscribe for, any securities, nor does it constitute investment advice, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.

Certain statements in this presentation are forward-looking statements. You can identify these statements by the fact that they use words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, “target”, “may”, “assume” and words of similar import. These forward-looking statements speak only as at the date of this presentation. These statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause the actual results, performances and achievements to differ materially from any expected future results, performance or achievements expressed or implied by such forwardlooking statements. No representation, warranty or assurance (express or implied) is given or made by MRC that the forward looking statements contained in this presentation are accurate, complete, reliable or adequate or that they will be achieved or prove to be correct. Except for any statutory liability which cannot be excluded, each of MRC, its related companies and the respective officers, employees and advisers expressly disclaim any responsibility for the accuracy or completeness of the forward looking statements and exclude all liability whatsoever (including negligence) for any director in direct loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission there from.

Subject to any continuing obligation under applicable laws or any relevant listing rules of the ASX, MRC disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements in these materials to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions or circumstances on which any statement is based.

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Nothing in these materials shall under any circumstances create an implication that there has been no change in the affairs of MRC since the date of this presentation.

The information, if any, in this presentation which relates to Exploration Results, Mineral Resources or Ore Reserves for Tormin is based on information compiled 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 and has over 22 years of exploration and mining experience in a variety of mineral deposits and styles. Mr Rashidi has sufficient experience which is relevant to the style of mineralisation and types of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code (2012)”). The information from Mr Bahman Rashidi was prepared under the JORC Code (2012). Mr Rashidi consents to inclusion in the presentation of the matters based on this information in the form and context in which it appears

The information, if any, in this presentation which relates to Mineral Resources for Munglinup is based on information compiled by Mr Chris De Vitry who is a member of the AusIMM and an independent consultant to the Company. Mr De Vitry is the Director and Principal Geologist of Manna Hill GeoConsulting Pty Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined by the JORC Code (2012). The information from Mr De Vitry was prepared under the JORC Code (2012). Mr De Vitry consents to inclusion in the presentation of the matters based on this information in the form and context in which it appears.

The information, if any, in this presentation which relates to the Ore Reserve for Munglinup is based on information compiled by Mr Daniel Hastings, who is a Member of the AusIMM. Mr Hastings is an employee of Hastings Bell Pty Ltd and a consultant to the Company. Mr Hastings has sufficient experience relevant to the type of deposit under consideration to qualify as a Competent

Person as defined by the JORC Code (2012). Mr Hastings consents to inclusion in the presentation of the matters based on this information in the form and context in which it appears.

The information, if any, in this presentation which relates to Exploration Results, Mineral Resources or Ore Reserves for Xolobeni is based on information compiled by Mr Allen Maynard, who is a member of the AIG, a corporate member of the AusIMM and independent consultant to the Company. Mr Maynard is the Director and Principal Geologist of Al Maynard & Associates Pty Ltd and has over 38 years of exploration and mining experience in a variety of mineral deposit styles. Mr Maynard 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, Exploration Targets, Mineral Resources and Ore Reserves (“JORC Code (2004)”). This information was prepared and first disclosed under the JORC Code (2004). It has not been updated to comply with the JORC Code (2012) on the basis that the information has not materially changed since it was last reported. Mr Maynard consents to inclusion in the presentation of the matters based on this information in the form and context in which it appears.

The information if any in this presentation which relates to Skaland Mineral Resources is based on information compiled by Mr Ché Osmond, who is a Chartered Geologist (CGeol) of Geological Society of London and Fellow of the Geological Society (FGS) a Recognised Professional Organisation (RPO). Mr Osmond is Technical Director of Wardell Armstrong International, and an independent consultant to the Company. Mr Osmond has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined by the JORC Code (2012). Mr Osmond consents to inclusion in the presentation of the matters based on this information in the form and context in which it appears.

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MINERAL COMMODITIES GLOBAL OVERVIEW

Skaland

Flake Graphite

Production – 10ktpa Flake Graphite Concentrate Skaland MRE: 1.78Mt @ 22% TGC

Tormin

Mineral Sands

Production - 2.6Mtpa Processing facility producing: garnet, ilmenite, zircon and rutile concentrates

Xolobeni

• Mineral Sands Development JORC Compliant Resource 346Mt @ 5% THM

Perth Corporate Headquarters

“ With the acquisition of Skaland, MRC now operates two production centres, Tormin and Skaland, while advancing development at Munglinup and progressing ongoing downstream graphite studies from Perth ”

Munglinup

Graphite Development

Ore Reserve (Probable) of 4.24Mt at 12.8% TGC supporting mine life of 14 years with anticipated production of ~52ktpa of >95% purity graphite concentrate. Mineralisation open in all directions

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GROUP SAFETY PERFORMANCE

HY20 HY19

0 0

Three month rolling Total Recordable Injury Frequency Rate at half year end

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1.9 million working hours since last Lost Time Injury incident across both operations

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FINANCIAL PERFORMANCE

Half Year Highlights

	30-June-20 30-June-19 Variance US$’000 US$’000 % Revenue 17,307 30,441 -43% Adjusted EBITDA 9,405 10,899 -14% Profit before income tax 6,760 8,451 -20% Profit for the period 5,619 6,987 -20% Diluted earnings per share 1.33 1.64 -19% Operating Cashflow -2,784 9,966 -128% Cash 5,739 15,782 -64% Net Assets 47,133 46,840 1%

The Revenue, EBITDA and NPBT results, in comparison to the prior halfyear, reflect the decrease of bulk ilmenite sales due to the global impact of the COVID-19 pandemic on customers.

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HALF YEAR FINANCIAL RESULTS

The Revenue and EBITDA reflect the decrease of bulk ilmenite sales due to the global impact of the COVID-19 pandemic on customers

	30-Jun-20	**30-Jun-19 **	Variance
	US$	US$	%
Revenue from continuingoperations
Sale ofproduct	15,919,917	29,694,202	-46%
Other revenue	1,386,791	746,443	86%
	17,306,708	30,440,645	-43%

HY20 REVENUE DOWN 43%

• The lower sales revenue was due to the decrease in higher value-non-mags sales in 2020 due to lower production and bulk ilmenite sales due to the global impact of the COVID-19 pandemic on customers. However, the Company continued to see demand for its Skaland graphite concentrate, which is sold directly into the European market, with sales remaining strong given the current global COVID-19 pandemic.

30-Jun-20 30-Jun-19 Variance US$ US$ %	30-Jun-20 30-Jun-19 Variance US$ US$ %	30-Jun-20 30-Jun-19 Variance US$ US$ %	Variance
Profit before income	6,760,369	8,450,973	-20%
Finance expense/(income)	165,684	-157,619	-205%
Depreciation and amortisation	2,479,155	2,605,388	-5%
Adjusted EBITDA	9,405,208	10,898,742	-14%

ADJUSTED EBITDA DOWN 14%

• Earnings before interest, tax, depreciation and amortisation (“EBITDA”) of $9.4m for the 2020 half-year was below the 2019 half-year EBITDA of $10.9m, a 14% decrease on the current half-year. The decrease in the EBITDA result, in comparison to the prior half-year, reflect the decrease of bulk ilmenite sales due to the global impact of the COVID-19 pandemic on customers, partially offset by a material positive garnet inventory adjustment during the half-year due to settlement of the stockpile areas.

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HALF YEAR FINANCIAL RESULTS

NPAT decrease partially offset by a material positive garnet inventory

30-Jun-20 30-Jun-19 Variance US$ US$ %	30-Jun-20 30-Jun-19 Variance US$ US$ %	30-Jun-20 30-Jun-19 Variance US$ US$ %	30-Jun-20 30-Jun-19 Variance US$ US$ %
Profit before income tax	6,760,369	8,450,973	-20%
Income tax expense	-710,334	-1,463,996	-51%
Profit after income tax	6,050,035	6,986,977	-13%
Loss from discontinued operations	-431,020	-	-100%
Profit for the period	5,619,015	6,987,977	-20%

NPAT DOWN 13%

• The profit before income tax expense (“NPBT”) was 20% lower than the prior year, reflecting the decrease of bulk ilmenite sales due to the global impact of the COVID19 pandemic on customers, , partially offset by a material positive garnet inventory adjustment during the half-year due to settlement of the stockpile areas.

• Profit after tax expense (“NPAT”) decreased 13% due to a decrease in the effective tax rate to 11% (2019: 17%). The reduction in the effective tax rate is due to the additional tax deduction for net foreign exchange losses on inter-company loans not recognised in the consolidated accounts, partially offset by permanent differences for credit losses, share based payments and donations.

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HALF YEAR FINANCIAL RESULTS

Summary of Tormin Unit Costs & Revenues

TORMIN UNIT COSTS & REVENUES

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Summary of Tormin Unit Costs & Revenues
$120
$91.20
$100 $111.81
$80
$60
$29.44
$40
Unit production cash Unit cost of goods Unit revenue per
$20 costs per tonne of sold per tonne of tonne of final
net final concentrate final concentrate concentrate sold
$0 produced (US$/dmt) sold ($/wmt) ($/wmt)
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• Unit production cash costs were US$91.20/t for 82,818 final concentrate tonnes produced, higher than the prior period’s US$83.75/t for 129,950 final concentrate tonnes produced. Higher unit costs were the direct result of 36.3% lower production in the current half-year, partially offset by production cash costs that were 30.7% below the prior period due to depreciation of the rand, lower diesel prices and an 18-day shutdown in South Africa due to the COVID-19 pandemic.

• Total unit cost of goods sold of US$29.44/t for the half-year for 110,467 final concentrate tonnes sold improved on the prior half-year’s US$90.05/t for 221,037 final concentrate tonnes sold. The improved performance was due to a material positive garnet inventory adjustment during the half-year due to settlement of the stockpile areas.

• Unit revenue per tonne of final concentrate sold for the half-year of US$111.81/t is below US$133.72/t for the previous half-year due to a 35.9% decrease in higher value nonmags sales in 2020, compared to the prior half-year.

Summary of Unit Costs & Revenues Full Year to Full Year to Variance 30-Jun-20 30-Jun-19 %	Summary of Unit Costs & Revenues Full Year to Full Year to Variance 30-Jun-20 30-Jun-19 %	Summary of Unit Costs & Revenues Full Year to Full Year to Variance 30-Jun-20 30-Jun-19 %	Summary of Unit Costs & Revenues Full Year to Full Year to Variance 30-Jun-20 30-Jun-19 %
Revenue to Cost of Goods Sold Ratio	3.80	1.49	155%

TORMIN REVENUE TO COST OF GOODS SOLD RATIO

• Revenue to Cost of Goods Sold Ratio for the half-year is 3.80 due to the material positive garnet inventory adjustment during the half-year. Without adjustment, the unit revenue to cost of goods sold ratio would have been 1.60, which is above the prior halfyear of 1.49.

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HALF YEAR FINANCIAL RESULTS

Unit production costs artificially high due to the plant shutdown and associated additional maintenance costs in January

Summary of Skaland Unit Costs & Revenues

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$580
$564.53
$560
$545.49
$540
$520
$506.51
$500 Unit production
cash costs per Unit cost of goods Unit revenue per
$480 tonneconcentrate of net final sold per tonnefinal concentrate of tonneconcentrate sold of final
produced (US$/dmt) sold ($/wmt) ($/wmt)
$460
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SKALAND UNIT COSTS & REVENUES

• Unit production costs during the half-year are artificially high due to the plant shutdown in January and additional maintenance costs associated with the January shutdown to focus on mine development and improve future ore supply. Unit costs in the June 2020 quarter (US$405.02) reflect a more sustaining cost pattern.

• Total unit cost of goods sold of US$506.51/t for the half-year for 6,511 final concentrate tonnes sold. Lower unit cost reflects significant sales of opening inventory stocks in the half year.

• Unit revenue per tonne of final concentrate sold for the half-year is US$545.49. The Company continued to see demand for its Skaland graphite concentrate, which is sold directly into the European market, with sales remaining strong given the current global COVID-19 pandemic.

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TORMIN - PRODUCTION & SALES

Production and Sales Performance HY2020

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MINING PRODUCTION TONNESTONNES MINED / PROCESSED CONCENTRATE TONNES PRODUCED [(1)] CONCENTRATE TONNES SOLD [(2)]
1,600,000 100,000 120,000
80,000 100,000
1,400,000 60,000 80,000
40,000 60,000
20,000 40,000
1,200,000
0 20,000
Garnet Ilmenite Zircon/Rutile
0
1,000,000 concentrate concentrate concentrate Zircon/Rutile Ilmenite Garnet
(net) (net)
concentrate concentrate concentrate
800,000 HEAVY MINERAL GRADE REVENUE BY CONCENTRATE
30.0%
$60
600,000
25.0%
$50
20.0%
$40
400,000
15.0% $30
200,000 10.0% $20
$10
5.0%
0 $0
Mining PBC Tonnes SCP/GSP 0.0% 2019 2020
Production Tonnes Garnet Ilmenite Zircon Non-mags Ilmenite Garnet
95,226
29,256 108,385 106,576 106,575
63,686 15,675
5,468 3,457
1,344,414 6,076 3,892 0
1,270,312
1,225,966
1,171,548
28.22%
20.76%
Millions
323,670 7.24%
232,231 2.68%
1.46% 1.31%
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(1) Dry Metric Tonnes

(2) Wet Metric Tonnes

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HY 2019

HY 2020

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- SKALAND PRODUCTION & SALES

Production and Sales Performance HY 2020

		Jun-20 Quarter Year to Date 30-Jun-20 8,086 13,744 7 7 28 28 94 94 89 89 2,354 4,010 Jun-20 Quarter 30-Jun-20 Year to Date Sales PSD % Sales PSD % 1,200 43% 2,464 38% 1,575 57% 4,047 62% 2,775 6,511	Jun-20 Quarter Year to Date 30-Jun-20 8,086 13,744 7 7 28 28 94 94 89 89 2,354 4,010 Jun-20 Quarter 30-Jun-20 Year to Date Sales PSD % Sales PSD % 1,200 43% 2,464 38% 1,575 57% 4,047 62% 2,775 6,511	Jun-20 Quarter Year to Date 30-Jun-20 8,086 13,744 7 7 28 28 94 94 89 89 2,354 4,010 Jun-20 Quarter 30-Jun-20 Year to Date Sales PSD % Sales PSD % 1,200 43% 2,464 38% 1,575 57% 4,047 62% 2,775 6,511	Jun-20 Quarter Year to Date 30-Jun-20 8,086 13,744 7 7 28 28 94 94 89 89 2,354 4,010 Jun-20 Quarter 30-Jun-20 Year to Date Sales PSD % Sales PSD % 1,200 43% 2,464 38% 1,575 57% 4,047 62% 2,775 6,511
	Processing	Jun-20 Quarter		Year to Date 30-Jun-20
	Ore Processed	8,086		13,744
	Throughput (tph)	7		7
	Ore Grade (%C)	28		28
	C Recovery (%)	94		94
	Concentrate Grade (%)	89		89
	Concentrate Produced (t)	2,354		4,010
	Product Category(wmt)	Jun-20 Quarter		30-Jun-20 Year to Date
		Sales PSD %		Sales PSD %
	Flake/Medium	1,200	43%	2,464	38%
	Fine-Medium/Powder	1,575	57%	4,047	62%
	Total	2,775		6,511

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TORMIN KEY EXPANSION PERMITTING
Section 102 - Northern Beaches Extension & Inland Strand
Northern Beaches - additional ~23k.5m of replenishable
-
placer deposits JORC 2.5Mt @ 23.5% THM [1]
Beach 10
Beach 7 Beach 5
Northern Beaches
Inland Strand – 5.6km of highly prospective HMS deposits
-
adjacent to the existing mining operations on Company JORC COMING SOON
owned farmland
Beach 10
Beach 7 Beach 5 Tormin Plant
Northern Beaches
Current Beaches
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1 – ASX Announcement: TORMIN NORTHERN BEACH HIGH GRADE MAIDEN RESOURCE- 19 May 20
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DOWNSTREAM
Vertically Integrated Anode Production in the fastest
growing Battery Manufacturing region globally
Skaland Operation
Anode Manufacturing Facility
Downstream study work on Anode
Manufacturing strategy to become a vertically
integrated producer of low carbon emission,
environmentally friendly, natural Battery Anode
Material progressing to PFS study stage. [–] [ RELEASE Q3 2020 ]
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Munglinup Deposit
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ZAR4.8 million Spent on local community and workplace

Included bursaries, scholarships, traineeships, internships, apprenticeships and adult basic education programs.

The Company also supports community-based enterprise and infrastructure support development, sponsoring of full-time teachers at local schools, distribution of food parcels with non-perishable foodstuffs delivered to elderly persons across the eight wards of the Matzikama municipal region and sponsorships in the form of attire, equipment and transport to local sporting clubs.

The Company has received approval for its future 2019-2023 Social Labour Plan from the Department of Mineral Resources and Energy, which underpins the Company’s future commitment to local enterprise development, education and infrastructure projects and initiatives. The total committed expenditure over five years is ZAR36.8 million.

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FOCUS FOR FUTURE SUCCESS

Significant positive catalysts ahead

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TORMIN SKALAND MUNGLINUP
• • • Finalise permitting
Secured permitting to Optimise processing
extend Tormin target LOM flowsheet • Complete study and design
+10 years through • Increase nameplate work for integrated
additional resource downstream development
production
definition • Complete Active Anode • Complete marketing
• Implement Phase 1 / Phase Manufacturing plant agreements
2 expansion initiatives Prefeasibility Study •
Project financing
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• Implement business strategy to create multi-commodity/jurisdiction-based diversified mining company, mining high grade deposits, including vertically integrated downstream processing

• Continuation of shareholder growth and return to dividends through stringent capital management and project delivery

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