MINERAL COMMODITIES LTD — Investor Presentation 2014

Feb 4, 2014

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MINERAL COMMODITIES LIMITED

MINING INDABA FEBRUARY 2014

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DISCLAIMER & COMPETENT PERSONS STATEMENT

• This document has been prepared by Mineral Commodities Ltd (MRC) 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 forward looking 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 their 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 direct or indirect loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission therefrom.

• Subject to any continuing obligation under applicable law 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. 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 in this announcement which relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Allen Maynard, who is a Member of the Australian Institute of Geosciences (“AIG”), a Corporate Member of the Australasian Institute of Mining & Metallurgy (“ AusIMM ”) and independent consultant to the Company. Mr Maynard is the Director and principal geologist of Al Maynard & Associates Pty Ltd and has over 30 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). ). This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since 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 report of the matters based on this information in the form and context in which it appears.

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MRC TODAY

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Overview and History of MRC

Board of Directors and Senior Management

  - Mark Caruso – Executive Chairman

• Over the last 10 years, MRC has been focused on investing in South African mineral sands projects

• Current South African assets

• Tormin Project

• Xolobeni Project

Capital Structure

• Ordinary Shares: 404 million

• Options: 11 million

• 10 million exercisable at AUD$0.20

• 1 million exercisable at AUD$0.35

• Cash and Receivables of AUD$2.7million as of 31 December 2013

• Joseph Caruso – Non-Executive Director

• Peter Torre – Company Secretary / Director

• James Leahy – Independent Non-Executive Director

• Guy Walker – Independent Non-Executive Director

• Andrew Lashbrooke - CEO

Shareholder Structure

	Au Mining Limited	20.60%
	Zurich Bay Holdings	19.02%
	Tormin Holdings Limited	14.70%
	M & G Investments	8.84%

The top 20 shareholders control 87% of MRC

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EMERGING MINERAL SANDS PRODUCER

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TORMIN

• Beach deposit with targeted resource of 5Mt grading 41.3% heavy mineral containing 3.4% Zircon, 0.7% Rutile, 13.6% Ilmenite and 18.3% Garnet

• Life of mine producing 48Ktpa non-magnetic concentrate and > 100ktpa of each of Ilmenite and Garnet over 5 years

• Rights to offshore source of heavy mineral has

the capacity to significantly extend life of mine

XOLOBENI

Resource Statement

PROJECT	Category	Ore Mt	HM%	Ilmenite (% in HM)	Zircon (% in HM)	Rutile (%in HM)	Garnet (% in HM)
Tormin	Indicated	2.7	49.4%	21.4%	6.9%	1.4%	51,2%
Xolobeni	Measured	224	5.7%	54.5%
	Indicated	104	4.1%	53.7%
	Inferred	18	2.3%	69.6%
		346.0	5.0%	54.0%
Total MRC		348.7	5.3%	51.7%

• World class Ilmenite asset, strategically located on the East Coast of South Africa

• Resource of 346Mt grading 5% heavy mineral, including 9Mt Ilmenite, 450kt Zircon, 570kt Rutile and 450kt Leucoxene

• Life of mine exceeding 25 years

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TORMIN | XOLBENI 2013 OVERVIEW

TORMIN

XOLOBENI

• Built on time on budget for > $16M

• 140,000 man hours without LTI

• Commissioning commenced October 2013

• Initial grades exceed resource

• One of the world’s largest undeveloped mineral sands resources

• Stakeholder Engagement Report (SER) delivered to Dept Mineral Resources (DMR)

• Prospecting right application process ongoing

• Baseline study work commenced

• 60,000 tonnes mined and stockpiled for processing

• Subject to permits potential for development in 2016

• 1,800 tonnes Zircon/Rutile concentrate shipped

• Offshore sampling to commence next quarter

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TORMIN FORWARD 12 MONTHS

FEBRUARY 2013

FEBRUARY 2014

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TORMIN PRODUCTS

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Summary Production Table	Unit	Per Annum	5 Year Total
Tonnes ROM Ore Mined	000's tns	1,181	5,000
Grade Zircon (average)	% Zircon	3.42%	2.55%
Grade Rutile (average)	% Rutile	0.70%	0.54%
Grade Ilmenite (average)	% Ilmenite	11.9%	8.5%
Grade Garnet (average)	% Garnet	18.30%	16.4%
Phase 1
Zircon/Rutile Concentrate	000's tns	47.8	180.0
Zircon in Zircon Rutile Concentrate	000's tns	38.7	145.8
Rutile in Zircon Rutile Concentrate	000's tns	5.5	20.9
Phase 2
Ilmenite Concentrate	000’s tns	>125	545.0
Garnet Concentrate	000's tns	134	545.1
Additional Potential
Zircon/Rutile Concentrate	000’s tns	5	25
Xenotime	000’stns	0.5	2.5

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TORMIN SAFETY & HEALTH

• MRC previously announced an exemplary safety record at Tormin having achieved 50,000 hours without a lost time injury (LTI) by October 2013.

• Commencement of the commissioning of the Secondary Concentration Plant (“SCP”), MRC has achieved in excess of 140,000 man hours on site without an LTI.

• This record is even more impressive given the tight schedule, the number of separate contractors on site towards the end of the Project and that the vast majority of workers on site were drawn from the local community, who were relatively inexperienced and were working shifts as the site operated 24 hours per day.

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INNOVATION DRIVEN RESULTS

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• Commissioning of the Primary Beach Concentrators (“PBCs”) commenced in October 2013

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• The seasonal ocean and tidal conditions between the months of August and October served to act as a natural catalyst to upgrading the beach resource

• The Company was therefore in a position being able to mine directly off the beach and achieve a heavy mineral resource grade of 86% against the design criteria run-of-mine (ROM) resource grade of 41.3% Heavy Mineral Concentrate (HMC)

• The extremely high grade of ROM encountered on the beach allowed the Company to feed ROM ore directly into the SCP bypassing the PBCs

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PROCESSING SIMPLIFIED

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• Commissioning of the SCP commenced on the 11[th] December 2013

• High grade HMC direct from the beach required a number of changes to the SCP to accommodate the enhanced feed

• Most significant of these was the introduction of an additional spiral stage using the PBC spirals before the SCP process

• This ensured that the SCP received a consistent feed and achieve nameplate output at close to design specification

• Based on the success of associating the PBC spirals with the SPC, the PBCs will be permanently relocated at the SCP

• Non-magnetic concentrate, grading 81% Zircon and 11.6% Rutile (representing 93% and 71% recovery respectively) are bagged on site prior to despatch in accordance with offtake

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NATURAL CONCENTRATION

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• Tormin is continually exposed to the ocean’s forces which have a natural jigging effect on the ore body

• Recent spring tides have had an extremely positive effect and strong wave action has served to remove large proportions of the quartz and light heavies

• In excess of 60,000 tonnes was mined by the end of December 2013. By its own assessment, the ore blocks mined had replenished by 25,000 tonnes by the end of the quarter

• The Company is therefore optimistic that replenishment of the beach will increase the expected life of Tormin

• The testing planned for the first quarter as well as the empirical results from beach mining over this period will provide significant inputs into this assessment

	DFS	DFS	Current Beach Material	Current Beach Material	Current Beach Material
DESCRIPTION	ROM Beach Material	PBC Concentrate	ROM Beach Material (untreated)
	%	%	Min %	Max %	Ave %
Grade–Zircon	3.4	8.0	3.9	20.3	11.7
Grade–Rutile	0.7	1.1	1.0	3.4	1.6
Grade–Ilmenite	11.9	17.1	11.7	62.4	33.7
Grade–Garnet	25.3	39.4	9.5	64.4	35.3
Grade–Quartz	49.4	6.9	0	22.7	8.7

Note: Xenotime recovery to be reviewed, but > 500tpa in ROM

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Results from grain counts between 1 November and 12 December 2013

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MARKET PRICES

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Changes to Zircon price forecasts

US$/t	Q1	Q2	Q3	Q4	CY2014	CY2015	CY2016	CY2017	Long-term
New	1,050	1,100	1,250	1,250	1,163	1,350	1,500	1,500	1,250
Old	1,100	1,200	1,200	1,200	1,175	1,500	1,250	1,250	1,250
Change	-5%	-8%	4%	4%	-1%	-10%	20%	20%	0%

Source: J.P Morgan estimates

• There have been positive signs of markets stabilising during 2013, particularly in Zircon, however the industry saw unexpected weakness in Zircon and TiO2 prices declining from September to December. Analysts and industry participants believe that the weakness is predominantly cyclical and that demand is expected to rebound to historical levels

• As seen in the revised market price assumption table above, analysts believe prices for Zircon will rebound during 2014 and 2015

• All major market participants appear to agree that the mineral sands commodities have reached the bottom of the cycle and expect recovery from end of 2013 and carrying it through into 2014

• Accordingly, as Tormin commenced production at the end of 2013, modelling has been based on the consensus pricing forecasts reflected in the table above

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TORMIN FINANCIALS

	Phase 1	Phase 2
Capital Investment	US$14,240,000	US$7,120,000
Average Annual Sales Revenue	US$41,006,337	US$14,680,550
Average Annual Operating Costs	US$ 25,324,060	US$9,982,240
Average Annual Operating Cash Flow	US$15,553,196	US$2,745,054
Payback Period (Years)	0.92	2.59
IRR	80.91%	122%
NPV at 10% Base Case	US$42,492,452	US$6,410,670

• Phase 1 excludes Ilmenite production and investment in additional dry plant processing infrastructure

• Phase 2 includes Ilmenite production and an additional AUD$8 million investment in associated plant and equipment

• Phase 2 to be funded from internally generated cash and Debt Financing underpinned by appropriate offtake agreement

• Both phases exclude potential contribution from Xenotime and potential for additional non-magnetic concentrate from dry processing plant

• All figures quoted in USD at R10.70 to $1.00

• Model assumes the following commodity prices:

• Zircon: US$1250 per ton

• Rutile: US$1150 per ton

• Ilmenite: US$120 per ton

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TORMIN OFFTAKE | MARKETING | SALES

NON-MAGNETIC CONCENTRATE

• MRC concluded a Pre-Finance and Marketing Agreement with Wogen Pacific for 100% of the nonmagnetic concentrate, which is primarily comprised of Zircon and Rutile, to be produced at Tormin

• This agreement provides MRC with significant working capital finance as well as access to the full mineral sands value chain without investment in its own dry processing facilities

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ILMENITE

• MRC remains in negotiations with potential offtake partners in relation to other minerals to be produced at Tormin, with a primary focus on Ilmenite. Negotiations are significantly developed and the Company hopes to be in a position to complete product offtake agreement in the near term

GARNET

• MRC will sell the Garnet concentrate to Blastrite for secondary treatment

• Sale of Garnet concentrate to Blastrite will commence in February 2014

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1,800 tonnes of Zircon/Rutile Concentrate was shipped to Wogen Pacific in January 2014

By the end of the month, 8,895 tonnes of Ilmenite concentrate and 12,027 tonnes of Garnet concentrate had been produced

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MINING’S CONTRIBUTION TO TRANSFORMATION

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• Historical inequalities have caught the South African mining sector between the seemingly disparate poles of financial performance and societal transformation

• MRC concluded that these objectives were not necessarily mutually exclusive and has started to make a positive contribution to one of South Africa’s poorest communities:

• Structured loan to Tormin BEE partners to facilitate investment in community projects:

  • Chicken farms; food parcels for the poorest; school uniforms; books and facilities

    • Bursaries and learnerships; clinics and road upgrades

• Net new job creation through Tormin construction, development and operation with specific roles for the local community and Xolobeni partners many of whom have never worked before

• Preferential procurement opportunities enabling >40% of Tormin capex in the immediate project area much of it spent through HDSA structures initiated and supported by MRC

• Recruitment, training and development programmes ensuring >80% of the workforce and >50% of management positions will be held by HDSA’s from the outset

• Enterprise development opportunities have already supported a number of new businesses for local entrepreneurs: taxis, logistics and maintenance

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TORMIN PROJECT ENHANCEMENTS

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• MRC holds the offshore prospecting rights for the area extending 1km into the sea adjacent to the existing Tormin tenement

• According to a case study on Tormin undertaken in 1995 by the Stellenbosch University Geology Department*:

• A prominent headland, forming a J-bay just south of the source, prevents large scale dispersion of these sediments by the northward flowing littoral current. The result is an offshore trail of heavy mineral-enriched sand, which is then transported to the beach by wave action. There it is repeatedly sorted and further upgraded to be re-deposited on the beach face during mild weather conditions

• The implementation of replenishment mining of this active beach appears to be a realistic possibility. It is, after all, regularly practised by off-shore diamond mining in several favourable localities. This alternative could considerably increase the reserves and sustain mining for an extended period

• Further analysis of other minerals in the Tormin suite has indicated the presence of a rare earth in potentially economic quantities

• Initial tests have shown that a rare earth, Xenotime, is being concentrated in the nonmagnetic concentrate of more than 1% which would imply potential production of 500 tpa

• Phase 2 dry plant to produce Ilmenite would also release up to 5,000 tpa additional nonmagnetic concentrate with substantially the same grading

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• “The Geelwal Karoo heavy mineral deposit: a modern day beach placer”

• by W.G Macdonald and A. Rozendal

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XOLOBENI PROJECT

Xolobeni	Resource Statement
	Tonnes (Mt)	HM (%)	Ilmenite (% in HM )
Measured	224	5.7%	54.5%
Indicated	104	4.1%	53.7%
Inferred	18	2.3%	69.6%
Total	346	5.0%	54.0%		Strategic location on East
					Coast of South Africa–
					tenements covering	Johannesburg
					~2,900 hectares
					Total resource of 346Mt
					grading 5.00% HM,
					containing 9.3Mt of
					Ilmenite
					Pre-feasibility study also
					indicates rutile and zircon	Xolobeni
					potential
					All products meet market
					specifications

• The Xolobeni project not only has the capacity to be a world-class Ilmenite asset, but also the catalyst for social transformation of one of South Africa’s poorest communities

• Xolobeni is the 10th largest undeveloped heavy mineral deposit in the world. Strategically located on South Africa’s East Coa st, it has a tenement area of almost 2,900 hectares

• The area has a total resource of 346Mt grading 5% HM, containing 9Mt of Ilmenite. Together with Rutile (570kt), Zircon (450kt) and Leucoxene (450kt) potential, a pre-feasibility study indicates a roughly 25 year mine life

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XOLOBENI PROJECT

• MRC was granted Prospecting Rights on 4 blocks which were renewed in February 2012 for a further 3 years

• A conditional Mining Licence on the 5[th] block, Kwanyana, was revoked in May 2011

• MRC withdrew its Mining Right application for the Kwanyana block and submitted a new Prospecting Right application

• With most resource assessment and categorization completed, the prospecting work is aimed at showing that Xolobeni can be sustainably developed:

• Collection of baseline environmental data, including ground and surface water, estuaries, flora and fauna, and soil fertility and migration

• Collection of socio-economic data, including traffic, noise and air quality

XOLOBENI THE NEXT STEPS

• Final consultation with the local community and other stakeholders was undertaken in March and April 2013

• Letters of support for Xolobeni have been received by the King of the AmaPondo as well as the local head Chief

• Both local and central government have committed themselves to actively support the project based on its potential to substantially uplift the local community

• The final stakeholder reports have been submitted and MRC is awaiting the DMR’s recommendation to the Minister

• MRC is optimistic that the overwhelming economic value of the project to the country and local community will offset any downsides of a major mineral sands project in the area

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