MINERAL COMMODITIES LTD — Investor Presentation 2018

Mar 14, 2018

Munglinup Graphite Project

Australia’s Next Premier Graphite Project

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MINERAL COMMODITIES LTD

Mineral Commodities Ltd | ASX: MRC | www.mineralcommodities.com

MUNGLINUP GRAPHITE PROJECT

FORWARD LOOKING

STATEMENTS

Mineral Commodities Ltd (MRC) has prepared this presentation based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of MRC, its directors, employees or agents, advisers, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it. This presentation is not an offer, invitation, solicitation or other recommendation with respect to the subscription for, purchase or sale of any security, and neither this presentation nor anything in it shall form the basis of any contract or commitment whatsoever. This presentation may contain forward looking statements that are subject to risk factors associated with mineral exploration, mining and production businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory changes, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. Except as required by law or regulation, MRC is under no obligation to update these forward looking statements.

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MINERAL COMMODITIES LTD CORPORATE

ASX : MRC

OVERVIEW

SHARES ON ISSUE 414,941,571

SUBSTANTIAL SHAREHOLDERS 414,941,571 AU MINING LIMITED 26.7% ZURICH BAY HOLDINGS PTY LTD 19.0% TORMIN HOLDINGS 14.8% MARKET CAPITALISATION M&G INVESTMENT MANAGEMENT LIMITED 8.8% US$42.1m MR & MRS ANTHONY C LOWRIE 6.6% Iran MRK PJSC 14 Projects under review BORROWINGS Gold/Copper Cobalt/Nickel US$4.2M @ 31 Dec 2017 Zinc Potash/Lithium

PROJECT MAP

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CASH BALANCE
Transworld Energy & Minerals
US$11.0M @ 31 Dec 2017 Resources (SA) (Pty) Ltd
(RSA)
Rich Ilmenite
ENTERPRISE VALUE
US$35.3M @ 31 Dec 2017
MRC Exploration MRC Graphite Pty Ltd
PERFORMANCE RIGHTS Graphite
Australia Pty Ltd
6,950,000 Mineral Sands Resources Channel Iron OreCopper/Gold
(Pty) Ltd (RSA) Hard Rock Lithium Pegmatites
Zircon/Rutile
OPTIONS Ilmenite
Garnet
6,000,000
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MUNGLINUP GRAPHITE PROJECT

MANAGEMENT

TEAM

SURINDER GHAG TECHNICAL SERVICES MANAGER

21 years mining experience Atlas Iron |Nautilus Minerals |Ok Tedi | Consolidated Rutile Limited

MANAGEMENT TEAM

DANIEL HASTINGS BUSINESS DEVELOPMENT

19 years mining experience Ok Tedi | Newcrest | Equinox | Allied Gold | Silver Standard

TONY SHEARD CFO

33 years mining & engineering experience Iluka | WMC Resources

PROVEN TECHNICAL TEAM DELIVERING PROJECTS ON TIME & ON BUDGET

BAHMAN RASHIDI IRAN MANAGING DIRECTOR GEOLOGIST

21 years mining experience RioTinto | Normandy Mining

ADRIAAN DU TOIT GEOLOGIST

32 years of mining experience AngloGold Ashanti | Zamanco | Minerals | Shaw River Manganese | Sinosteel Midwest Corporation

MARK CARUSO EXECUTIVE CHAIRMAN CHIEF EXECUTIVE OFFICER

37 years mining experience Allied Gold

ROSS HASTINGS NON-EXECUTIVE DIRECTOR GEOLOGIST

44 years mining experience BHP | Allied Gold | Placer Pacific | Nord Resources

PETER TORRE NON-EXECUTIVE DIRECTOR COMPANY SECRETARY

JOSEPH CARUSO NON-EXECUTIVE DIRECTOR

GUY WALKER NON-EXECUTIVE DIRECTOR

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MUNGLINUP GRAPHITE PROJECT

LOCATION

• ➢ 105km west by sealed road from the port of Esperance

• ➢ Mining Lease granted to 2031 on designated Mining Reserve

HIGH GRADE MINERAL RESOURCE

• ➢ Significant previous work undertaken including feasibility study and process testing

• ➢ Mineral Resource of 3.6Mt at 15.3% TGC (10% cut-off) with mineralisation open in all directions

• ➢ Recent metallurgical test work confirms production of high grade concentrate (>98% TGC)*

NEAR TERM PRODUCTION TIMELINE

• ➢ High grade, coarse flake graphite production target within 18 months

• ➢ Strategically significant state project – Lead Agency Framework Status

• ➢ Downstream vertically integrated purification and spheroidisation development strategy

LOW PRODUCTION COSTS

• ➢ Open-pit graphite mining operation targeting the lowest operating costs quartile for global flake graphite deposits

* Test work confirms averages of up to 97.4% TGC in concentrate with some size fractions able to produce grades of up to 98.9%

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MUNGLINUP GRAPHITE

DEPOSIT

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MUNGLINUP GRAPHITE PROJECT

MINERAL RESOURCE /

PRODUCTION TARGET

MUNGLINUP GRAPHITE DEPOSIT

Measured and Indicated Mineral Resources of 3.6 million tonnes @ 15.3% Total Graphitic Carbon (TGC)*

Measured and Indicated Production Target of 3.2 million tonnes @ 17.0% Total Graphitic Carbon (TGC)**

Mineral	Tonnes	Grade (TGC)	Contained
Resource	(Mt)	@ 10% cut-	Graphite
		off	(kt)
Measured	1.7	14.1%	241
Indicated	1.9	16.3%	313
Total	3.6	15.3%	554

Production	Tonnes	Grade (TGC)	Contained
Target	(Mt)	Calc.	Graphite
		Cashflow	(kt)
Measured	1.3	16.5%	216
Indicated	1.9	17.4%	324
Total	3.2	17.0%	540

• *At 10% TGC cut off. Some discrepancies in totals may occur due to rounding of numbers. Resource Source: Aemco Pty Ltd Munglinup Resource Report, Mineral Resources July 2016 Version B.

• **Production Target Source: Munglinup Scoping Study – Full details released in the initial Scoping Study ASX release of 27 November 2017. All material assumptions underpinning the production target and forecast financial information derived from the production target as set out in that release continue to apply and have not material changed.

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MUNGLINUP GRAPHITE PROJECT

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MINERAL RESOURCE

UPSIDE POTENTIAL

UPSIDE RESOURCE POTENTIAL

• ➢ Exploration drilling program currently underway with visual confirmation of extensions to mineralisation

• ➢ Drill restricted Mineral Resource

• ➢ Large potential to significantly increase mineral resource along strike and at depth of all deposits

• ➢ Potental for occurrence of other mineralisation including magnesite

• ➢ Natural flake size distribution of 67% greater than 150µm

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MUNGLINUP GRAPHITE PROJECT

Recent metallurgical testwork from graphite industry processing engineers, Battery Limits, form the basis for the Pre-Feasibility Study currently being finalised.

DESCRIPTION	VALUE
Average Total Material Movement	2.0Mtpa
Average Annual Plant Throughput	400ktpa
Average Annual Graphite Production	56ktpa
Estimated Operating Expenditure	A$528/t (US$396/t)
Estimated Capital Expenditure	A$47M (US$35M)
Mine Life	9 Years
Mid Case Basket Pricing	US$1,092/t

Source: Munglinup Scoping Study – Full details released in the initial Scoping Study ASX release of 27 November 2017. All material assumptions underpinning the production target and forecast financial information derived from the production target as set out in that release continue to apply and have not material changed.

KEY PROJECT

PARAMETERS

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MUNGLINUP GRAPHITE PROJECT

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ENVIRONMENT AND

COMMUNITY

ENVIRONMENTAL PERMITS AND APPROVALS

• ➢ Completion of all surveys and studies scheduled for Q2 2018

• ➢ Submission of applications Q2 2018

• ➢ Level 2 Lead Agency Status granted by DMIRS due to strategic significance of project

COMMUNITY

• ➢ Extensive community interest and support in the project, especially with closure of Ravensthorpe nickel mine and Cliffs Iron Ore business

• ➢ Good relationship with Traditional Owners, working together to assess any potential heritage issues

• ➢ Development policy of local employment preferred and partnering with / supporting local businesses where possible

• ➢ Strong vision to develop downstream processing options within Western Australia, adding to a compelling case for a WA battery manufacturing industry

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MUNGLINUP GRAPHITE PROJECT

GLOBAL

COMPARISONS

RESOURCE

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18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
Munglinup Syrah Walkabout Lincoln Graphex Black Rock Magnis
Graphite Grade (% TGC)
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Sourced from publicly available information

CAPEX

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300
250
200
150
100
50
0
Walkabout Munglinup Lincoln Graphex Black Rock Syrah Magnis
OPEX
600
500
400
300
200
100
0
Lincoln Walkabout Munglinup Syrah Black Rock Graphex Magnis
US$ million
US$ / t
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MUNGLINUP GRAPHITE PROJECT

PROJECT DEVELOPMENT

SCHEDULE

REGULATORY APPROVALS

DETAILED ENGINEERING & FS COMPLETION

2018 APRIL JUNE JULY 2019 SITE ACCESS REGULATORY SUBMISSIONS

COMMISSIONING FIRST PRODUCTION

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MUNGLINUP GRAPHITE PROJECT

Traditional markets are still the main source of demand. Demand in the battery market is growing however overall the battery market remains relatively small.

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GRAPHITE

MARKET/DEMAND

Canaccord estimate the market for natural graphite to grow from ~640ktpa in 2015, ~1.1Mtpa in 2020, and to +2.0Mtpa by 2025, representing CAGR’s of 5% and 12% respectively.

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Demand growth is driven by batteries.

Graphite prices are up 32 to 38 per cent year on year depending on flake size due to:

• ➢ an improving steel industry;

• ➢ environmental related production problems in China; and

• ➢ continued strong demand growth from the lithium ion battery industry.

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MUNGLINUP GRAPHITE PROJECT

DOWNSTREAM VALUE ADDING

BATTERY ANODE MATERIAL

VALUE PROPOSITION

• ➢ Upgrading of Munglinup high grade concentrate through thermal purification and spheroidisation for battery anode applications

• ➢ Uncoated spherical graphite pricing* between US$2,800 and US$3,850 depending on size of particles

• ➢ Doral facility in Kwinana already fully permitted with easy access to infrastructure and other requirements**

PRODUCT SALES

• ➢ Discussions with various potential offtake parties commenced

• ➢ Product testwork underway to determine exact Munglinup product specifications for various markets

• ➢ Production of a bulk marketing sample (+200kgs) commenced in Q1 2018

• ➢ Dedicated Marketing Manager to be appointed

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Flake graphite

Spherical coated graphite

THE PROCESS

• ➢ Pre-Feasibility Study currently underway to assess the production of battery anode material at Kwinana using high grade Munglinup concentrate

• ➢ Assessment of both coated and uncoated spherical graphite production

• ➢ Results expected within 6 to 12 months due to extensive battery cycle testing requirement

* Benchmark Mineral Intelligence Feb 2018 ** ASX Release dated 13th Dec 2017 – MOU with Doral – Spheroidisation & Purification of Graphite

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MUNGLINUP GRAPHITE PROJECT

VALUE PROPOSITION

• ➢ Pre-treatment of Munglinup concentrate forcing apart the crystal lattice planes

• ➢ The pre-treated graphite undergoes rapid expansion when heated to form expanded graphite

• ➢ Large flake (thick) graphite highly desirable and attracts a market premium

• ➢ Doral* facility in Kwinana already fully permitted with easy access to infrastructure and other requirements to produce pre-treated graphite for expandable markets

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DOWNSTREAM VALUE ADDING

EXPANDABLES MARKET

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EXPANDABLE GRAPHITE

• ➢ Excellent insulative and fire retardant properties

• ➢ Rapid expansion on heating releases inert gas that extinguishes fires by suffocation

• ➢ Non carcinogenic material

• ➢ China recently banned use of traditional brominate flame retardants in all new buildings

• ➢ Used in aircraft manufacturing as a light weight fire retardant

* ASX Release dated 13th Dec 2017 – MOU with Doral – Spheroidisation & Purification of Graphite

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MUNGLINUP GRAPHITE PROJECT

SUMMARY

THE MUNGLINUP VALUE PROPOSITION

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• ➢ Tier 1 asset in a Tier 1 Jurisdiction

• ➢ Mining Lease granted in close proximity to existing infrastructure including power, water, highway, and port

• ➢ High grade deposit with mineralisation open along strike and at depth

• ➢ Simplified flowsheet with ability to produce high grade concentrate at >98% TGC

• ➢ Low capital and operating costs (first quartile)

• ➢ Project amenable to fast-tracking and scalability for near term development

• ➢ Potential to value add through development of downstream processing options including battery anode material and expandable graphite

• ➢ Strong management team with history of delivering projects on time and on budget

• ➢ Strong cash flows from South African Tormin mineral sands operation, ungeared balance sheet and cash reserves

• ➢ Accretive asset value not recognised in MRC’s current share price / Market Capitalisation

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