MINERAL COMMODITIES LTD — M&A Activity 2011

Sep 19, 2011

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Mineral Commodities Ltd

ABN 39 008 478 653

Unit 17, Level 1, 133 Kewdale Road, Welshpool WA 6105, Australia PO Box 235, Welshpool DC WA 6986, Australia Telephone: 61 8 9353 4890 Facsimile: 61 8 9353 4894 Email: info@mncom.com.au Web: www.mncom.com.au

20
September
2011 Company
Announcements
Platform Australian
Stock
Exchange
Limited

**MRC

Finalises
Agreement
to
Acquire
Simto**

Mineral
Commodities
Ltd.
( ASX:
MRC )
( MRC or
the Company )
is
pleased
to
announce
that,
further
to
its announcement
on
27
July
2011,
it
has
entered
into
a
formal
Share
Sale
Agreement
to
acquire
100%
of
the
issued capital
of
Simto
Resources
Limited
( Simto )
for
a
total
consideration
of
A$37.5
million
(subject
to
the
Company,
in
its discretion,
receiving
an
independent
expert’s
report
confirming
that
the
value
is
fair
and
reasonable).
The
agreement follows
the
signing
of
the
Heads
of
Agreement
announced
on
27
July
2011
along
with
the
acquisition
of
Cable
Sands, to
transform
MRC
into
the
second
largest
independent,
vertically
integrated
and
diversified
Titanium
and
Zircon mineral
sands
producer
in
Australia.

The
acquisition
of
Simto
will
expand
MRC’s
resource
base
and
extend
the
mine
life
of
the
Cable
Sands
operations
in the
south
west
of
Western
Australia.
Moreover,
Simto’s
tenements
are
in
close
proximity
to
the
Bunbury
MSP
and
the Cable
Sands
tenements
(see
map),
making
this
a
highly
complementary
addition
to
the
acquisition
of
Cable
Sands.

Simto
owns
11
strategic,
granted
heavy
mineral
mining
tenements,
with
total
JORC
compliant
Measured,
Indicated and
Inferred
Resources
of
1.96
million
tonnes
of
contained
heavy
minerals
(see
Resource
Statement
at
the
end
of
this Announcement),
including
Zircon
(161K
tonnes),
Ilmenite
(1,535K
tonnes)
and
Rutile
(32K
tonnes)[1] .
In
addition, pursuant
to
the
1990
Wonnerup
Agreement
between
Simto
and
AMC
Minerals
Sands
Ltd
(now
known
as
Iluka Midwest
Limited
( Iluka
Midwest ),
and
a
wholly
owned
subsidiary
of
Iluka
Resources
Limited
( Iluka )
Simto
has
a first
right
of
refusal
to
acquire
tenements
currently
held
by
Iluka
and
Iluka
Midwest
in
the
event
that
Iluka
Midwest decides
to
surrender
these
tenements.
These
tenements
are
in
the
vicinity
of
those
already
owned
by
Simto.
The
area of
the
tenements
that
is
the
subject
of
the
first
right
of
refusal
has
been
delineated
on
the
below
map
as
the
“area
of influence”.

The
total
consideration
of
A$37.5
million
will
be
satisfied
through
the
issue
of
MRC
shares
and
up
to
$500k
in
cash. The
shares
will
be
issued
at
the
same
price
realised
in
the
share
placement
to
be
conducted
by
MRC
to
fund
the
Cable Sands
acquisition.
The
cash
component
represents
a
reimbursement
of
expenditure
by
Simto
in
developing
its
assets up
to
the
settlement
date.
The
final
proportions
to
be
paid
in
cash
and
MRC
shares
will
be
determined
on
the settlement
date
when
the
value
of
the
tenement
expenditure
is
known
(as
this
is
calculated
up
to
the
date
of settlement).

The
acquisition
is
conditional
upon
the
receipt
of
all
required
shareholder
approvals,
settlement
of
the
Cable
Sands transaction
and
completion
of
due
diligence
by
MRC.

Simto
is
currently
owned
directly
and
indirectly
by
MRC
Directors
Messrs
Joseph
Caruso
and
Mark
Caruso
and
the acquisition
by
MRC
is
therefore
a
related
party
transaction.
As
such,
MRC
will
require
approval
from
non-­‐associated Shareholders
for
the
purposes
of
ASX
Listing
Rules
10.1
and
10.11
and
Section
208
of
the
Corporations
Act.
The Company
will
disregard
any
votes
cast
by
Joseph
and
Mark
Caruso
and
any
of
their
associates.

A
Notice
of
Meeting
seeking
approval
for
this
transaction
will
be
despatched
to
shareholders
shortly.
The
Notice
of Meeting
will
include
an
independent
expert’s
report
prepared
by
Ernst
&
Young
commenting
on
the
fairness
and reasonableness
of
the
transaction
to
non-­‐associated
shareholders
in
accordance
with
the
requirements
of
Listing Rule
10.1.
The
conclusions
of
the
independent
expert’s
report
are
expected
within
the
next
week
at
which
point
the Company
will
proceed
to
complete
the
placement
in
order
to
proceed
with
the
Cable
Sands
acquisition.

Shareholders
in
General
Meeting
yesterday
voted
in
favour
on
a
number
of
resolutions
in
relation
to
the
acquisition of
Cable
Sands
and
the
associated
capital
raising.

1 These
numbers
differ
slightly
to
the
total
resources
in
the
release
of
27
July
2011
following
further
review.

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**For

further
information
please
contact:**

Mineral
Commodities
Limited Mark
Caruso Managing
Director +61-­‐(0)417-­‐964-­‐234

Peter
Torre Company
Secretary +61-­‐(0)419-­‐914-­‐629

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Resource Statement

			Overall	Ilmenite	MagLeuc	NM Leuc	Rutile	Zircon	TiO2
PROJECT									tonnes
	TID	Category	HM%	Tonnes	tonnes	tonnes	tonnes	Tonnes
TUTUNUP WEST	M70/1108	Indicated	64.5	470,592	23,347	45,965	8,026	48,883	264,002
COOLUP	M70/0942	Indicated	78.8	269,102	8,538	21,515	19,466	26,637	150,966
GRICE	M70/0785	Indicated	78.7	169,079	5,156	13,535	1,504	17,617	95,361
NORTH CAPEL	M70/1117	Inferred	87.5	26,740	367	642	367	1,192	14,466
STRATHAM	M70/0792	Measured	87.4	48,726	948	1,840		2,453	26,994
STRATHAM	M70/0792	Indicated	87.6	8,672	188	297		475	4,805
WONNERUP	M70/03601	Indicated	71.8	179,443	11,996	26,741	1,999	17,744	106,948
WONNERUP	M70/0569	Inferred	63.4	49,395	4,830	12,076	701	5,999	30,180
Cookernup	R70/0010	Indicated	78.0	181,100	9,752	15,556		19,271	107,211
Cookernup	R70/0010	Inferred	73.3	108,008	8,546	10,462		15,766	67,289
Cookernup	R70/0011	Inferred	57.5	24,317	3,722	7,189		4,821	15,101
				1,535,173	77,389	155,817	32,062	160,859	883,323

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). Mr Maynard consents to inclusion in the report of the matters based on this information in the form and context in which it appears.

1 The transfer of M70/0360 to Simto Resources Limited has been lodged with the Department of Mines and Petroleum and recorded, and the transfer of M70/0360 is now pending registration. Upon registration Simto Resources Limited will be recorded as the registered holder of M70/0360.