MRC in Advanced Talks for Complete Ownership of WA Graphite Project

Mineral Commodities Ltd (“MRC” or “the Company”) (ASX:MRC) is pleased to announce that its wholly owned subsidiary, MRC Graphite Pty Ltd (“MRCG”), is engaged in good faith, without prejudice negotiations with its joint venture partner, Gold Terrace Pty Ltd (“Gold Terrace”). These discussions are focused on reaching a commercial settlement to resolve a dispute concerning MRCG’s right to acquire a 90% interest in the Munglinup Graphite Project (“Munglinup” or the “Munglinup Project”).

The Company plans to postpone fulfilling its Earn-in Obligation to provide time for a settlement to be reached. If successful, the settlement would enable MRCG to increase its stake in Munglinup from 51% to 100%.

MRCG currently holds a 51% interest in the Munglinup Project under a Farmin and Joint Venture Agreement executed in November 2017 between MRC, MRCG, and Gold Terrace (“Agreement” or “JV Agreement”). Gold Terrace holds the remaining 49%. According to the Agreement, MRCG can increase its interest from 51% to 90% by fulfilling the Earn-in Obligations, which include completing a Feasibility Study, paying Gold Terrace A$800,000, and issuing 30 million MRC shares to Gold Terrace.

On April 18, 2024, MRC announced that it had informed Gold Terrace of its intention to satisfy the remaining Earn-in Obligations by paying A$800,000 and issuing 30 million MRC shares to Gold Terrace on June 6, 2024. In this announcement, MRC noted that despite Gold Terrace’s prior written acknowledgment, Gold Terrace disputes MRCG’s right to increase its interest in the Munglinup Project from 51% to 90%, arguing that the Feasibility Study provided did not meet the requirements outlined in the Agreement. MRCG asserts that it has fulfilled the relevant Earn-in Obligations and therefore has the right to increase its stake in the Munglinup Project from 51% to 90%.

The parties have held several meetings to resolve the dispute and reach a commercial settlement. Although both parties are reserving their rights, progress has been made, and good faith negotiations are ongoing. The specific terms under discussion remain confidential, and the outcome is still uncertain. However, if an agreement is successfully executed and completed, it is likely to result in the dispute being resolved and MRCG owning 100% of the Munglinup Project.

To provide ample time for a potential agreement and obtain Foreign Investment Review Board approval, the Company has informed Gold Terrace of a revised completion date of July 6, 2024, to fulfill its Earn-in Obligations.

The Company’s Chief Executive Officer, Mr. Scott Lowe, said: " MRC is pleased with the constructive negotiations conducted in good faith with Gold Terrace. We have made enough progress to justify delaying the exercise of our earn-in right, allowing time to reach a commercial settlement that could potentially increase MRC's interest in the Munglinup Project to 100%. Munglinup is a key part of our portfolio of graphite assets, which also includes the Munglinup development project in Australia, the Skaland operating graphite mine, and the Active Anode Material Project."