Skaland Sale Defaulted, Munglinup Acquisition Talks Advance Amid Financial Strain

Skaland Sale Hits Legal Snag

Mineral Commodities Ltd (ASX: MRC) has encountered a significant hurdle in its strategic asset reshuffle as Norge Mineraler Holding AS, the buyer of its Norwegian subsidiary Skaland Graphite AS, has defaulted on the share purchase agreement (SPA). Despite a partial non-refundable payment of US$500,000 and the forfeiture of a previously refundable deposit, Norge Mineraler has failed to complete the transaction. Mineral Commodities has initiated enforcement proceedings under Norwegian law while reserving the right to withdraw action upon completion. This development delays the company’s plan to focus capital and management attention on its Australian graphite assets.

Munglinup Acquisition Negotiations Progress

Meanwhile, Mineral Commodities continues to negotiate with its joint venture partner Gold Terrace Pty Ltd to acquire the remaining 49% interest in the Munglinup Graphite Project, aiming for full ownership. The parties remain in good faith discussions over payment terms originally set at A$7.5 million, adjusting for Mineral Commodities’ current financial position and funding options. Completion is contingent on regulatory approvals including Foreign Investment Review Board clearance and withdrawal of caveats on tenements. The company prioritizes environmental approvals and advancing studies, targeting completion by December 2025, despite some delays.

Operational Update and Financial Strain

Operationally, Skaland produced 2,155 tonnes of graphite concentrate in the March quarter, generating sales revenue of US$1.15 million. Processing rates improved following the re-commencement of mining activities in January. However, the company’s cash position has tightened dramatically, with available cash dropping to US$71,000 as of 31 March 2025, down from US$1.2 million at the end of 2024. Borrowings increased slightly to US$7.2 million. Mineral Commodities secured A$2.4 million in convertible loan facilities post-quarter, including a significant contribution from its largest shareholder Au Mining Limited.

Tormin Mineral Sands in Provisional Liquidation

The company’s South African mineral sands operation, Tormin, remains in provisional liquidation. Decisions on its future, including potential sale to third parties, are under the control of the appointed liquidators. Mineral Commodities holds a 50% stake in Mineral Sands Resources (Pty) Ltd, the owner of Tormin, and is a major creditor due to intercompany loans. The liquidation adds complexity to Mineral Commodities’ financial and operational outlook.

Battery Anode Plant Shows Promise

On the innovation front, the pilot-scale battery anode plant commissioning continues with encouraging preliminary results, achieving battery-grade purity in a single pass without optimization. This project, partly funded by the Australian government’s Critical Minerals Accelerator Initiative (CMAI), has had its timeline extended to March 2026. Collaborations with Mitsubishi Chemical Corporation and CSIRO remain active, underscoring Mineral Commodities’ strategic pivot towards integrated graphite and battery mineral assets.

Strategic Outlook

Mineral Commodities is clearly navigating a challenging transition, balancing legal disputes, operational pressures, and financial constraints while advancing its battery minerals strategy. The outcome of the Skaland sale enforcement and the Munglinup acquisition negotiations will be pivotal in defining the company’s trajectory. Investors will watch closely how these developments unfold alongside the company’s efforts to stabilize cash flow and progress its downstream processing ambitions.