The Mineral Commodities Limited (ASX: MRC) share price is edging higher in morning trade, up 1.6%.

Mineral Commodities entered a trading halt yesterday pending today's announcement. We take a look at the details of the ASX resource share's announcement below.

What did Mineral Commodities report this morning?

Mineral Commodities shares are moving higher after the company reported it has entered into a non-binding Memorandum of Understanding (MOU) with Swedish-based Superior Graphite Co.

The MOU is the first step towards forming a 50:50 Joint Venture (JV) between the 2 companies. The JV would enable Mineral Commodities to use Superior's thermal purification facility in Sundsvall, Sweden.

Mineral Commodities plans to use Superior's electro-thermal purification technology to purify its natural flake graphite. The company will immediately undertake a period of due diligence on the Sundsvall facility. It reported the facility has all the required key infrastructure in place along with experienced operating personnel and management.

According to the release, the JV could produce approximately 15–20,000 tonnes per annum (tpa) of Sustainable Graphite Anode Material. The company intends to sell the product primarily to European battery manufacturers who are looking for supplies outside of China.

Commenting on the MOU, Mineral Commodities Chairman, David Baker said:

The JV would provide MRC with a faster route to vertical integration for greater margin capture, reduced technology risk and capex while maintaining our commitment to produce the most sustainable graphite anode material possible.

Superior's CEO, Edward Carney added, "We are excited to partner with MRC to leverage our leading intellectual property and existing Sundsvall operations synergistically into the European battery anode market at this crucial time in demand for clean energy materials."

Mineral Commodities share price snapshot

Mineral Commodities shares are up 21% over the past full year. By comparison, the All Ordinaries Index (ASX: XAO) is up 31% over that same time.

Year-to-date the Mineral Commodities share price is down 13%.

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The Mineral Commodities Limited (ASX: MRC) share price spent today in freefall after the termination of its CEO. The notice was issued after close of trade yesterday, with today being the first time investors had the chance to react. 

The Mineral Commodities share price opened 2.8% down on yesterday's close, but by midday it was down by 20% and at close of trade it hit a 25% loss.

Let's look deeper into the CEO's sacking.

"The Board's relationship with, and the provision of CEO services by, Mr Caruso became untenable" 

Mineral Commodities reported last night that Mark Caruso was forced out of the role of CEO due to a "breakdown" between himself and the board.

What caused the breakdown is a mystery, with the only explanation given by the company vague.

According to the company, the CEO's sacking followed a "commencement of enquiries into a potential related party matter".

Perhaps foreseeing enquires into what the matter may be, the company continued: "Those enquiries are ongoing and the company is unable to provide further detail at this time."

Your guess is as good as mine as to what muddied the relationship between Caruso and the board. Such ambiguity likely didn't help Mineral Commodities' share price today.

Caruso had held the role of CEO at Mineral Commodities since 2012.

The company's chair, David Baker, and its non-executive director, Russell Tipper, will now take on the role of acting CEO. The board will begin its search for a replacement CEO immediately.

In its statement the company described the situation as "regrettable". Particularly given Caruso's contribution to its growth.

The company finished its announcement by reiterating the apparent necessity of the move.

"The Board has resolved that it is in the best interests of the Company, and in line with its legal and governance obligations to proceed in this way," it said.

Mineral Commodities share price snapshot

After today's drama, the Mineral Commodities share price has lost any gains it has made on the ASX in 2021. It's currently down 25% year to date. Though, it's still up 58% over the last 12 months.

At the time of writing, Mineral Commodities' share price is 27 cents, down from its previous close of 36 cents.

The company has a market capitalisation of around $164 million, with approximately 456 million shares outstanding.

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The Mineral Commodities Limited (ASX: MRC) share price leapt by 13.64% on Tuesday following the release of positive drill results at the company's Tormin Inland Strands Project. MRC is a global mining and development company predominantly focused on the mineral sands and battery minerals sectors but also with interests in other mining tenements.

The company's three key projects in its mineral sands and battery minerals sector include the Skaland Graphite Operation, the Munglinup Graphite Project and the Torman Mineral Sands Operation:

The Skaland operation is the largest crystalline graphite producer in Europe and the fourth largest producer globally outside of China. Accordingly, it accounts for around 2% of global, annual, natural-flake graphite production.
The Munglinup project lies along the border of the shires of Esperance and Ravensthorpe in Western Australia. The most recent estimation of total mineral resource at the site was 7.99 million tonnes.
Tormin Mineral Sands, the project at the centre of today's announcement, is ∼360kms north of Cape Town on the west coast of South Africa. The site hosts some of the richest grades of naturally occurring zircon, ilmenite, rutile, magnetite and garnet in the world.

What moved the MRC share price?

The company announced very high grade results from its newly granted S102 Mining Right. This includes total heavy mineral (THM) grades from three separate drill holes on the Western Strandline (shoreline) as defined below.

• 73.1% at 5 metres
• 68.6% at 5 metres and
• 65.2% at 7 metres

The strandline is a concentration of high-grade Valuable Heavy Minerals including zircon, rutile, anatase, ilmenite, garnet, and magnetite. Therefore, the Western Strandline deposit is now clearly defined to the point where the company will commence immediate mining.

Management commentary

MRC Executive Chairman, Mark Caruso said:

"The Company is now underpinning the known potential of one of the highest grade global mineral sands prospects … We will be stepping up our efforts to target additional resources that will further underpin the growth…at the Inland Strand at Tormin".

MRC share price

By the close of Tuesday's trade, the MRC share price was up by 13.64%. Accordingly, this values the company at $113.77 million with a price-to-earnings (P/E) ratio of 9.35. At the current price, the company has a trailing 12 month dividend yield of 5.2%.

Although MRC saw decreases in overall demand during the COVID-19 crisis, China's demand for high-grade, non-magnetic, zircon rutile concentrates continued unabated. I believe this holds the MRC share price in good stead moving forward. 

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The Mineral Commodities Limited (ASX: MRC) share price ended the week on a sour note, closing 15.38% lower on Friday at 22 cents.

While the ASX was a sea of red as investors responded to a potential second COVID-19 wave in the US, Mineral Commodities also released a trading update today which likely weighed on its shares.

Mineral Commodities is a global mining and development company. Its primary focus is on the development of high-grade deposits within the mineral sands and battery minerals sectors.

The company's major projects include the Tormin mineral sands operation in South Africa and the Skaland graphite operation in Norway.

Operations update

In the release today, Mineral Commodities shed some light on trading conditions and recent developments at its major operations.

At Skaland, the company's mining operations and downstream program haven't experienced any major interruptions from COVID-19.

Meanwhile, at Tormin, Mineral Commodities revealed that the pandemic has caused delays for its section 102 expanded mining rights application. Nonetheless, the application has progressed to the Department of Mines Resources and Energy for granting.

Mining and processing operations at Tormin were impacted by South Africa's nationwide lockdown in March and April. However, operations resumed on 13 April and have since returned to normal. Accordingly, the company reported that mining and processing tonnes in May were the highest recorded performance for the year.

Sales

Mineral Commodities revealed it has seen "unabated" demand and continues to sell all the production of its non-magnetic zircon rutile concentrates to China.

However, as flagged back in March, there has been reduced demand for bulk ilmenite concentrate. As a result, no sales for ilmenite concentrate had been secured up until mid-June. However, the company noted it has now secured firm sales for the second half of FY20.

With this, Mineral Commodities stated it has observed improving market conditions as most Chinese tertiary mineral sands processing facilities have returned to production. It expects to start shipping ilmenite concentrates by as early as July 2020.

Meanwhile, graphite sales at Skaland have continued without interruption. The company achieved record sales in the first quarter as product inventory accumulated in 2019 was sold down.

Dispute with GMA Group

In today's release, Mineral Commodities also flagged a technical dispute that has arisen regarding its Life of Mine Garnet Offtake Agreement with GMA Group.

The agreement relates to garnet concentrate from the Tormin operations and involves Mineral Commodities delivering a minimum of 210,000 tonnes per annum to GMA.

The two parties are disagreeing over stockpiled inventory quantities and have reverted to a formal dispute resolution process. Mineral Commodities expects the dispute resolution process to be concluded within 60 days.

Financial position

Turning to the balance sheet, Mineral Commodities has US$18.6 million in current account receivables. This includes US$11.7 million owing from GMA Group, with US$8.6 million past due for payment.

Mineral Commodities noted that budgeted revenue and operating cash inflows have been adversely affected by the disruption to normal ilmenite and garnet sales.

"The Company's business remains sound and on track to deliver the growth profile at Tormin and Skaland, however unforeseen circumstances have ensued, compounded by the COVID-19 pandemic, which require Management and the Board to undertake contingency planning to ensure that the business successfully navigates these challenges," said executive chair Mark Caruso.

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