MC Mining Limited LOCKDOWN AND SUSPENSION OF COAL PRODUCTION (7530H)
March 26 2020 - 10:22AM
UK Regulatory
TIDMMCM
RNS Number : 7530H
MC Mining Limited
26 March 2020
ANNOUNCEMENT 26 March 2020
LOCKDOWN IN SOUTH AFRICA AND SUSPENSION OF COAL PRODUCTION
MC Mining Limited ("MC Mining" or the "Company") announces the
following market update with regards to the impact on the Company
of the global COVID-19 (Coronavirus) pandemic.
Introduction
Our priority is the health and safety of our employees. The
guidance and advice we are providing employees, follows World
Health Organisation guidelines and is supplemented by direction
provided by the South African Government. The Executive Committee
regularly reviews and updates our advice to employees and monitor
the business continuity measures to ensure managerial oversight is
effective and properly coordinated.
South African Operations
The South African Government issued a directive on 23 March 2020
(the "Directive") requiring a 21-day national lockdown, effective
midnight Thursday 26 March 2020 to midnight Thursday 16 April 2020,
to contain the spread of the coronavirus in the country (the
"Lockdown"). Further to this, the Department of Mineral Resources
and Energy (the "DMRE") released a statement on Wednesday 25 March
2020. The statement notes that for "some mining operations and
processing plants a complete shutdown will not be feasible, as a
restart from scratch may be too costly" and further states that
"mining operations will be scaled down significantly". This
statement can be found at:
https://www.dmr.gov.za/news-room/post/1848 .
The Directive impacts operations at the Company's Uitkomst
Colliery, the Makhado, Vele and Greater Soutpansberg Projects as
well as its corporate office. In line with measures detailed in the
Directive, the Uitkomst Colliery will be placed on care and
maintenance during the Lockdown period. The scaled back operations
will be monitored and managed according to procedures enacted to
protect the health and safety of all of the Company's people, which
remains MC Mining's overriding priority. These procedures cover
employee communication and training, hygiene response, security
controls, health monitoring, resilience and contingency plans.
It is worth noting that the Uitkomst Colliery is a mechanised
underground operation and upon completion of the Lockdown period,
it will be possible to ramp-up to steady state production levels
within a relatively short timeframe. However, given the continued
uncertainty around the outlook for control of the Coronavirus in
South Africa, FY2020 production guidance is suspended until the
Company is in a better position to quantify the full impact of the
lockdown.
Effects of the Lockdown on Non-Essential Employees
The Lockdown has resulted in MC Mining implementing a 'no work,
no pay' policy for non-essential staff at its various sites. The
Company understands the adverse impact this policy has on staff and
is aware of alternative mitigating financial measures proposed by
the Government. These include wage payments through the Temporary
Employee Relief Scheme and the Company is investigating these
measures and will use its best endeavours to procure that staff
receive the financial support for which they qualify.
Available cash & facilities
T he Company has an available cash balance of US$1.0 million as
well as the available US$1.1 million (R20 million) general banking
facility from ABSA Bank Limited. MC Mining also has the US$7.0
million (R120 million) second tranche of the existing Industrial
Development Corporation of South Africa Limited loan available for
drawdown. As previously communicated, the Company is also in the
process of securing the balance of US$32 million (R460 million)
required to commence construction of Phase 1 of its fully permitted
Makhado hard coking coal project.
Comment
Br enda Berlin, the Company's CEO, commented: "MC Mining
supports all measures to limit the impact of COVID-19 and the
Lockdown has impacted our Uitkomst Colliery as well as our
corporate office and project sites. We anticipate that activities
at all of the sites will resume as soon as it is safe to
re-commence. Discussions with potential funders for Phase 1 of our
flagship Makhado hard coking coal project will continue during the
Lockdown period. The Company still aims to finalise the composite
debt/equity package for Phase 1 during H1 CY2020 with construction
commencing later this year."
Authorised by
Brenda Berlin
Chief Executive Officer
For more information contact:
Brenda Berlin CEO MC Mining Limited +27 10 003 8000
Tony Bevan Company Secretary Endeavour Corporate Services +61 08 9316 9100
Company advisors:
Ross Allister/David McKeown Nominated Adviser and Broker Peel Hunt LLP +44 20 7418 8900
Charmane Russell/Olwen Auret Financial PR (South Africa) R&A Strategic Communications +27 11 880 3924
Investec Bank Limited is the nominated JSE Sponsor
About MC Mining Limited:
MC Mining is an AIM/ASX/JSE listed coal exploration, development
and mining company operating in South Africa. MC Mining's key
projects include the Uitkomst Colliery (metallurgical coal),
Makhado Project (hard coking coal and thermal coal by-product).
Vele Colliery (coking and thermal coal), and the Greater
Soutpansberg Projects (coking and thermal coal).
Forward-Looking Statements
This Announcement, including information included or
incorporated by reference in this Announcement, may contain
"forward-looking statements" concerning MC Mining that are subject
to risks and uncertainties. Generally, the words "will", "may",
"should", "continue", "believes", "expects", "intends",
"anticipates" or similar expressions identify forward-looking
statements. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those expressed in the forward-looking statements. Many of
these risks and uncertainties relate to factors that are beyond MC
Mining's ability to control or estimate precisely, such as future
market conditions, changes in regulatory environment and the
behaviour of other market participants. MC Mining cannot give any
assurance that such forward-looking statements will prove to have
been correct. The reader is cautioned not to place undue reliance
on these forward looking statements. MC Mining assumes no
obligation and do not undertake any obligation to update or revise
publicly any of the forward-looking statements set out herein,
whether as a result of new information, future events or otherwise,
except to the extent legally required.
Statements of intention
Statements of intention are statements of current intentions
only, which may change as new information becomes available or
circumstances change.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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