TIDMMCM
RNS Number : 7748K
MC Mining Limited
24 April 2020
ANNOUNCEMENT
24 April 2020
REPORT FOR THE QUARTERED 31 MARCH 2020
CONTINUED PRODUCTION IMPROVEMENTS AT UITKOMST COLLIERY
MC Mining Limited ("MC Mining" or the "Company") which operates
in South Africa, together with its subsidiaries, hereby provides
its update for the three months ended 31 March 2020, the third
quarter (the "Quarter") of the Company's 2020 financial year. All
figures are denominated in United States dollars unless otherwise
stated. Safety metrics are compared to the preceding quarter while
financial and operational metrics are measured against the
comparable period in the previous financial year . A copy of this
report is available on the Company's website, www.mcmining.co.za
.
Salient operational and corporate features
-- Safety initiatives continued at the high-grade Uitkomst
metallurgical and thermal coal mine ("Uitkomst Colliery" or
"Uitkomst") with one lost-time injury ("LTI") recorded during the
Quarter (FY2020 Q2: two LTIs);
-- The South African Government issued a directive to contain
the spread of the COVID-19 virus, instituting a 21-day national
lockdown (the "Lockdown"), effective midnight Thursday 26 March
2020. This was subsequently extended to midnight on 30 April 2020
and restrictions will be slowly eased from 1 May 2020, subject to
extreme caution.
-- The Lockdown resulted in the Uitkomst Colliery being placed
on care and maintenance and also impacted activities at the
Company's development projects in the Limpopo province.
-- Prior to the 26 March 2020 Lockdown, the Uitkomst Colliery
continued to generate pleasing production trends and run-of-mine
("ROM") coal production was 12% higher than the March 2019 period
(127,122 tonnes ("t") vs. 113,190t);
-- Sales of high-grade metallurgical, thermal and high-ash
middlings coal were 4% higher than the comparative period (72,942t
vs. 70,271t);
-- Composite debt/equity funding initiatives for the Makhado
hard coking coal project ("Makhado Project" or "Makhado")
continued, with funding now expected to be completed in Q2/Q3
CY2020;
-- Vele semi-soft coking and thermal coal colliery ("Vele
Colliery" or "Vele") remained on care and maintenance during the
Quarter, but the Vele processing plant is expected to be
refurbished and recommissioned as part of Phase 1 of the Makhado
Project when financed; and
-- Brenda Berlin was appointed as Acting Chief Executive Officer
("CEO") following the resignation of David Brown.
Coal market and financial features
-- Average API4 export thermal coal prices for the Quarter of
$79/t were 5% lower than the comparative March 2019 period's $83/t
; and
-- Available cash at Quarter-end was $1.8 million ($3.5 million
at the end of December 2019) with restricted cash of $0.03
million.
Brenda Berlin , CEO commented :
"Uitkomst continued to generate pleasing results with coal
prices trending higher than the first half of the current financial
year. Even though the colliery had fewer days' production in the
Quarter than Q3 FY2019, ROM coal production was 12% higher. The
spread of the COVID-19 virus resulted in the South African
Government declaring a Lockdown from 26 March 2020 and key
customers significantly reduced or suspended operations. The
Lockdown also led to the Uitkomst Colliery being placed on care and
maintenance and the Company supports all measures to limit the
impact of the virus. Safety of our people is critical and
activities at all of our sites will only resume when it is safe to
do so.
The Lockdown also impacted MC Mining's corporate office and
Makhado, Vele and GSP sites. We implemented contingency programmes,
ensuring key activities continue remotely in isolated, safe
environments. The Company continues to interact with potential
domestic and international capital-providers during the Lockdown
and anticipates that the process to secure the balance of funding
required to commence development of Phase 1 of Makhado will be
completed in Q2/Q3 CY2020 with construction commencing shortly
thereafter ."
QUARTERLY COMMENTARY
National Lockdown
The health and safety of the employees is MC Mining's overriding
priority and the Company follows World Health Organisation
guidelines, supplemented by direction provided by the South African
Government. The Lockdown impacted activities at the Makhado, Vele
and Greater Soutpansberg Projects ("GSP") as well as the Company's
corporate office and resulted in Uitkomst being placed on care and
maintenance from 27 March 2020. The Company has implemented its
business continuity measures as well as enacted procedures to
protect the health and safety of all of its people, including
health monitoring, training, hygiene and security controls.
The Lockdown also resulted in MC Mining having to implement a
'no work, no pay' policy for non-essential staff. Following this
and subsequent to the end of the Quarter, the Company successfully
applied for a portion of wages to be paid by the Temporary Employee
Relief Scheme. This will reduce the adverse financial impacts that
the Lockdown is having on staff and the funds will be distributed
to eligible employees in April 2020.
The Lockdown was subsequently extended to 30 April 2020 and will
be followed by a phased easing from 1 May 2020, subject to extreme
caution, with the South African Government yet to clarify
activities permissible from this date. The Company continues to
monitor the effects of the Lockdown on its operations as well as
critical suppliers and customers . The Uitkomst Colliery is a
mechanised underground operation and it will be possible to ramp-up
to steady state production levels within a relatively short
timeframe once the Lockdown period is over and key suppliers and
customers have recommenced operations.
Uitkomst Colliery - Utrecht Coalfields (70% owned)
The continued focus on safety contributed to the improved
performance at Uitkomst and the colliery recorded one LTI during
the Quarter (FY2020 Q2: two LTIs).
The production improvement initiatives previously implemented at
Uitkomst continued to yield results and ROM coal production was 12%
higher than the comparative period (127,122t vs 113,190t), despite
the loss of approximately 8,000 tonnes of ROM coal production due
to the Lockdown. Sales for the Quarter of high-grade metallurgical
and thermal coal were 64,264t (FY2019 Q3: 61,956t) while 8,678t of
high-ash middlings coal were sold (FY2019 Q3: 8,315t).
Average API4 thermal coal prices for the Quarter improved on H1
FY2020 prices but remained 5% lower than the comparative period in
2019 ($79/t vs $83/t). The lower coal prices contributed to revenue
per tonne falling 8% ($69/t vs. $75/t) while production costs were
also lower, reducing from $50/t to $37/t, benefitting from improved
ROM coal production, enactment of further cost control measures and
a 10% weakening of the ZAR:US$ exchange rate.
Quarter to Quarter to
end-Mar 2020 end-Mar 2019 %
Production tonnages
Uitkomst ROM (t) 127 122 113 190 12%
Sales tonnages
Own ROM (t) 64 264 61 956 4%
Middlings sales 8 678 8 315 4%
72 942 70 271 4%
Quarter financial metrics
Revenue/t ($) 69.33 75.20 (8%)
Revenue/t (ZAR) 1 064 1 054 1%
Production cost/ROM tonnes
($)^ 36.70 50.17 (27%)
---------------------------- -------------- -------------- ------
^ costs are all South African Rand based
The Uitkomst Colliery has an estimated 15-year life-of-mine
("LOM") which includes the development of a north adit (horizontal
shaft). The colliery is in the process of reassessing options
regarding the design of the planned north adit.
Makhado Hard Coking Coal Project - Soutpansberg Coalfield (69%
owned)
The fully permitted Makhado Project recorded no LTIs (FY2020 Q2:
nil) during the Quarter.
MC Mining's flagship Makhado Project has very favourable
economics and its phased development will deliver positive returns
for shareholders. Makhado has a LOM in excess of 46 years and
construction of the project will position MC Mining as South
Africa's pre-eminent hard coking coal ("HCC") producer.
The construction of Makhado Phase 1 comprises the development of
the west pit and modifications to the existing Vele Colliery
processing plant . The Company concluded the initial step in the
Phase 1 composite debt/equity funding process when it secured a
conditional R245 million ($14.0 million) term loan facility from
the Industrial Development Corporation of South Africa Limited.
During the Quarter the Company advanced various initiatives to
raise the balance of the funding required. This included positive
discussions with debt providers, current shareholders and potential
new shareholders at both group and project level. MC Mining
anticipates that this will be completed in Q2/Q3 CY2020, following
the ending of the Lockdown. Phase 1 has a nine-month construction
period with first coal sales in month 10.
Phase 1 is a critical step in the development of Phase 2 of the
Makhado Project, which also has significant positive economics, and
the Company has already secured off-take agreements for circa 50%
of the approximately 0.8 million tonnes per annum of Phase 2
HCC.
Vele Semi-Soft Coking and Thermal Coal Colliery - Limpopo (Tuli)
Coalfield (100% owned)
The Vele Colliery remained on care and maintenance during the
Quarter and no LTIs were recorded during the period (FY2020 Q2:
nil).
There were no further developments to report during the Quarter
and the Vele processing plant is expected to be refurbished and
recommissioned as part of Phase 1 of the Makhado Project.
Greater Soutpansberg Project - Soutpansberg Coalfield (74%
owned)
The GSP recorded no LTIs (FY2020 Q2: nil) during the
Quarter.
The GSP comprises the Chapudi, Mopane and Generaal areas that
are MC Mining's longer-term coking and thermal coal projects. There
were no further developments to report during the Quarter.
Markets
The slowdown in the global economy during CY2019 resulted in a
decline in metallurgical and thermal coal prices. However, average
premium HCC prices improved to $149/t during the Quarter, 8% higher
than the preceding December 2019 period (FY2019 Q3: $203/t). Demand
for South African coal remained robust and the average API4 price
for the Quarter was $79/t, slightly lower than the $83/t recorded
in Q3 FY2019 (FY2020 Q2: $76/t).
Corporate
Brenda Berlin, the Company's Chief Financial Officer was
appointed Acting CEO during the Quarter. This followed the
resignation of David Brown as CEO and executive director.
Brenda Berlin
Chief Executive Officer
This announcement has been approved by the Company's Disclosure
Committee.
This announcement is inside information for the purposes of
Article 7 of Regulation 596/2014.
For more information contact:
Brenda Berlin Chief Executive Officer 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
James Duncan 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). Vele Colliery (semi-soft 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 does 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.
MC Mining has ensured that the mineral resources quoted are
subject to good governance arrangements and internal control. The
Company has engaged external independent consultants to update the
mineral resource in accordance with the JORC Code 2012 and SAMREC
2016. The units of measure in this report are metric, with Tonnes
(t) = 1,000kg. Technical information that requires subsequent
calculations to derive subtotals, totals and weighted averages may
involve a degree of rounding and consequently introduce an error.
Where such errors occur MC Mining does not consider them to be
material.
Tenements held by MC Mining and its Controlled Entities
Project Name Tenement Number Location Interest Change during Quarter
------------------------------ ------------------------------- ---------------- --------- ----------------------
Chapudi Project* Albert 686 MS Limpopo 74%
Bergwater 712 MS 74%
Remaining Extent and Portion 2
of Bergwater 697 MS 74%
Blackstone Edge 705 MS 74%
Remaining Extent & Portion 1
of Bluebell 480 MS 74%
Remaining Extent & Portion 1
of Bushy Rise 702 MS 74%
Castle Koppies 652 MS 74%
Chapudi 752 MS 74%
Remaining Extent, Portions 1,
3 & 4 of Coniston 699 MS 74%
Driehoek 631 MS 74%
Remaining Extent of
Dorps-rivier 696 MS 74%
Enfield 512 MS (consolidation
of Remaining Extent of
Enfield 474 MS, Brosdoorn 682
MS & Remaining
Extent of Grootvlei 684 MS) 74%
Remaining Extent and Portion 1
of 74%
Grootboomen 476 MS 74%
Grootvlei 684 MS 74%
Kalkbult 709 MS 74%
Remaining Extent, Remaining
Extent of Portion 2,
Remaining Extent of Portion
3, Portions 1,
4, 5, 6, 7 & 8 of Kliprivier
692 MS 74%
Remaining Extent of Koodoobult
664 MS 74%
Koschade 657 MS (Was Mapani
Kop 656 MS) 74%
Malapchani 659 MS 74%
Mapani Ridge 660 MS 74%
Melrose 469 MS 74%
Middelfontein 683 MS 74%
Mountain View 706 MS 74%
M'tamba Vlei 654 MS 74%
Remaining Extent & Portion 1
of Pienaar 635 MS 74%
Remaining Extent & Portion 1
of Prince's Hill 704 MS 74%
Qualipan 655 MS 74%
Queensdale 707 MS 74%
Remaining Extent & Portion 1
of Ridge End 662 MS 74%
Remaining Extent & Portion 1
of Rochdale 700 MS 74%
Sandilands 708 MS 74%
Portions 1 & 2 of Sandpan 687
MS 74%
Sandstone Edge 658 MS 74%
Remaining Extent of Portions 2
& 3 of Sterkstroom 689 MS 74%
Sutherland 693 MS 74%
Remaining Extent & Portion 1
of Varkfontein 671 MS 74%
Remaining Extent, Portion 2,
Remaining Extent of Portion 1
of Vastval 477 MS 74%
Vleifontein 691 MS 74%
Ptn 3, 4, 5 & 6 of Waterpoort
695 MS 74%
Wildebeesthoek 661 MS 74%
Woodlands 701 MS 74%
------------------------------- ----------------------------------------------- --------- ----------------------
Kanowna West and
Kalbara M27/41 Coolgardie^ 2.99%
----------------
M27/47 2.99%
-----------------------------------------------
M27/59 2.99%
M27/72,27/73 2.99%
M27/114 2.99%
M27/181 7.24%
M27/196 2.99%
M27/414,27/415 2.99%
P27/1826-1829 2.99%
P27/1830-1842 2.99%
P27/1887 2.99%
------------------------------- ----------------------------------------------- --------- ----------------------
Abbotshall Royalty ML63/409,410 Norseman^ Royalty
------------------------------ ------------------------------- ---------------- --------- ----------------------
Kookynie Royalty ML40/061 Leonora^ Royalty
------------------------------
ML40/135,136 Royalty
------------------------------ ------------------------------- ---------------- --------- ----------------------
Makhado Project Fripp 645 MS Limpopo 69%(#)
Lukin 643 MS 69%(#)
Mutamba 668 MS 69%(#)
Salaita 188 MT 69%(#)
Tanga 849 MS 69%(#)
Daru 848 MS 69%(#)
Windhoek 847 MS 69%(#)
Generaal Project* Beck 568 MS-- Limpopo 74%
Bekaf 650 MS- 74%
Remaining Extent & Portion 1
of Boas 642 MS- 74%
Chase 576 MS- 74%
Coen Britz 646 MS- 74%
Fanie 578 MS- 74%
Portions 1, 2 and Remaining
Extent of Generaal 587 MS- 74%
Joffre 584 MS- 74%
Juliana 647 MS 74%
Kleinenberg 636 MS- 74%
Remaining Extent of Maseri Pan
520 MS- 74%
Remaining Extent and Portion 2
of Mount Stuart 153 MT-- 100%
Nakab 184 MT-- 100%
Phantom 640 MS-- 74%
Riet 182 MT-- 100%
Rissik 637 MS- 100%
Schuitdrift 179 MT- 100%
Septimus 156 MT-- 100%
Solitude 111 MT- 74%
Stayt 183 MT-- 100%
Remaining Extent & Portion 1
of Terblanche 155 MT-- 100%
Van Deventer 641 MS- 74%
Wildgoose 577 MS- 74%
------------------------------- ----------------------------------------------- --------- ----------------------
Mopane Project* Ancaster 501 MS-- Limpopo 100%
Banff 502 MS- 74%
Bierman 599 MS- 74%
Cavan 508 MS 100%
Cohen 591 MS-- 100%
Remaining Extent, Portions 1 &
2 of Delft 499 MS- 74%
Dreyer 526 MS-- 74%
Remaining Extent of Du Toit
563 MS- 74%
Faure 562 MS 74%
Remaining Extent and Portion 1
of Goosen 530 MS -- 74%
Hermanus 533 MS- 74%
Jutland 536 MS-- 100%
Krige 495 MS- 74%
Mons 557 MS- 100%
Remaining Extent of Otto 560
MS (Now Honeymoon)- 74%
Remaining Extent & Portion 1
of Pretorius 531 MS- 74%
Schalk 542 MS- 74%
Stubbs 558 MS- 100%
Ursa Minor 551 MS-- 74%
Van Heerden 519 MS-- 74%
Portions 1, 3, 4, 5, 6, 7, 8,
9, Remaining Extent of
Portion 10, Portions 13, 14,
15, 16,
17, 18, 19, 20, 21, 22, 23,
24, 26, 27, 29, 30, 35, 36,
37, 38, 39, 40, 41, 44, 45,
46, 48,
49, 50, 51, 52 & 54 of Vera
815 MS 74%
Remaining Extent of Verdun 535
MS- 74%
Voorburg 503 MS- 100%
Scheveningen 500 MS- 74%
Uitkomst Colliery and Portion 3 (of 2) of
prospects Kweekspruit No. 22 KwaZulu-Natal 70%
Portion 8 (of 1) of
Kweekspruit No. 22 70%
Remainder of Portion 1 of
Uitkomst No. 95 70%
Portion 5 (of 2) of Uitkomst
No. 95 70%
Remainder Portion1 of Vaalbank
No. 103 70%
Portion 4 (of 1) of Vaalbank
No. 103 70%
Portion 5 (of 1) of Vaalbank
No. 103 70%
Remainder of Portion 1 of
Rustverwacht No. 151 70%
Remainder of Portion 2 of
Rustverwacht No. 151 70%
Remainder of Portion 3 (of 1)
of Rustverwacht No. 151 70%
Portion 4 (of 1) Rustverwacht
No.151 70%
Portion 5 (of 1) Rustverwacht
No. 151 70%
Remainder of Portion 6 (of 1)
of Rustverwacht No. 151 70%
Portion 7 (of 1) of
Rustverwacht No. 151 70%
Portion 8 (of 2) of
Rustverwacht No. 151 70%
Remainder of Portion 9 (of 2)
of Rustverwacht No. 151 70%
Portion 11 (of 6) of
Rustverwacht No. 151 70%
Portion 12 (of 9) of
Rustverwacht No. 151 70%
Portion 13 (of 2) of
Rustverwacht No. 151 70%
Portion 14 (of 2) of
Rustverwacht No. 151 70%
Portion 15 (of 3) of
Rustverwacht No. 151 70%
Portion 16 (of 3) of
Rustverwacht No. 151 70%
Portion 17 (of 2) of
Rustverwacht No. 151 70%
Portion 18 (of 3) of Waterval
No. 157 70%
Remainder of Portion 1 of
Klipspruit No. 178 70%
Remainder of Portion 4 of
Klipspruit No. 178 70%
Remainder of Portion 5 of
Klipspruit No. 178 70%
Portion 6 of Klipspruit No.
178 70%
Portion 7 (of 1) of Klipspruit
No. 178 70%
Portion 8 (of 1 )of Klipspruit
No. 178 70%
Portion 9 of Klipspruit No.
178 70%
Remainder of Portion 10 (of 5)
of Klipspruit No. 178 70%
Portion 11 (of 5) of
Klipspruit No. 178 70%
Portion 13 (of 4) of
Klipspruit No. 178 70%
Remainder of Portion 14 of
Klipspruit No. 178 70%
Portion 16 (of 14) of
Klipspruit No. 178 70%
Portion 18 of Klipspruit No.
178 70%
Portion 23 of Klipspruit No.
178 70%
Remainder of Portion 1 of
Jackalsdraai No. 299 70%
Remainder of Jericho B No. 400 70%
Portion 1 of Jericho B No. 400 70%
Portion 2 of Jericho B No. 400 70%
Portion 3 of Jericho B No. 400 70%
Remainder of Jericho C No. 413 70%
Portion 1 of Jericho C No. 413 70%
Remainder of Portion 1 of
Jericho A No. 414 70%
Remainder of Portion 2 (of 1)
of Jericho A No. 414 70%
Portion 3 (of 1) of Jericho A
No. 414 70%
Portion 4 (of 1) of Jericho A
No. 414 70%
Portion 5 (of 2) of Jericho A
No. 414 70%
Portion 6 (of 1) of Jericho A
No. 414 70%
Margin No. 420 70%
Portions of Overvlakte 125 MS
(Remaining Extent, 3, 4, 5,
Vele Colliery and prospects 6, 13, 14) Limpopo 100%
Bergen Op Zoom 124 MS 100%
Semple 155 MS 100%
Voorspoed 836 MS 100%
Alyth 837 MS 100%
------------------------------- ----------------------------------------------- --------- ----------------------
Certain portions of Unsurveyed
Tshikunda State Land known as Mutale Limpopo 60%
------------------------------ ------------------------------- ---------------- --------- ----------------------
* Form part of the Greater Soutpansberg Projects
- Lapsed - Mining Right Application Lodged
-- Valid - Mining Right Application Lodged
Tenement located in the Republic of South Africa
^ Tenement located in Australia
(#) MC Mining's interest will reduce to 69% on completion of the
26% Broad Based Black Economic Empowerment (BBBEE) transaction
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
DRLIIMFTMTBTMRM
(END) Dow Jones Newswires
April 24, 2020 02:21 ET (06:21 GMT)
Mc Mining (LSE:MCM)
Historical Stock Chart
From May 2024 to Jun 2024
Mc Mining (LSE:MCM)
Historical Stock Chart
From Jun 2023 to Jun 2024
