MC Mining Limited RECOMMENCEMENT OF COAL PRODUCTION (8804L)
May 05 2020 - 5:21AM
UK Regulatory
TIDMMCM
RNS Number : 8804L
MC Mining Limited
05 May 2020
ANNOUNCEMENT
5 May 2020
RECOMMENCEMENT OF COAL PRODUCTION AND LOCKDOWN UPDATE
Further to the announcements on 26 March 2020 and 24 April 2020,
MC Mining Limited ("MC Mining" or the "Company") provides a market
update with regards to the impact on the Company of the global
COVID-19 pandemic. MC Mining remains focused on taking the
necessary precautions to prevent the spread COVID-19 and reducing
the threat to our employees, contractors and stakeholders.
Operations at the Uitkomst Colliery
The South African Government issued a directive on 23 March 2020
(the "Directive") requiring a 21-day national lockdown (the
"Lockdown"), effective midnight Thursday 26 March 2020 to midnight
Thursday 16 April 2020. The Directive was as a result of a level 5
national coronavirus alert assessment and resulted in the
high-grade Uitkomst metallurgical and thermal coal mine ("Uitkomst
Colliery" or "Uitkomst") being placed on care and maintenance. The
Lockdown was subsequently extended and on 23 April 2020 the
Government announced a phased, risk-based approach to lifting
restrictions and the alert level reduced to level 4 from 1 May 2020
(the Government address can be found at:
https://www.gov.za/speeches/president-cyril-ramaphosa-south-africas-response-coronavirus-covid-19-pandemic-23-apr-2020
).
Level 4 of the Lockdown authorises some business activity,
subject to extreme precautions and under specific conditions. The
underground Uitkomst Colliery is permitted to ramp up to 50% of
labour capacity and must adhere to detailed health and safety
protocols and introduce workplace plans to enable disease
surveillance at site and prevent the spread of infection.
The Department of Mineral Resources and Energy has also issued
COVID-19 directives. These require mining companies to ensure
screening of employees and where indicated, testing, and employees
who have tested positive for the virus will need to be quarantined.
All data collected during the screening and testing programme is to
be submitted to the authorities.
The Uitkomst Colliery has implemented standard operating
procedures that comply with the required measures and limited
activities at the mine recommenced on 4 May 2020. Uitkomst is a
mechanised underground operation and it will be possible to ramp-up
to 50% capacity within 7 to 10 days. During this period the
colliery will assess the effects that the Lockdown has had on
critical suppliers while the coal off-take market remains
challenging due to the restrictions imposed on businesses. Uitkomst
is in constant communication with its customers to ensure their
requirements are met and the colliery is only expected to return to
full operating capacity following further reductions in the
national coronavirus alert assessments and once coal off-takes have
normalised.
Effects of the Lockdown on MC Mining's other sites
The Lockdown also impacted activities at the Makhado, Vele and
Greater Soutpansberg Projects as well as the Company's corporate
office and led to the implementation of business continuity
measures as well as stringent health and safety procedures. This
also resulted in the Company having to implement a 'no work, no
pay' policy for non-essential staff and a portion of wages were
paid by the Government's Temporary Employee/Employer Relief Scheme,
reducing the adverse financial impacts that the Lockdown is having
on staff. The Company has also adopted a work-from-home strategy
and where possible, staff will continue to work remotely.
Available cash & facilities
T he Company has an available cash balance of US$1.1 million as
well as the US$6.5 million (R120 million) second tranche of the
existing Industrial Development Corporation of South Africa Limited
loan available for drawdown. MC Mining is engaged in discussions
with its lender group regarding drawdown from existing and
potential new finance facilities . As previously communicated, the
Company is also in the process of securing the balance of the
funding required to commence construction of Phase 1 of the fully
permitted Makhado hard coking coal project and this is expected to
be completed in Q2/Q3 CY2020.
Br enda Berlin, the Company's CEO, commented: "The move to
Lockdown level 4 facilitates Uitkomst resuming production of its
high-grade coal, albeit at 50% of normal production. Safety of our
people is critical and normalised operating activities at the
Uitkomst Colliery and MC Mining's other sites will only resume when
it is safe to do so and in line with Government regulations. Where
possible, key activities for rest of the Group will continue
remotely in isolated, safe environments and we remain very mindful
of the economic toll that the pandemic has on our employees and
their families.
The Company continues to interact with potential domestic and
international capital-providers to secure the balance of funding
required to commence development of Makhado Phase 1 and anticipates
that the process will be completed in Q2/Q3 CY2020 ."
Brenda Berlin
Chief Executive Officer
This announcement has been approved by the Company's Disclosure
Committee.
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
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.
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contact rns@lseg.com or visit www.rns.com.
END
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