MC Mining Limited RESTRUCTURING OF THE CURRENT IDC LOAN (1272S)
July 06 2020 - 9:00AM
UK Regulatory
TIDMMCM
RNS Number : 1272S
MC Mining Limited
06 July 2020
ANNOUNCEMENT
6 July 2020
RESTRUCTURING OF THE CURRENT IDC LOAN
MC Mining Limited ("MC Mining" or the "Company") is pleased to
announce the conclusion of a conditional loan restructuring
agreement (the "Agreement") with the Industrial Development
Corporation of South Africa Limited ("IDC"). The Agreement also
includes the Company's subsidiary, Baobab Mining and Exploration
Proprietary Limited ("Baobab"), the owner of the Makhado hard
coking coal project ("Makhado Project" or "Makhado").
The Company secured a R240 million ($13.7 million*) loan
facility (the "Initial IDC Facility") from the IDC in March 2017.
This facility was granted to develop the Makhado Project and
resulted in the IDC becoming a 5% shareholder in Baobab and also
receiving warrants equating to 2.5% of the Company's issued share
capital. MC Mining previously utilized R120 million ($6.9 million)
(the "First Tranche") of the Initial IDC Facility to develop
Makhado, including progressing the project to fully permitted
status and completing the acquisition of the surface rights
required for the Makhado mining area. The balance of R120 million
($6.9 million) remained undrawn ("Second Tranche").
Phase 1 of the Makhado Project has a nine-year life-of-mine and
is forecast to produce 540,000 tonnes ("t") of hard coking coal
annually as well as 570,000t of an export quality thermal coal
by-product. The project has robust fundamentals that generate
compelling returns. As previously announced, the Company is in
advanced discussions to secure R535million ($30.6 million), being
the capital and working capital required to construct Phase 1.
Significant progress was made prior to the March 2020 COVID-19
lockdown, including the conclusion of a further R245 million ($14.0
million) loan facility ("Phase 1 Loan Facility") from the IDC, the
initial step in the Phase 1 composite debt/equity funding
package.
One of the conditions precedent to the Phase 1 Loan Facility was
that the Company would agree to cancel the undrawn Second Tranche
of the Initial IDC Facility. The IDC has now agreed that the
Company may drawdown R40 million ($2.3 million) of the Second
Tranche and the Phase 1 Loan Facility can still form part of the
composite Makhado Phase 1 funding package provided the R40 million
is repaid prior to 30 November 2020. In addition, the Agreement
delays repayment of the First Tranche, plus accrued interest, until
November 2020. The drawdown of the R40 million under the Agreement
will result in the IDC's participation in the Makhado Project
increasing by a further 1.7% interest in Baobab (taking their total
project level interest to 6.7%) and the award of warrants equating
to 0.8% of MC Mining's issued shares. The Agreement is conditional
upon the Company raising R15.0 million ($0.9 million) in the form
of new equity and the Company is actively speaking to shareholders
and prospective new investors in order to secure this
investment.
Br enda Berlin, MC Mining's Acting CEO, commented: "The Company
made significant progress in securing the capital required for
Phase 1 prior to the COVID-19 lockdown. The execution of the
complete Phase 1 composite funding package was delayed due to
COVID-19 and the restructuring of the Initial IDC Facility pursuant
to the Agreement gives the Company the time it needs to conclude
the funding process. The restructuring also delays the repayment of
the First Tranche and negotiations are ongoing to align this
payment with the positive cash flows generated by Makhado.
We have initiated discussions to raise the $0.9 million in
equity and positive feedback has already been received for a
significant portion. The debt restructuring is expected to be
completed during July/ August 2020 while the process to secure the
balance of the Phase 1 funding continues. We anticipate that this
will be completed during H2 CY2020, with commencement of the
nine-month construction period soon thereafter. "
Brenda Berlin
Acting 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.
* All figures are in South African rand or United States dollars
unless otherwise stated.
For more information contact:
Brenda Berlin Acting 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.
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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