TIDMMCM

RNS Number : 3365N

MC Mining Limited

29 January 2021

Appendix 5B

Mining exploration entity or oil and gas exploration entity

quarterly cash flow report

 
 Name of entity 
------------------------------------------------------------------ 
              MC Mining Limited 
 ABN                             Quarter ended ("current quarter") 
----------------------------    ---------------------------------- 
              98 008 905 388                  31 December 2020 
                                ---------------------------------- 
 
 
 Consolidated statement of cash                          Current quarter   Year to date 
  flows                                                                     (six months) 
                                                             $USD'000         $USD'000 
               1.   Cash flows from operating 
                     activities 
 1.1                Receipts from customers                        4,095           8,068 
 1.2                Payments for 
                    (a) exploration & evaluation 
                    (b) development 
                    (c) production                               (4,215)         (8,189) 
                    (d) staff costs                                (635)         (1,065) 
                    (e) administration and corporate 
                     costs                                       (1,082)         (1,883) 
 1.3                Dividends received (see note 
                     3) 
 1.4                Interest received                                  -               - 
                    Interest and other costs of 
 1.5                 finance paid                                   (54)            (66) 
 1.6                Income taxes paid 
 1.7                Government grants and tax 
                     incentives 
                    Other (provide details if 
 1.8                 material)                                       (9)               1 
                                                        ----------------  -------------- 
                    Net cash from / (used in) 
 1.9                 operating activities                        (1,900)         (3,134) 
-----------------  -----------------------------------  ----------------  -------------- 
 
 2.                      Cash flows from investing 
                          activities 
 2.1                     Payments to acquire or for: 
                    (a) entities 
                    (b) tenements 
                    (c) property, plant and equipment               (94)           (133) 
                    (d) exploration & evaluation                    (25)            (35) 
                    (e) investments                                (170)           (274) 
                    (f) other non-current assets 
 2.2                     Proceeds from the disposal 
                          of: 
                    (a) entities 
                    (b) tenements 
                    (c) property, plant and equipment                  -             510 
                    (d) investments 
                    (e) other non-current assets 
 2.3                Cash flows from loans to other 
                     entities 
 2.4                Dividends received (see note 
                     3) 
                    Other (provide details if 
 2.5                 material)                                      (48)           (110) 
                                                        ----------------  -------------- 
                    Net cash from / (used in) 
 2.6                 investing activities                          (337)            (42) 
-----------------  -----------------------------------  ----------------  -------------- 
 
 3.                 Cash flows from financing 
                     activities 
                    Proceeds from issues of equity 
                     securities (excluding convertible 
 3.1                 debt securities)                                  -             885 
 3.2                Proceeds from issue of convertible 
                     debt securities 
 3.3                Proceeds from exercise of 
                     options 
 3.4                Transaction costs related 
                     to issues of equity securities 
                     or convertible debt securities 
 3.5                Proceeds from borrowings                       2,910           4,373 
 3.6                Repayment of borrowings                         (82)           (195) 
 3.7                Transaction costs related 
                     to loans and borrowings 
 3.8                Dividends paid 
                    Other (provide details if 
 3.9                 material)                                     (235)           (453) 
                                                        ----------------  -------------- 
                    Net cash from / (used in) 
 3.10                financing activities                          2,593           4,610 
-----------------  -----------------------------------  ----------------  -------------- 
 
 4.                 Net increase / (decrease) 
                     in cash and cash equivalents 
                     for the period 
                    Cash and cash equivalents 
 4.1                 at beginning of period                        1,562             464 
                    Net cash from / (used in) 
                     operating activities (item 
 4.2                 1.9 above)                                  (1,900)         (3,134) 
                    Net cash from / (used in) 
                     investing activities (item 
 4.3                 2.6 above)                                    (337)            (42) 
                    Net cash from / (used in) 
                     financing activities (item 
 4.4                 3.10 above)                                   2,593           4,610 
                    Effect of movement in exchange 
 4.5                 rates on cash held                               46              66 
                                                        ----------------  -------------- 
                    Cash and cash equivalents 
 4.6                 at end of period                              1,964           1,964 
-----------------  -----------------------------------  ----------------  -------------- 
 
 
               5.   Reconciliation of cash and           Current quarter   Previous quarter 
                     cash equivalents                        $USD'000          $USD'000 
                     at the end of the quarter 
                     (as shown in the consolidated 
                     statement of cash flows) to 
                     the related items in the accounts 
 5.1                Bank balances                                  3,888              3,807 
 5.2                Call deposits                                     36                 32 
 5.3                Bank overdrafts                              (1,960)            (1,875) 
 5.4                Other (provide details) 
                                                        ----------------  ----------------- 
                    Cash and cash equivalents 
                     at end of quarter (should 
 5.5                 equal item 4.6 above)                         1,964              1,964 
-----------------  -----------------------------------  ----------------  ----------------- 
 
 
               6.   Payments to related parties of the entity   Current quarter 
                     and their associates                           $USD'000 
 6.1                Aggregate amount of payments to related 
                     parties and their associates included in 
                     item 1 
                                                               ---------------- 
 6.2                Aggregate amount of payments to related 
                     parties and their associates included in 
                     item 2 
                                                               ---------------- 
 Note: if any amounts are shown in items 6.1 or 6.2, your quarterly 
  activity report must include a description of, and an explanation 
  for, such payments. 
 
 
               7.   Financing facilities                       Total facility       Amount drawn 
                     Note: the term "facility'                amount at quarter     at quarter end 
                     includes all forms of financing                 end               $USD'000 
                     arrangements available to                     $USD'000 
                     the entity. Add notes as necessary 
                     for an understanding of the 
                     sources of finance available 
                     to the entity. 
 7.1                Loan facilities                                       10,914            10,914 
                                                            --------------------  ---------------- 
 7.2                Credit standby arrangements 
                                                            --------------------  ---------------- 
 7.3                Other (please specify)                                 2,876             2,677 
                                                            --------------------  ---------------- 
 7.4                Total financing facilities                            13,790            13,591 
                                                            --------------------  ---------------- 
 
                    Unused financing facilities available at 
 7.5                 quarter end                                                               204 
                                                                                  ---------------- 
 7.6                Include in the box below a description of each facility 
                     above, including the lender, interest rate, maturity date 
                     and whether it is secured or unsecured. If any additional 
                     financing facilities have been entered into or are proposed 
                     to be entered into after quarter end, include a note providing 
                     details of those facilities as well. 
-----------------  ------------------------------------------------------------------------------- 
                                 7.1 Loan Facilities $USD10.9 million: 
                                  The loan provided by the Industrial Development Corporation 
                                  of South Africa ("IDC") to the company's subsidiary was 
                                  fully draw at the end of the quarter. The drawn amount 
                                  plus interest was payable prior to 30 November 2020. The 
                                  Company has lodged a formal application to extend the 
                                  repayment period. In the unlikely event that the parties 
                                  cannot reach agreement on further deferment terms, the 
                                  financing documentation allows the debt to be converted 
                                  into equity. Interest accrues at a real after tax rate 
                                  of return of 16% on the advanced amount. 
 
                                  7.3 Other $USD2.9 million : 
                                  $USD 1.4 million relates to the ABSA Facility that was 
                                  secured during the 2019 financial year, from ABSA Bank. 
                                  The facility is for short-term working capital requirements 
                                  and potential expansion opportunities. The facility has 
                                  a floating coupon at the South African Prime rate (currently 
                                  7% per annum) plus 1.0%, with the operating mine Uitkomst 
                                  Colliery debtors ceded as security. The facility is subject 
                                  to annual review. The short-term working facility was 
                                  increased by an additional $USD 1.4 million in May 2020 
                                  to alleviate the financial challenges during the COVID-19 
                                  period. This additional facility is temporary and was 
                                  payable over twelve months commencing 1 July 2020 to 1 
                                  June 2021. During the period, the additional facility 
                                  was reduced to $USD0.8 million because of the commencement 
                                  of repayments. The Company successfully negotiated a delay 
                                  on the balance of the repayments until 1 July 2021. The 
                                  same interest rate applies. $USD0.2 million of this facility 
                                  was un-drawn at the end of the quarter. 
 
                                  The balance of $USD1.5 million relates to an equipment 
                                  lease facility with ABSA that has been fully utilised. 
                                  The lease facility has a five-year term at the South Africa 
                                  prime interest rate (currently 7% per annum). 
----------------- 
 
 
               8.   Estimated cash available for future operating                        $USD'000 
                     activities 
                    Net cash from / (used in) operating activities 
 8.1                 (item 1.9)                                                            (1,900) 
 8.2                (Payments for exploration & evaluation classified                         (25) 
                     as investing activities) (item 2.1(d)) 
 8.3                Total relevant outgoings (item 8.1 + item                              (1,925) 
                     8.2) 
 8.4                Cash and cash equivalents at quarter end                                 1,964 
                     (item 4.6) 
 8.5                Unused finance facilities available at quarter                             204 
                     end (item 7.5) 
                                                                                       ----------- 
 8.6                Total available funding (item 8.4 + item                                 2,168 
                     8.5) 
                                                                                       ----------- 
 
                    Estimated quarters of funding available 
 8.7                 (item 8.6 divided by item 8.3)                                        1.1 
                                                                                       ----------- 
                    Note: if the entity has reported positive relevant outgoings 
                     (ie a net cash inflow) in item 8.3, answer item 8.7 as 
                     "N/A". Otherwise, a figure for the estimated quarters 
                     of funding available must be included in item 8.7. 
 8.8                If item 8.7 is less than 2 quarters, please provide answers 
                     to the following questions: 
                    8.8.1 Does the entity expect that it will continue to 
                     have the current level of net operating cash flows for 
                     the time being and, if not, why not? 
                   ------------------------------------------------------------------------------- 
                                 Answer: 
                                  The Group expects to generate operating cash flows for 
                                  the March and June quarters from the significant increase 
                                  in thermal coal pricing since December 2020. The Group 
                                  is the process of a fund raising to finance development 
                                  of its flagship Makhado project and provide working capital. 
                   ------------------------------------------------------------------------------- 
                    8.8.2 Has the entity taken any steps, or does it propose 
                     to take any steps, to raise further cash to fund its operations 
                     and, if so, what are those steps and how likely does it 
                     believe that they will be successful? 
                   ------------------------------------------------------------------------------- 
                                 Answer: 
                                  A fund raising is currently in progress to finance the 
                                  development of the Makhado project and provide working 
                                  capital as referred to in 8.8.1 above. The various components 
                                  of this fund raising currently being negotiated include, 
                                  but are not limited to: 
                                   *    The issue of new equity for cash in the Company to 
                                        potential new shareholders; 
 
 
                                   *    Debt funding; 
 
 
                                   *    Contractor funding such as build, own, operate, 
                                        transfer arrangements. 
 
 
 
                                  The Group has a history of successful capital raisings 
                                  to meet funding requirements. 
                   ------------------------------------------------------------------------------- 
                    8.8.3 Does the entity expect to be able to continue its 
                     operations and to meet its business objectives and, if 
                     so, on what basis? 
                   ------------------------------------------------------------------------------- 
                                 Answer: 
                                  The recent material increase in thermal coal prices is 
                                  forecast to generate operating cash flows for the group. 
                                  The current fund raising initiatives in progress are intended 
                                  to provide working capital and to achieve the Groups objective 
                                  of becoming South Africa's first large scale hard coking 
                                  coal miner. 
                   ------------------------------------------------------------------------------- 
                    Note: where item 8.7 is less than 2 quarters, all of questions 
                     8.8.1, 8.8.2 and 8.8.3 above must be answered. 
-----------------  ------------------------------------------------------------------------------- 
 

Compliance statement

1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

   2        This statement gives a true and fair view of the matters disclosed. 

Date: ...................................................................................

Disclosure Committee

Authorised by: ...................................................................................

(Name of body or officer authorising release - see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity's activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: "By the board". If it has been authorised for release to the market by a committee of your board of directors, you can insert here: "By the [name of board committee - eg Audit and Risk Committee]". If it has been authorised for release to the market by a disclosure committee, you can insert here: "By the Disclosure Committee".

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

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January 29, 2021 02:00 ET (07:00 GMT)

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