TIDMMCM
RNS Number : 6863D
MC Mining Limited
04 March 2022
ANNOUNCEMENT 4 March 2022
DESPATCH OF NOTICE OF EXTRAORDINARY GENERAL MEETING
MC Mining Limited (the "Company") announces that the Notice of
the Extraordinary General Meeting ("EGM") and accompanying proxy
for the meeting to be held on 11 April 2022 have today been posted
to shareholders. These documents are available on the Company's
website www.mcmining.co.za .
The Company's EGM will be held at 10am (London time) on 11 April
2022 as a virtual meeting by way of a live webcast.
Details on how to attend the Company's EGM are contained in the
Notice of EGM.
If it becomes necessary or appropriate to make alternative
arrangements for holding or conducting the EGM, the Company will
make further information available via the various markets and on
our website.
The full text from the Chairman's statement from the notice of
EGM is set out below.
" Dear Shareholder,
I am writing to you in response to a notice from Dendocept
Proprietary Limited ("Dendocept") and its associates, Ms Yi
(Christine) He and her spouse Mr Jun Liu ("Requisitioning
Shareholders") requesting that the Company convene a meeting under
the Corporations Act to remove myself and Sam Randazzo as Directors
and appointing 2 nominees in our place, namely Mr Nhlanhla Nene and
Mr Godfrey Gomwe (the "Notice"). This is not a meeting that has
been requested by your Board.
It is important that I give you a short history of the
circumstances leading up to the receipt of the Notice, so that you
are fully informed before you decide how to vote.
Your vote against each resolution would retain the existing
Board. If you vote in favour of the resolutions, this would have
the effect of removing myself and Mr Randazzo from the Board and
electing Mr Nhlanhla Nene and Mr Godfrey Gomwe in our place.
The Requisitioning Shareholders Statement included in Schedule 4
to the Notice of Meeting makes assertions which I believe are
without merit and therefore wish to address. It is my view that
since entering into a ZAR86 million capital raising with respected
South African mining group, Senosi Group Holdings Proprietary
Limited ("SGIH") the Company is now well placed to finalise a
financing package to fund the development of the Makhado project.
In fact, it is the Board's view (other than Mr Zhen He who has not
expressed his view on this) that the Company is now in the best
financial and corporate condition it has been for several
years.
Prior to entering into the ZAR86 million capital raising
agreement, as announced on 1 February 2022 with SGIH, of which
ZAR40 million has already been advanced, your Company had received
and was negotiating a funding offer from Dendocept which was to
provide ZAR60 million of funding in the form of a loan convertible
into the Company's Shares at a 30% discount to the 30 -- day VWAP
of the Company's Shares at the time of conversion.
In acting in the best interests of all Shareholders, the Board
resolved to enter into the funding agreement with SGIH and not
Dendocept for the following reasons:
(a) the SGIH funding agreement provided an additional ZAR26
million of funding than Dendocept had offered;
(b) SGIH's involvement in coal mine development, operations and
marketing will provide significant tangible and intangible benefits
for the Company in its advancement to development of the Makhado
project. SGIH is a substantial mining house with investments in
coal mining, contract mining, commodity trading, gold mining,
energy, engineering and property;
(c) the conditions precedent that were proposed pursuant to the
Dendocept offer made it difficult for the Company to know when it
would actually receive the loan funds. It was very important for
the Company to be clear on when it would receive the loan funds as
the Company's subsidiary that owns the Makhado project, had to
repay the ZAR35 million outstanding balance to the vendors of the
surface rights at the Makhado project site. The Company however had
certainty under the SGIH funding agreement to pay the ZAR35 million
obligation. The outstanding amount owing to the vendors of the
surface rights at the Makhado project site has now been paid using
funds advanced by SGIH; and
(d) the issue price of ZAR1.20 per Share under the SGIH funding
agreement represented a premium of 7% to the Company's Share price
at the time the agreement was signed as opposed to the 30% discount
that Dendocept offered. At the current Share price (ZAR1.05), the
price paid by SGIH represents a 14.3% premium to market. A 30%
discount to the current ZAR1.05 Share price equates to Dendocept
paying just ZAR0.735 per Share. The pricing of Shares under the
Dendocept offer was therefore around 38% less than what SGIH is
paying for each Share. This
difference is significant for all Shareholders.
The timing of the Notice seeking to remove myself and Mr
Randazzo came just 2 weeks after the SGIH capital raising offer was
announced.
I will leave it to Shareholders to form their own view on what
has motivated the Requisitioning Shareholders to remove Mr Randazzo
and myself from the Board and appoint 2 of their nominees in our
place. It should be noted that the Notice makes reference to a lack
of progress by the Company and I question why the Requisitioning
Shareholders have not targeted the whole Board rather than only two
Directors.
Current Company director, Mr Zhen He is the brother of
Requisitioning Shareholder, Ms Yi He. Therefore, if the resolutions
are passed and two of the Requisitioning Shareholder nominee
directors are appointed, they will have 2 additional nominees.
Furthermore, independent directors, Mr Andrew Mifflin and Mr
Khomotso Mosehla have informed the Board that they intend to resign
their directorship if the resolutions are passed.
Accordingly, if the resolutions are passed the Requisitioning
Shareholders will have two nominee directors and one associated
director. This is an unreasonably high number of nominee and
associated directors (3 out of 5 or 60% of the total Board)
connected to the Requisitioning Shareholders, who collectively hold
just a 6.8% shareholding in the Company. It is therefore reasonable
to assume that if the resolutions are passed there will be a change
of control of MC Mining without payment of a control premium. If a
nominee of SGIH is appointed to the Board after this meeting in
accordance with SGIH's rights under its funding agreement, this
will result in the number of Directors increasing to 6, in which
case the nominee and associated directors would be 3 out of 6 of
the total Board.
The majority of the Board (other than Mr Zhen He who has not
expressed his view on this) have conveyed their full confidence in
myself and Mr Randazzo, have confirmed their support of us
remaining as directors of the Company and are recommending that
Shareholders vote against all resolutions.
Your Board recommends that Shareholders vote
AGAINST
all of the proposed resolutions
We appreciate your continued support of the Board and your
patience while we deal with this unwelcomed Shareholder
requisition.
We look forward to delivering to Shareholders value through the
imminent development of the Makhado project and
ask for your support, by voting AGAINST all the proposed resolutions.
Yours sincerely
Bernard Pryor
Non -- Executive Chairman"
Authorised by
Tony Bevan
Company Secretary
This announcement has been approved by the Company's Disclosure
Committee .
ASX: MCM / AIM: MCM.L / JSE: MCZ
For more information contact:
Sam Randazzo Interim Chief Executive Officer MC Mining Limited +61 408 945010
Tony Bevan Company Secretary Endeavour Corporate Services +618 9316 9100
Company advisors:
James Harris / James Dance Nominated Adviser Strand Hanson Limited +44 20 7409 3494
Rory Scott Broker (AIM) Tennyson Securities +44 20 7186 9031
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 and thermal
coal), Makhado Project (hard coking coal). Vele Colliery (semi-soft
coking and thermal coal), and the Greater Soutpansberg Projects
(coking and thermal coal).
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END
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