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RNS Number : 5884E
MC Mining Limited
14 March 2022
ANNOUNCEMENT
14 March 2022
HALF-YEAR RESULTS FOR PERIOD ENDING 31 DECEMBER 2021
MC Mining Limited (MC Mining or the Company) is pleased to
provide its interim financial report for the six months ended 31
December 2021 (the Period). All figures are denominated in United
States dollars unless otherwise stated and the full report is
available on the Company's website, www.mcmining.co.za .
Financial review
-- The loss after tax for the Period was $0.8 million or 0.54
cents per share (FY2021 H1: loss after tax of $2.7 million or 1.80
cents per share);
-- Revenue of $13.0 million (FY2021 H1: $8.8 million) and cost
of sales of $10.9 million (FY2021 H1: $9.2 million) resulted in a
gross profit of $2.1 million (FY2021 H1: gross loss $0.4 million)
for the Period;
-- Employee benefit expense of $1.2 million (FY2021 H1: $1.0 million);
-- Other expenses of $1.7 million (FY2021 H1: $1.3 million); and
-- As at 31 December 2021, the Company had cash and cash
equivalents of $1.9 million compared to cash and cash equivalents
of $1.0 million at 30 June 2021.
Operational review
FY2022 H1 FY2021 H1 % r
Production tonnages
Uitkomst ROM coal (t) 227,448 246,229 (8%)
Sales tonnages
Own ROM coal (t) 107,953 127,534 (15%)
Middlings sales (t) 11,655 11,569 1%
119,608 139,103 (14%)
Financial metrics
Revenue/t ($) 109 62 76%
Production costs/saleable tonnes ($) 85 54 57%
-------------------------------------- ---------- ---------- ------
-- The Uitkomst metallurgical and thermal coal mine (Uitkomst
Colliery or Uitkomst) sold 107,953 tonnes (t) of high quality
metallurgical and thermal coal during the Period (FY2021 H1:
127,534t);
-- An additional 11,655t of high-ash middlings were sold during the Period (FY2021 H1 11,569t);
-- The higher global demand for coal post the COVID-19 pandemic
resulted in a significant increase in international prices with an
average API4 coal price of $151/t for the Period (H1 FY2021:
$64/t);
-- The Company continues to progress a number of debt/equity
funding initiatives to raise the additional funding required to
develop the Makhado hard coking coal project (Makhado Project or
Makhado) ;
-- Limited activities at MC Mining's other projects, being the
Vele semi-soft coking and thermal coal colliery and Greater
Soutpansberg Projects (collectively, the Limpopo Projects), which
remain in various stages of development;
-- An improved safety record with three lost-time injuries
(LTIs) reported at Uitkomst during the Period (FY2021 H1: four
LTIs). No LTIs were reported at the Makhado or Limpopo Projects;
and
-- The Company recorded 17 positive COVID-19 cases (FY2021 H1:
27 positive COVID-19 cases) at Uitkomst, Makhado and Limpopo
Projects during the Period.
Corporate features
-- The Industrial Development Corporation of South Africa
Limited (IDC) has provided longstanding commitment to the
development of Makhado and has provided a loan of $10.0 million
(ZAR160 million) (excluding interest). This funded the progress of
the project to its fully-permitted status as well as to partially
fund the acquisition of the surface rights over the project area.
During the Period, the IDC extended the date for repayment to 31
January 2022 and subsequent to the end of the Period, this was
further extended to 30 November 2022.
-- During July 2019 the IDC granted MC Mining a conditional
$15.4 million (ZAR245 million) term loan facility for the
development of the Makhado Project. During the Period the terminal
draw down date for this facility was extended from 31 July 2021 to
31 January 2022. The IDC subsequently further extended the terminal
draw down date to 30 November 2022, subject to the bank confirming
its due diligence.
Further subsequent events
-- Completion of the acquisition of the Lukin and Salaita
properties, being the key surface rights for the Makhado Project,
with the settlement of the deferred balance of $2.6 million
(ZAR40.6 million) at the end of February 2022.
-- Staged $5.7 million (ZAR86 million) Convertible Advance and
Subscription Agreement (the Agreement) with South African-based
mining group, Senosi Group Investment Holdings Proprietary Limited
(SGIH). SGIH has a successful track record of developing and
operating coal mines in South Africa and the transaction is of
great significance as the Company moves closer to finalising a
funding package to develop the Makhado Project. At the date of the
interim financial report, SGIH had paid $2.7 million (ZAR40
million) in terms of the Agreement.
-- MC Mining received a notice under section 249D of the
Corporations Act 2001 (Cth) from shareholders holding approximately
6.8% of its ordinary shares between them, requesting that a general
meeting be held. An extraordinary general meeting (EGM) of the
Company has been convened for 11 April 2022 to consider the
relevant resolutions.
-- Mr Bernard Pryor resigned as Chairman of the Board and long
standing Non-Executive director Mr Khomotso Mosehla was appointed
as Chairman, pending the outcome of the scheduled 11 April 2022
EGM.
Authorised by
Sam Randazzo
CEO/Director
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:
Sam Randazzo Interim CEO MC Mining Limited +61 408 945010
Tony Bevan Company Secretary Endeavour Corporate Services +61 08 9316 9100
Company advisors:
James Harris / James Dance Nominated Adviser Strand Hanson Limited +44 20 7409 3494
Rory Scott Broker (AIM) Tennyson Securities Limited +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).
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.
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END
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