MC Mining Limited Extension of Coal Sales & Marketing Agreement (3672K)

TIDMMCM

RNS Number : 3672K

MC Mining Limited

20 December 2022

ANNOUNCEMENT 20 December 2022

EXTENSION OF THE UITKOMST COAL SALES & MARKETING AGREEMENT

RELATED PARTY TRANSACTION

MC Mining Limited (MC Mining or the Company) is pleased to announce a six-month extension (Extension) of the July 2022 Coal Sales & Marketing Agreement (Marketing Agreement or the Agreement) between the Company's subsidiary Uitkomst Colliery Proprietary Ltd (Uitkomst Colliery or Uitkomst) and Overlooked (Proprietary) Limited (Overlooked). The Marketing Agreement was due to expire on 31 December 2022 and has now been extended to 30 June 2023, with the key terms of the Marketing Agreement remaining.

The prevailing anti-fossil fuel sentiment and invasion of Ukraine earlier in 2022 has resulted in a global energy shortage and record international thermal coal prices. The coal sold between July and November 2022 under the terms of the Agreement, realised an average free-on-board price of $237/t, significantly higher than domestic coal sales prices.

The salient features of the Marketing Agreement and the Extension thereof are:

   --    contract now expiring in June 2023;

-- from 1 January 2023, sale of a minimum of 15,000t of Uitkomst coal per month at API4-linked, US dollar denominated prices;

-- Overlooked is responsible for the transportation, stockpiling and export of the coal at port and will receive a market related commission; and

-- Overlooked charges a competitive marketing fee of 5% of the sales price, which is reasonable considering competing proposals received by Uitkomst, for providing access to the international market.

Related Party Transaction

The Extension is deemed a related party transaction under the AIM Rules for Companies due to Mr Matthews Senosi (a Non-Executive Director and Substantial Shareholder (as defined by the AIM Rules) of the Company) being the Chief Executive Officer and majority shareholder of Overlooked. The independent directors of the Board of MC Mining, being those directors other than Mr Senosi, having consulted with Strand Hanson Limited, the Company's Nominated Adviser, consider the Extension to be fair and reasonable insofar as the Company's shareholders are concerned.

Godfrey Gomwe , Managing Director and Chief Executive Officer of MC Mining, commented :

"Uitkomst produces high quality coal but does not produce sufficient volumes to fill a ship on a monthly basis and the partnership with Overlooked has generated significant benefits for Uitkomst, facilitating an export route to market and access to higher international thermal coal prices. The sale of the initial 120,000t is not expected to be completed by the end of December 2022, mainly due to shipping delays, with 36,764t currently stockpiled at the harbour and the remaining 11,281t at Uitkomst. The Uitkomst Colliery continues to supply coal to the local market, but at reduced volumes."

Godfrey Gomwe

Managing Director and Chief Executive Officer

This announcement has been approved by the Company's Disclosure Committee.

All figures are in United States dollars unless otherwise stated.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014, as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended).

 
  For more information contact: 
   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                    +44 20 7186 9031 
   Marion Brower           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).

All figures are denominated in United States dollars unless otherwise stated. Safety metrics are compared to the preceding quarter while financial and operational metrics are measured against the comparable period in the previous financial year. A copy of this report is available on the Company's website, www.mcmining.co.za .

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

AGRFLFSSFFLIFIF

(END) Dow Jones Newswires

December 20, 2022 10:00 ET (15:00 GMT)

Mc Mining (LSE:MCM)
Historical Stock Chart
From May 2024 to Jun 2024