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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mc Mining Limited | LSE:MCM | London | Ordinary Share | AU000000MCM9 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 7.75 | 7.50 | 8.50 | 8.00 | 7.75 | 7.75 | 1,292 | 16:35:12 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Bitmns Coal Undergrnd Mining | 46.06M | -4.32M | -0.0106 | -15.09 | 65.26M |
From Apr 2021 to Apr 2024
TIDMMCM
RNS Number : 0539H
MC Mining Limited
30 July 2021
ANNOUNCEMENT
30 July 2021
ACTIVITIES REPORT FOR THE QUARTERED 30 JUNE 2021
FOR
MC Mining Limited (" MC Mining" or the "Company") and its subsidiary companies
HIGHLIGHTS
-- Health and safety remain a priority at MC Mining and its subsidiary companies, with one lost-time injury ("LTI") recorded during the quarter (FY2021 Q3: one LTI);
-- Measures implemented to restrict the spread of the COVID-19 virus within the MC Mining group workplace are proving successful with only two employees (Q3 FY2021: nine) contracting the virus during the quarter;
-- The Industrial Development Corporation of South Africa Limited ("IDC"), on 30 July 2021, confirmed the repayment date for the R160 million ($11.3 million) loan plus accrued interest has been extended to 31 January 2022;
-- The terminal drawdown date of the additional R245 million ($17.3 million) IDC term loan for the development of Phase 1 of the Makhado hard coking coal project ("Makhado Project" or "Makhado"), was also extended to 31 January 2022, subject to the IDC re-affirming its financial due diligence;
-- Run-of-mine ("ROM") coal production at the high grade Uitkomst metallurgical and thermal coal mine ("Uitkomst Colliery" or "Uitkomst") was 208% higher than the June 2020 quarter (FY2021 Q4: 127,927 tonnes ("t") vs. FY2020 Q4: 41,536t) due to the South African Government-imposed COVID-19 lockdown for a large part of the comparative period.
-- 90,858t of coal sales during the quarter (FY 2020 Q4: 19,429t) comprising 84,834t (FY 2020 Q4: 16,707t) of high grade metallurgical and thermal coal and 6,024t (FY 2020 Q4: 2,722t) of lower grade middlings coal;
-- The API4 coal price averaged $105/t during the quarter compared to $55/t in Q3 FY2020 and the price is forecast to remain high for the balance of CY2021 as the post-pandemic world economic recovery fuels greater demand for coal ;
-- Revenue per tonne increased by 47% to $84.91/t (FY2020 Q4: $57.88/t) due to the much higher API4 coal prices recorded during the quarter ($105/t vs. $55/t);
-- Limited activities were undertaken at the Company's Makhado Project, Vele semi-soft coking and thermal coal colliery ("Vele Colliery" or "Vele") and Greater Soutpansberg Projects ("GSP") during the quarter;
-- Makhado Project composite debt/equity funding initiatives, including detailed due diligence processes, continued during the quarter; and
-- Available cash at quarter-end was $3.2 million ($2.3 million at the end of March 2021) and restricted cash was $0.03 million.
COMMENTARY
A number of parties are in advanced stages of their due diligence for the balance of the funding required to develop the Makhado Project. The Company remains confident that the parties taking part in the process will commit the necessary funds to complete the funding package.
T he IDC reaffirmed their support for the Makhado Project by formally extending the repayment date of the existing R160 million ($11.3 million) loan to 31 January 2022. The IDC also agreed to extend the terminal draw down date for the conditional R245 million ($17.3 million) Makhado Project development term loan facility, to 31 January 2022, subject to the bank confirming its due diligence.
COVID-19
The heal th and safety of the MC Mining group's employees and its contractors is a priority and measures previously implemented to prevent the spread of COVID-19 remain in place. During the quarter, two Uitkomst employees tested positive for the virus (FY2021 Q3: nine positive tests). No positive COVID-19 cases were reported at the Makhado, Vele and GSP projects.
Uitkomst Colliery - Utrecht Coalfields (70% owned)
One LTI was recorded during the quarter (FY2021 Q3: one LTI).
The Uitkomst Colliery generated 127,927t of ROM coal during the quarter, 208% higher than in the comparative Q4 FY2020 period. Production during Q4 FY2020 was limited due to the South African Government-imposed lockdown, introduced to reduce the spread of COVID-19, that resulted in the temporary suspension of activities at the colliery and its customers .
Coal sales to Uitkomst's largest customer returned to normal levels during the quarter, following that customer experiencing equipment breakdowns during Q3 FY2021 and compared to lower sales levels during the comparative COVID-19 lockdown period in Q4 FY2020.
Sales of higher-value coal were therefore significantly above the Q4 2020 comparative period (84,834t vs. 16,707t). The Uitkomst Colliery also sold 6,024t of high ash middlings coal during the quarter (FY2020 Q4: 2,722t). The sales volumes during the quarter were augmented by the sale of coal stockpiles carried over from the preceding period and Uitkomst had 8,753t of saleable coal on hand at the end of the quarter (FY2021 Q3: 20,494t) .
Increased global demand has led to the API4 export coal price recovery from the low prices experienced during the COVID-19 induced economic downturn in CY2020. Average US-dollar denominated API4 prices was 91% higher in the quarter ($105/t vs $55/t) and, as a consequence, Uitkomst's average revenue per tonne increased by 47% to $84.91/t (FY2020 Q4: $57.88/t) with this improvement somewhat offset by the strengthening of the rand against the dollar (FY2021 Q4: R14.14 vs. FY2020 Q4: R17.97 to US$1.00).
Production costs per saleable tonne decreased 45% to $56.74/t (FY2020 Q4: $103.10/t). The significantly higher FY2020 Q4 comparative production costs were due to lower tonnes mined during the COVID-19 lockdown enforced mine closure.
Hot Features
Premium
Quarter to Quarter to
end-Jun 2021 end-Jun 2020 %
Production tonnages
Uitkomst ROM (t) 127,927 41,536 208%
Sales tonnages
Metallurgical and thermal
coal (t) 84,834 16,707 408%
Middlings sales 6,024 2,722 121%
90,858 19,429 368%
Quarter financial metrics
Revenue/t ($) 84.91 57.88 47%
Revenue/t (ZAR) 1,201 1,040 15%
Production cost/saleable
tonnes ($)^ 56.74 103.10 (45%)
--------------------------- -------------- -------------- ------
^ costs are all South African Rand based
Makhado Hard Coking Coal Project - Soutpansberg Coalfield (67% owned)
The fully permitted Makhado Project recorded no LTIs (FY2021 Q3: nil) during the quarter.
MC Mining's flagship Makhado Project has very favourable economics and its phased development is expected to deliver positive returns for shareholders. Makhado has a life-of-mine in excess of 46 years and the project would position MC Mining as South Africa's pre-eminent hard coking coal ("HCC") producer.
The IDC has provided longstanding financial support for the development of the Makhado Project and MC Mining has utilised an IDC loan of R160 million ($11.3 million) to progress Makhado to its fully-permitted status and to partially fund the acquisition of the surface rights over the project area. The IDC is also a 6.7% shareholder in MC Mining subsidiary, Baobab Mining & Exploration (Pty) Ltd, the owner of the Makhado Project. The Company regularly interacts with the IDC as well as potential funders and, subsequent to the end of the quarter, the IDC extended the date for repayment of the R160 million loan plus interest, to 31 January 2022. The IDC also agreed to extend the terminal draw down date in respect of the conditional R245 million ($17.3 million) term loan facility for the development of the Makhado Project, to 31 January 2022, subject to the bank confirming its financial due diligence. The Company and IDC are also continuing discussions with the objective of aligning repayment of the IDC facilities with the positive cash flows generated by Makhado.
DRA Projects (SA) (Pty) Ltd ("DRA") completed the initial Makhado Phase 1 capital estimate in October 2019. Given the lapse in time and the known rise in steel prices, the Company contracted DRA to review the Makhado Phase 1 development cost estimate during the quarter. This review was completed and resulted in a revised development cost estimate for Makhado Phase 1 of R650.5 million ($46 million).
Vele Semi-Soft Coking and Thermal Coal Colliery - Limpopo (Tuli) Coalfield (100% owned)
The Vele Colliery remained on care and maintenance during the quarter and no LTIs were recorded during the period (FY2021 Q3: nil). The Vele processing plant is to be refurbished and recommissioned as part of Phase 1 development of the Makhado Project.
Greater Soutpansberg Project (GSP)- Soutpansberg Coalfield (74% owned)
GSP recorded no LTIs (FY2021 Q3: nil) during the quarter and no reportable activities occurred during the period.
Markets
The global economy continued to improve during the quarter, driving global demand for commodities following the spread of COVID-19 during H1 CY2020. This is reflected in the increased demand for South African thermal coal, with average API4 coal prices improving to $105/t, 91 % higher than the $55/t recorded in Q4 FY2020 (FY2021 Q3: $91/t). Demand for HCC also increased during the quarter and average prices were 19% higher than in the comparative period ($134/t vs. $112/t).
Appendix 5B - Quarterly Cash Flow Report
The cash position of the MC Mining group as at 30 June 2021 was $3.2 million. The aggregate amount of payments to related parties and their associates as disclosed at item 6.1 of the June quarter Appendix 5B was $34k, comprising executive director remuneration.
Sam Randazzo
Chief Executive Officer
This announcement has been approved by the Company's Disclosure Committee.
This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.
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 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).
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 .
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.
Tenements held by MC Mining and its Controlled Entities
Project Name Tenement Number Location Interest Change during quarter
------------------------------ ------------------------------- ---------------- --------- ----------------------
Chapudi Project* Albert 686 MS Limpopo 74%
Bergwater 712 MS 74%
Remaining Extent and Portion 2
of Bergwater 697 MS 74%
Blackstone Edge 705 MS 74%
Remaining Extent & Portion 1
of Bluebell 480 MS 74%
Remaining Extent & Portion 1
of Bushy Rise 702 MS 74%
Castle Koppies 652 MS 74%
Chapudi 752 MS 74%
Remaining Extent, Portions 1,
3 & 4 of Coniston 699 MS 74%
Driehoek 631 MS 74%
Remaining Extent of
Dorps-rivier 696 MS 74%
Enfield 512 MS (consolidation
of Remaining Extent of
Enfield 474 MS, Brosdoorn 682
MS & Remaining
Extent of Grootvlei 684 MS) 74%
Remaining Extent and Portion 1
of 74%
Grootboomen 476 MS 74%
Grootvlei 684 MS 74%
Kalkbult 709 MS 74%
Remaining Extent, Remaining
Extent of Portion 2,
Remaining Extent of Portion
3, Portions 1,
4, 5, 6, 7 & 8 of Kliprivier
692 MS 74%
Remaining Extent of Koodoobult
664 MS 74%
Koschade 657 MS (Was Mapani
Kop 656 MS) 74%
Malapchani 659 MS 74%
Mapani Ridge 660 MS 74%
Melrose 469 MS 74%
Middelfontein 683 MS 74%
Mountain View 706 MS 74%
M'tamba Vlei 654 MS 74%
Remaining Extent & Portion 1
of Pienaar 635 MS 74%
Remaining Extent & Portion 1
of Prince's Hill 704 MS 74%
Qualipan 655 MS 74%
Queensdale 707 MS 74%
Remaining Extent & Portion 1
of Ridge End 662 MS 74%
Remaining Extent & Portion 1
of Rochdale 700 MS 74%
Sandilands 708 MS 74%
Portions 1 & 2 of Sandpan 687
MS 74%
Sandstone Edge 658 MS 74%
Remaining Extent of Portions 2
& 3 of Sterkstroom 689 MS 74%
Sutherland 693 MS 74%
Remaining Extent & Portion 1
of Varkfontein 671 MS 74%
Remaining Extent, Portion 2,
Remaining Extent of Portion 1
of Vastval 477 MS 74%
Vleifontein 691 MS 74%
Ptn 3, 4, 5 & 6 of Waterpoort
695 MS 74%
Wildebeesthoek 661 MS 74%
Woodlands 701 MS 74%
------------------------------- ----------------------------------------------- --------- ----------------------
Kanowna West and
Kalbara M27/41 Coolgardie^ 2.99%
----------------
M27/47 2.99%
-----------------------------------------------
M27/59 2.99%
M27/72,27/73 2.99%
M27/114 2.99%
M27/181 7.24%
M27/196 2.99%
M27/414,27/415 2.99%
P27/1826-1829 2.99%
P27/1830-1842 2.99%
P27/1887 2.99%
------------------------------- ----------------------------------------------- --------- ----------------------
Abbotshall Royalty ML63/409,410 Norseman^ Royalty
------------------------------ ------------------------------- ---------------- --------- ----------------------
Kookynie Royalty ML40/061 Leonora^ Royalty
------------------------------
ML40/135,136 Royalty
------------------------------ ------------------------------- ---------------- --------- ----------------------
Makhado Project Fripp 645 MS Limpopo 69%(#)
Lukin 643 MS 69%(#)
Mutamba 668 MS 69%(#)
Salaita 188 MT 69%(#)
Tanga 849 MS 69%(#)
Daru 889 MS 69%(#)
Windhoek 900 MS 69%(#)
Generaal Project* Beck 568 MS Limpopo 74%
Bekaf 650 MS 74%
Remaining Extent & Portion 1
of Boas 642 MS- 74%
Chase 576 MS 74%
Coen Britz 646 MS 74%
Fanie 578 MS 74%
Portions 1, 2 and Remaining
Extent of Generaal 587 MS 74%
Joffre 584 MS 74%
Juliana 647 MS 74%
Kleinenberg 636 MS 74%
Remaining Extent of Maseri Pan
520 MS 74%
Remaining Extent and Portion 2
of Mount Stuart 153 MT 100%
Nakab 184 MT 100%
Phantom 640 MS 74%
Riet 182 MT 100%
Rissik 637 MS 100%
Schuitdrift 179 MT 100%
Septimus 156 MT 100%
Solitude 111 MT 74%
Stayt 183 MT 100%
Remaining Extent & Portion 1
of Terblanche 155 MT 100%
Van Deventer 641 MS 74%
Wildgoose 577 MS 74%
------------------------------- ----------------------------------------------- --------- ----------------------
Mopane Project* Ancaster 501 MS Limpopo 100%
Banff 502 MS 74%
Bierman 599 MS 74%
Cavan 508 MS 100%
Cohen 591 MS 100%
Remaining Extent, Portions 1 &
2 of Delft 499 MS 74%
Dreyer 526 MS 74%
Remaining Extent of Du Toit
563 MS 74%
Faure 562 MS 74%
Remaining Extent and Portion 1
of Goosen 530 MS 74%
Hermanus 533 MS 74%
Jutland 536 MS 100%
Krige 495 MS 74%
Mons 557 MS 100%
Remaining Extent of Otto 560
MS (Now Honeymoon) 74%
Remaining Extent & Portion 1
of Pretorius 531 MS 74%
Schalk 542 MS 74%
Stubbs 558 MS 100%
Ursa Minor 551 MS 74%
Van Heerden 519 MS 74%
Portions 1, 3, 4, 5, 6, 7, 8,
9, Remaining Extent of
Portion 10, Portions 13, 14,
15, 16,
17, 18, 19, 20, 21, 22, 23,
24, 26, 27, 29, 30, 35, 36,
37, 38, 39, 40, 41, 44, 45,
46, 48,
49, 50, 51, 52 & 54 of Vera
815 MS 74%
Remaining Extent of Verdun 535
MS 74%
Voorburg 503 MS 100%
Scheveningen 500 MS 74%
Uitkomst Colliery and Portion 3 (of 2) of
prospects Kweekspruit No. 22 KwaZulu-Natal 70%
Portion 8 (of 1) of
Kweekspruit No. 22 70%
Remainder of Portion 1 of
Uitkomst No. 95 70%
Portion 5 (of 2) of Uitkomst
No. 95 70%
Remainder Portion1 of Vaalbank
No. 103 70%
Portion 4 (of 1) of Vaalbank
No. 103 70%
Portion 5 (of 1) of Vaalbank
No. 103 70%
Remainder of Portion 1 of
Rustverwacht No. 151 70%
Remainder of Portion 2 of
Rustverwacht No. 151 70%
Remainder of Portion 3 (of 1)
of Rustverwacht No. 151 70%
Portion 4 (of 1) Rustverwacht
No.151 70%
Portion 5 (of 1) Rustverwacht
No. 151 70%
Remainder of Portion 6 (of 1)
of Rustverwacht No. 151 70%
Portion 7 (of 1) of
Rustverwacht No. 151 70%
Portion 8 (of 2) of
Rustverwacht No. 151 70%
Remainder of Portion 9 (of 2)
of Rustverwacht No. 151 70%
Portion 11 (of 6) of
Rustverwacht No. 151 70%
Portion 12 (of 9) of
Rustverwacht No. 151 70%
Portion 13 (of 2) of
Rustverwacht No. 151 70%
Portion 14 (of 2) of
Rustverwacht No. 151 70%
Portion 15 (of 3) of
Rustverwacht No. 151 70%
Portion 16 (of 3) of
Rustverwacht No. 151 70%
Portion 17 (of 2) of
Rustverwacht No. 151 70%
Portion 18 (of 3) of Waterval
No. 157 70%
Remainder of Portion 1 of
Klipspruit No. 178 70%
Remainder of Portion 4 of
Klipspruit No. 178 70%
Remainder of Portion 5 of
Klipspruit No. 178 70%
Portion 6 of Klipspruit No.
178 70%
Portion 7 (of 1) of Klipspruit
No. 178 70%
Portion 8 (of 1 )of Klipspruit
No. 178 70%
Portion 9 of Klipspruit No.
178 70%
Remainder of Portion 10 (of 5)
of Klipspruit No. 178 70%
Portion 11 (of 5) of
Klipspruit No. 178 70%
Portion 13 (of 4) of
Klipspruit No. 178 70%
Remainder of Portion 14 of
Klipspruit No. 178 70%
Portion 16 (of 14) of
Klipspruit No. 178 70%
Portion 18 of Klipspruit No.
178 70%
Portion 23 of Klipspruit No.
178 70%
Remainder of Portion 1 of
Jackalsdraai No. 299 70%
Remainder of Jericho B No. 400 70%
Portion 1 of Jericho B No. 400 70%
Portion 2 of Jericho B No. 400 70%
Portion 3 of Jericho B No. 400 70%
Remainder of Jericho C No. 413 70%
Portion 1 of Jericho C No. 413 70%
Remainder of Portion 1 of
Jericho A No. 414 70%
Remainder of Portion 2 (of 1)
of Jericho A No. 414 70%
Portion 3 (of 1) of Jericho A
No. 414 70%
Portion 4 (of 1) of Jericho A
No. 414 70%
Portion 5 (of 2) of Jericho A
No. 414 70%
Portion 6 (of 1) of Jericho A
No. 414 70%
Margin No. 420 70%
Portions of Overvlakte 125 MS
(Remaining Extent, 3, 4, 5,
Vele Colliery and prospects 6, 13, 14) Limpopo 100%
Bergen Op Zoom 124 MS 100%
Semple 155 MS 100%
Voorspoed 836 MS 100%
Alyth 837 MS 100%
------------------------------- ----------------------------------------------- --------- ----------------------
Certain portions of Unsurveyed
Tshikunda State Land known as Mutale Limpopo 60%
------------------------------ ------------------------------- ---------------- --------- ----------------------
* Form part of the Greater Soutpansberg Projects
Tenement located in the Republic of South Africa
^ Tenement located in Australia
(#) MC Mining's interest will reduce to 67% on completion of the 26% Broad Based Black Economic Empowerment (BBBEE) transaction
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