On 11 January 2022, MC Mining Ltd announced that its subsidiary, Baobab Mining & Exploration (Pty) Ltd (Baobab) and the vendor of the Lukin and Salaita properties, being the key surface rights for the Makhado hard coking coal project, agreed to extend the due date for payment of the balance owing of ZAR3 5 million (US$2.3 million), to 28 February 2022.
MC Mining has announced that the final instalment of ZAR 35 million has been paid by Baobab and the vendor held mortgages over the properties are in the process of being released.
The ZAR 35 million payment was sourced from funds advanced under the staged ZAR 86 million (approximately US$5.7 million or AUS$7.8 million) convertible advance and subscription agreement (the agreement) with South African based mining group, Senosi Group Investment Holdings Proprietary Ltd (SGIH), announced by the company on 1 February 2022. MC Mining has already developed a positive working relationship with SGIH and its successful track record of developing and operating coal mines in South Africa is of great significance as the company moves closer to finalising a funding package to develop the Makhado Project.
To date, SGIH has advanced ZAR 40 million (US$2.6 million) to the company on time and in full compliance with the agreement. An additional ZAR6 036 691 (US$0.4 million) is due to be advanced by 31 March 2022 and, subject to approval of South Africa’s Reserve Bank, the total advances of ZAR46 036 691 will convert into 38 363 909 new ordinary MC Mining shares at ZAR 1.20 per share. This will result in SGIH owning 19.9% of the company’s total issued share capital. The issue price of ZAR 1.20 per share represents a premium of 15% above the company’s JSE closing share price on 28 February 2022.
SGIH has also agreed to advance an additional ZAR 40 million to the company between April and July 2022, which is to convert into 33 333 333 new ordinary shares at ZAR 1.20 per share, subject to the receipt of all required approvals, including the approval of MC Mining’s shareholders.
As announced on 28 January 2022, the Industrial Development Corporation of South Africa Limited (IDC) agreed to extend the repayment date for the ZAR 160 million (US$10.5 million) loan, plus accrued interest, to 30 November 2022. The IDC also agreed to extend the terminal drawdown date of the additional ZAR 245 million (US$16.1 million) IDC term loan for the development of Phase 1 of Makhado, to 30 November 2022, subject to the IDC re-affirming its due diligence.
Sam Randazzo, MC Mining’s interim CEO, commented: “Payment of the final instalment of ZAR 35 million and the release of security over key surface rights for the Makhado Project is a significant breakthrough for MC Mining. This, together with the funding provided by SGIH and the IDC’s commitment, has the company well placed and in the best position it.”
Read the article online at: https://www.worldcoal.com/coal/07032022/mc-mining-provides-makhado-land-acquisition-update/