MC Mining Ltd has provided its interim financial report for the six months ended 31 December 2021 (the period).
- The loss after tax for the period was US$0.8 million or 0.54 cents per share (1H FY21: loss after tax of US$2.7 million or 1.80 cents per share).
- Revenue of US$13 million (1H FY21: US$8.8 million) and cost of sales of US$10.9 million (1H FY21: US$9.2 million) resulted in a gross profit of US$2.1 million (1H FY21: gross loss US$0.4 million) for the period.
- Employee benefit expense of US$1.2 million (1H FY21: US$1 million).
- Other expenses of US$1.7 million (1H FY21: US$1.3 million).
- As at 31 December 2021, the company had cash and cash equivalents of US$1.9 million compared to cash and cash equivalents of US$1 million at 30 June 2021.
- The Uitkomst metallurgical and thermal coal mine 107 953 t of high quality metallurgical and thermal coal during the period (1H FY21: 127 534 t).
- An additional 11 655 t of high-ash middlings were sold during the period (1H FY21: 11 569 t).
- 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 US$151/t for the period (H1 FY2021: US$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.
- 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 (1H FY21: four LTIs). No LTIs were reported at the Makhado or Limpopo Projects.
- The Company recorded 17 positive COVID-19 cases (1H FY21: 27 positive COVID-19 cases) at Uitkomst, Makhado and Limpopo Projects during the period.
- The Industrial Development Corporation of South Africa Limited (IDC) has provided longstanding commitment to the development of Makhado and has provided a loan of US$10 million (ZAR 160 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 US$15.4 million (ZAR 245 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 US$2.6 million (ZAR 40.6 million) at the end of February 2022.
- Staged US$5.7 million (ZAR 86 million) convertible advance and subscription 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 US$2.7 million (ZAR 40 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.
- Bernard Pryor resigned as Chairman of the Board and long standing Non-Executive Director, Khomotso Mosehla, was appointed as Chairman, pending the outcome of the scheduled 11 April 2022 EGM.
Read the article online at: https://www.worldcoal.com/coal/17032022/mc-mining-provides-half-year-financial-report/
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