South African producer of high quality coking and thermal coal assets MC Mining Ltd (MCM), together with its subsidiaries, has provided an update for the quarter ended 30 June 2018.
Uitkomst colliery – Utrecht coalfields (70% owned)
According to MCM, the Uitkomst colliery has a remaining life of mine of approximately 16 years including a planned mine extension and awaits approval of an amendment to its integrated water use license prior to developing the extension. Uitkomst sells sized coal (peas) products with the 0 – 40 mm product sold into the domestic metallurgical market for use as pulverised coal while the peas are supplied to local energy generation facilities.
In the second quarter, the Uitkomst contract miner experienced continued equipment availability issues. The company has since commenced negotiations to acquire the contractor’s assets used at the colliery. The acquisition process involves obtaining the required takeover and other regulatory approvals. MCM anticipates potential completion thereof in 1Q19.
The start of in-sourcing negotiations resulted in increased oversight of mining operations at the colliery. This yielded favourable results and Uitkomst produced 123 771 t of ROM coal during the three months, 7% higher than the same period in 2017.
During the quarter, the company procured a R20 million facility for the Uitkomst colliery from RMB, a division of FirstRand Bank Ltd.
The 12-month facility is subject to a floating coupon at the South African Prime rate less 0.5% to be reviewed by RMB annually.
The company also finalised the sale of a 21% interest in Uitkomst on a vendor-financed basis to current BEE shareholders.
Average revenue per tonne on product sold from Uitkomst improved by 11% in the quarter to US$96.52/t (previously US$86.99/t).
CEO of MCM, David Brown, commented: “The Uitkomst colliery generated pleasing results for the quarter, benefitting from increased ROM production and carry-over inventory from the March quarter. Coal production continued to be affected by mining contractor equipment availability issues and the company has progressed discussions with regard to the take-over of mining operations.”
“The higher export thermal coal prices during the three months resulted in Uitkomst generating robust cash flows relative to our budget and MCM continues to assess expansion opportunities to increase the ROM production. The favourable cash flow generation at Uitkomst facilitated the securing of a R20 million general banking facility affirming nomalisation of banking relationships while the ownership requirements of the draft South African Mining Charter 3.”
The full report can be found here: http://www.mcmining.co.za/component/jdownloads/send/80-2018/1410-report-for-the-quarter-ended-30-june-2018
Read the article online at: https://www.worldcoal.com/coal/27072018/uitkomst-colliery-yields-strong-2q18-revenue/
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