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Half-Year Results for period ending 31 December 2020
MC Mining Limited
Previously Coal of Africa Limited
(Incorporated and registered in Australia)
Registration number ABN 008 905 388
ISIN AU000000MCM9
JSE share code: MCZ
ASX/AIM code: MCM
ANNOUNCEMENT 15 March 2021
HALF-YEAR RESULTS FOR PERIOD ENDING 31 DECEMBER 2020
MC Mining Limited (“MC Mining” or the “Company”) is pleased to provide
its interim financial report for the six months ended 31 December 2020
(the “Period”). All figures are denominated in United States dollars
unless otherwise stated and the full report is available on the
Company's website, www.mcmining.co.za.
Financial review
• The loss after tax for the Period was $2.7 million or 1.80 cents
per share (FY2020 H1: loss after tax of $7.1 million or 4.95 cents
per share);
• Revenue of $8.8 million (FY2020 H1: $11.4 million) and cost of
sales of $9.2 million (FY2020 H1: $11.1 million) resulted in a
gross loss of $0.4 million (FY2020 H1: gross profit $0.3 million)
for the Period;
• An impairment reversal recognised in the current period, compared
to a net impairment loss of $1.2 million in FY2020 H1;
• Employee benefit expense of $1.0 million (FY2020 H1: $3.0 million);
and
• Other expenses were $1.3 million (FY2020 H1: $2.2 million).
Operational review
H1 FY2021 H1 FY2020 %
Production tonnages
Uitkomst ROM coal (t) 246,229 262,696 (6%)
Sales tonnages
Own ROM coal (t) 127,534 147,234 (13%)
Middlings sales (t) 11,569 14,587 (21%)
139,103 161,821 (14%)
Financial metrics
Revenue/t ($) 61.90 68.11 (9%)
Production costs/saleable tonnes ($) 53.56 59.41 (10%)
• 127,534 tonnes (“t”) of high quality metallurgical and thermal coal
were sold during the Period (FY2020 H1: 147,234t);
• An additional 11,569t of high-ash middlings were sold during the
Period (FY2020 H1 14,587t);
• At the end of March 2020, the South African Government implemented
nationwide Covid-19 Level 5 lockdown restrictions, resulting in
Uitkomst metallurgical and thermal coal mine (“Uitkomst Colliery”
or “Uitkomst”) being placed on care and maintenance;
• In July 2020, mining at the Uitkomst Colliery started to ramp up.
However, high levels of absenteeism due to Covid-19 preventative
measures resulted in coal production for the Period reducing to
246,229t compared to 262,696t in H1 FY2020, a 6% decline;
• The world-wide Covid-19 economic downturn led to a significant
decline in international coal prices, which did not show signs of
recovery until November 2020;
• A number of Uitkomst’s customers suspended operations to comply
with lockdown regulations which negatively impacted Uitkomst coal
sales;
• Covid-19 restrictions continued to impede activities at the
Company’s other projects, being the Makhado hard coking coal
project (“Makhado Project”), Vele semi-soft coking and thermal coal
colliery and Greater Soutpansberg Projects (collectively,the
“Limpopo Projects”), which remain in various stages of development;
• Following the implementation of a safety programme during the
Period, the Uitkomst mine reported an improved safety record with
four lost-time injuries (“LTIs”) during the Period (FY2020 H1:
seven LTIs); and
• The Company recorded 27 positive Covid-19 cases at Uitkomst and
zero cases at the Limpopo Projects during the Period.
Corporate and market features
• During the Period, the $16.4 million (ZAR240 million) Industrial
Development Corporation of South Africa Limited (“IDC”) loan
facility (“IDC Facility”), of which $8.2 million (ZAR120 million)
had been drawn in a prior year (the “First Drawdown”), was
restructured. An additional $2.7 million (ZAR40 million) was drawn
during the Period and the remaining undrawn balance of $5.5 million
(ZAR80 million) was cancelled;
• The restructuring of the IDC Facility was conditional upon the
Company raising $0.9 million (ZAR15 million) of new equity and this
condition was satisfied in August 2020 with the issue of 13,331,433
new ordinary MC Mining shares;
• The IDC Facility is to be repaid on 31 July 2021 and the Company
will seek to negotiate a deferred settlement over time for repayment
of the First Drawdown, with the balance expected to be rolled into
the previously announced new Makhado Project Phase 1 loan facility
with the IDC, subject to the Company raising an additional $22.9
million (ZAR335 million) (the “Additional Funding”). In the event
that the parties cannot reach agreement on further deferment terms
or the Company does not repay the loan by the repayment date, the
financing documentation allows for the IDC Facility to be converted
into equity;
• The Company continues to progress a number of debt/equity funding
initiatives to raise the Additional Funding for development of the
Makhado Project;
• Pressure on API4 thermal coal prices following the spread of Covid-
19 resulted in average prices for the six months declining to $64/t
compared to $69/t in FY2020 H1;
• Subsequent to the Period-end, Brenda Berlin resigned as Acting
Chief Executive Officer (“CEO”) and Executive director, and Non-
Executive Director, Sam Randazzo, assumed that role, pending the
appointment of a new permanent CEO; and
• As at 31 December 2020, the Company had cash and cash equivalents
of $2.0 million compared to cash and cash equivalents of $2.7
million at 30 June 2020.
Authorised by
Sam Randazzo
Interim CEO
This announcement has been approved by the Company’s Disclosure Committee.
This announcement is inside information for the purposes of Article 7 of
Regulation 596/2014.
For more information contact:
Tony Bevan Company Endeavour +61 08 9316
Secretary Corporate Services 9100
Company advisors:
James Harris / Nominated Strand Hanson +44 20 7409
James Dance Adviser Limited 3494
Rory Scott Broker (AIM) Tennyson +44 20 7186
Securities 9032
James Duncan Financial PR R&A Strategic +27 11 880
(South Africa) Communications 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).
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.
Date: 15-03-2021 11:00:00
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