Wrap Text
Restructuring of the current IDC loan
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 6 July 2020
RESTRUCTURING OF THE CURRENT IDC LOAN
MC Mining Limited (“MC Mining” or the “Company”) is pleased to announce
the conclusion of a conditional loan restructuring agreement (the
"Agreement”) with the Industrial Development Corporation of South
Africa Limited (“IDC”). The Agreement also includes the Company’s
subsidiary,Baobab Mining and Exploration Proprietary Limited
("Baobab"),the owner of the Makhado hard coking coal project
(“Makhado Project” or “Makhado”).
The Company secured a R240 million ($13.7 million*) loan facility (the
“Initial IDC Facility”) from the IDC in March 2017. This facility was
granted to develop the Makhado Project and resulted in the IDC becoming
a 5% shareholder in Baobab and also receiving warrants equating to
2.5% of the Company’s issued share capital. MC Mining previously
utilized R120 million ($6.9 million) (the “First Tranche”) of the
Initial IDC Facility to develop Makhado, including progressing the
project to fully permitted status and completing the acquisition of
the surface rights required for the Makhado mining area. The balance
of R120 million ($6.9 million) remained undrawn (“Second Tranche”).
Phase 1 of the Makhado Project has a nine-year life-of-mine and is
forecast to produce 540,000 tonnes (“t”) of hard coking coal annually
as well as 570,000t of an export quality thermal coal by-product. The
project has robust fundamentals that generate compelling returns. As
previously announced, the Company is in advanced discussions to secure
R535million ($30.6 million), being the capital and working capital
required to construct Phase 1. Significant progress was made prior to
the March 2020 COVID-19 lockdown, including the conclusion of a
further R245 million ($14.0 million) loan facility (“Phase 1 Loan
Facility”) from the IDC, the initial step in the Phase 1 composite
debt/equity funding package.
One of the conditions precedent to the Phase 1 Loan Facility was that
the Company would agree to cancel the undrawn Second Tranche of the
Initial IDC Facility. The IDC has now agreed that the Company may
drawdown R40 million ($2.3 million) of the Second Tranche and the
Phase 1 Loan Facility can still form part of the composite Makhado
Phase 1 funding package provided the R40 million is repaid prior to
30 November 2020. In addition, the Agreement delays repayment of the
First Tranche,plus accrued interest,until November 2020. The
drawdown of the R40 million under the Agreement will result in the
IDC’s participation in the Makhado Project increasing by a further
1.7% interest in Baobab (taking their total project level interest to
6.7%) and the award of warrants equating to 0.8% of MC Mining’s issued
shares. The Agreement is conditional upon the Company raising R15.0
million ($0.9 million) in the form of new equity and the Company is
actively speaking to shareholders and prospective new investors in
order to secure this investment.
Brenda Berlin, MC Mining’s Acting CEO, commented: “The Company made
significant progress in securing the capital required for Phase 1
prior to the COVID-19 lockdown. The execution of the complete Phase 1
composite funding package was delayed due to COVID-19 and the
restructuring of the Initial IDC Facility pursuant to the Agreement
gives the Company the time it needs to conclude the funding process.
The restructuring also delays the repayment of the First Tranche and
negotiations are ongoing to align this payment with the positive cash
flows generated by Makhado.
We have initiated discussions to raise the $0.9 million in equity and
positive feedback has already been received for a significant portion.
The debt restructuring is expected to be completed during July/ August
2020 while the process to secure the balance of the Phase 1 funding
continues. We anticipate that this will be completed during H2 CY2020,
with commencement of the nine-month construction period soon
thereafter.”
Brenda Berlin
Acting Chief Executive Officer
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.
* All figures are in South African rand or United States dollars unless otherwise
stated.
For more information contact:
Brenda Berlin Acting Chief MC Mining Limited +27 10 003
Executive 8000
Officer
Tony Bevan Company Endeavour +61 08 9316
Secretary Corporate Services 9100
Company advisors:
Ross Allister/David Nominated Peel Hunt LLP +44 20 7418
McKeown Adviser and 8900
Broker
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 coal), Makhado Project (hard coking coal).
Vele Colliery (semi-soft coking 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.
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.
Date: 06-07-2020 03:00:00
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