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Recommencement of coal production and lockdown update
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 5 May 2020
RECOMMENCEMENT OF COAL PRODUCTION AND LOCKDOWN UPDATE
Further to the announcements on 26 March 2020 and 24 April 2020, MC
Mining Limited (“MC Mining” or the “Company”) provides a market update
with regards to the impact on the Company of the global COVID-19
pandemic.MC Mining remains focused on taking the necessary
precautions to prevent the spread COVID-19 and reducing the threat to
our employees, contractors and stakeholders.
Operations at the Uitkomst Colliery
The South African Government issued a directive on 23 March 2020 (the
“Directive”) requiring a 21-day national lockdown (the “Lockdown”),
effective midnight Thursday 26 March 2020 to midnight Thursday 16
April 2020. The Directive was as a result of a level 5 national
coronavirus alert assessment and resulted in the high-grade Uitkomst
metallurgical and thermal coal mine (“Uitkomst Colliery” or
“Uitkomst”) being placed on care and maintenance. The Lockdown was
subsequently extended and on 23 April 2020 the Government announced a
phased, risk-based approach to lifting restrictions and the alert
level reduced to level 4 from 1 May 2020 (the Government address can
be found at: https://www.gov.za/speeches/president-cyril-ramaphosa-
south-africas-response-coronavirus-covid-19-pandemic-23-apr-2020).
Level 4 of the Lockdown authorises some business activity, subject to
extreme precautions and under specific conditions. The underground
Uitkomst Colliery is permitted to ramp up to 50% of labour capacity
and must adhere to detailed health and safety protocols and introduce
workplace plans to enable disease surveillance at site and prevent
the spread of infection.
The Department of Mineral Resources and Energy has also issued COVID-
19 directives. These require mining companies to ensure screening of
employees and where indicated, testing, and employees who have tested
positive for the virus will need to be quarantined. All data collected
during the screening and testing programme is to be submitted to the
authorities.
The Uitkomst Colliery has implemented standard operating procedures
that comply with the required measures and limited activities at the
mine recommenced on 4 May 2020. Uitkomst is a mechanised underground
operation and it will be possible to ramp-up to 50% capacity within 7
to 10 days. During this period the colliery will assess the effects
that the Lockdown has had on critical suppliers while the coal off-
take market remains challenging due to the restrictions imposed on
businesses. Uitkomst is in constant communication with its customers
to ensure their requirements are met and the colliery is only expected
to return to full operating capacity following further reductions in
the national coronavirus alert assessments and once coal off-takes
have normalised.
Effects of the Lockdown on MC Mining’s other sites
The Lockdown also impacted activities at the Makhado, Vele and Greater
Soutpansberg Projects as well as the Company’s corporate office and
led to the implementation of business continuity measures as well as
stringent health and safety procedures. This also resulted in the
Company having to implement a ‘no work, no pay’ policy for non-
essential staff and a portion of wages were paid by the Government’s
Temporary Employee/Employer Relief Scheme,reducing the adverse
financial impacts that the Lockdown is having on staff. The Company
has also adopted a work-from-home strategy and where possible, staff
will continue to work remotely.
Available cash & facilities
The Company has an available cash balance of US$1.1 million as well
as the US$6.5 million (R120 million) second tranche of the existing
Industrial Development Corporation of South Africa Limited loan
available for drawdown. MC Mining is engaged in discussions with its
lender group regarding drawdown from existing and potential new
finance facilities. As previously communicated, the Company is also
in the process of securing the balance of the funding required to
commence construction of Phase 1 of the fully permitted Makhado hard
coking coal project and this is expected to be completed in Q2/Q3
CY2020.
Brenda Berlin, the Company’s CEO, commented: “The move to Lockdown
level 4 facilitates Uitkomst resuming production of its high-grade
coal, albeit at 50% of normal production. Safety of our people is
critical and normalised operating activities at the Uitkomst Colliery
and MC Mining’s other sites will only resume when it is safe to do so
and in line with Government regulations.Where possible,key
activities for rest of the Group will continue remotely in isolated,
safe environments and we remain very mindful of the economic toll that
the pandemic has on our employees and their families.
The Company continues to interact with potential domestic and
international capital-providers to secure the balance of funding
required to commence development of Makhado Phase 1 and anticipates
that the process will be completed in Q2/Q3 CY2020.”
Brenda Berlin
Chief Executive Officer
This announcement has been approved by the Company’s Disclosure Committee.
For more information contact:
Brenda Berlin Chief Executive MC Mining Limited +27 10 003
Officer 8000
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: 05-05-2020 08:00:00
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