Wrap Text
Lockdown in South Africa and suspension of coal production
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
LOCKDOWN IN SOUTH AFRICA AND SUSPENSION OF COAL PRODUCTION
MC Mining Limited (“MC Mining” or the “Company”) announces the following market update with regards to the impact on the Company of
the global COVID-19 (coronavirus) pandemic.
Introduction
Our priority is the health and safety of our employees. The guidance and advice we are providing employees, follows World Health
Organisation guidelines and is supplemented by direction provided by the South African Government. The Executive Committee regularly review
and update our advice to employees and monitor the business continuity measures to ensure managerial oversight is effective and properly coordinated.
South African Operations
The South African Government issued a directive on 23 March 2020 (the “Directive”) requiring a 21-day national lockdown, effective midnight
Thursday 26 March 2020 to midnight Thursday 16 April 2020, to contain the spread of the coronavirus in the country (the “Lockdown”). Further
to this, the Department of Mineral Resources and Energy (the “DMRE”) released a statement on Wednesday 25 March 2020. The statement notes
that for “some mining operations and processing plants a complete shutdown will not be feasible, as a restart from scratch may be too
costly” and further states that “mining operations will be scaled down significantly”.
This statement can be found at: https://www.dmr.gov.za/news-room/post/1848.
The Directive impacts operations at the Company’s Uitkomst Colliery, the Makhado, Vele and Greater Soutpansberg Projects as well as its
corporate office. In line with measures detailed in the Directive, the Uitkomst Colliery will be placed on care and maintenance during
the Lockdown period. The scaled back operations will be monitored and managed according to procedures enacted to protect the health and
safety of all of the Company’s people, which remains the MC Mining’s overriding priority. These procedures cover employee communication
and training, hygiene response, security controls, health monitoring, resilience and contingency plans.
It is worth noting that the Uitkomst Colliery is a mechanised underground operation with limited human interaction. Upon completion
of the Lockdown period, it will be possible to ramp-up to steady state production levels within a relatively short timeframe. However, given
the continued uncertainty around the outlook for control of the coronavirus in South Africa, FY2020 production guidance is suspended
until the Company is in a better position to quantify the full impact of the lockdown.
Effects of the Lockdown on Non-Essential Employees
The Lockdown has resulted in MC Mining implementing a ‘no work, no pay’ policy for non-essential staff at its various sites. The Company
understands the adverse impact this policy has on staff and is aware of alternative mitigating financial measures proposed by the
Government. These include wage payments through the Temporary Employee Relief Scheme and the Company is investigating these measures and will
use its best endeavours to procure that staff receive the financial support for which they qualify.
Available cash & facilities
The Company has an available cash balance of US$1.3 million (R23 million) including the US$1.1 million (R20 million) general banking
facility from ABSA Bank Limited. MC Mining also has the US$7.0 million (R120 million) second tranche of the existing Industrial Development
Corporation of South Africa Limited loan available for drawdown. As previously communicated, the Company is also in the process of
securing the balance of US$32 million (R460 million) required to commence construction of Phase 1 of its fully permitted Makhado hard coking coal project.
Comment
Brenda Berlin, the Company’s CEO, commented: “MC Mining supports all
measures to limit the impact of COVID-19 and the Lockdown has impacted
our Uitkomst Colliery as well as our corporate office and project
sites. We anticipate that activities at all of the sites will resume
as soon as it is safe to re-commence. Discussions with potential
funders for Phase 1 of our flagship Makhado hard coking coal project
will continue during the Lockdown period. The Company still aims to
finalise the composite debt/equity package for Phase 1 during H1
CY2020 with construction commencing later this year.”
Authorised by
Brenda Berlin
Chief Executive Officer
26 March 2020
For more information contact:
Brenda Berlin CEO MC Mining Limited +27 10 003 8000
Tony Bevan Company Secretary Endeavour Corporate +61 08 9316
Services 9100
Company advisors:
Ross Allister/David Nominated Adviser Peel Hunt LLP +44 20 7418
McKeown and Broker 8900
Charmane Russell/Olwen Financial PR R&A Strategic +27 11 880 3924
Auret (South Africa) Communications
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 and thermal coal by-product).
Vele Colliery (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 do 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: 26-03-2020 04:15:00
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