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MC MINING LIMITED - Makhado thermal coal off-take signed

Release Date: 16/04/2019 07:05
Code(s): MCZ     PDF:  
Wrap Text
Makhado thermal coal off-take signed

MC Mining Limited
Previously Coal of Africa Limited
(Incorporated and registered in Australia)
Registration number ABN 008 905 388
JSE share code: MCZ

ANNOUNCEMENT                                                                        16 April 2019


MC Mining Limited (“MC Mining”) is pleased to announce the conclusion of a coal Sale and Purchase
Agreement (the “Agreement”) for the export quality thermal coal to be produced by Phase 1 of the
Makhado hard coking and thermal coal project (“Makhado Project” or “Makhado”). The parties to
the Agreement are MC Mining’s wholly-owned subsidiary, Limpopo Coal Company (Pty) Ltd
(“Limpopo”), and one of the world’s largest producers and marketers of bulk commodities.

MC Mining’s subsidiary, Baobab Mining & Exploration (Pty) Ltd, is the owner of the Makhado Project
and the nine-month Phase 1 construction period is expected to commence in Q3 CY2019. Phase 1 will
generate approximately three million tonnes per annum (“Mtpa”) of run-of-mine (“ROM”) coal from
the west pit and this will undergo preliminary processing at the mine, yielding an estimated 2Mtpa of
ROM coal. The resultant ROM coal will be transported and sold to Limpopo which will, with its
modified plant, complete the final processing producing up to 0.57Mtpa of export quality thermal coal
and 0.54Mtpa of hard coking coal. Construction of Phase 2 of the Makhado Project (Makhado ‘Lite’)
in circa CY2022 is expected to produce 4Mtpa of ROM coal from the east and central pits resulting in
some 1.0Mtpa of thermal coal.

The key highlights of the Agreement are:
•     sales prices shall be an API4 linked price expressed in US Dollars and will be calculated and agreed
      on a quarterly basis; and
•   saleable thermal coal will be delivered to the Musina siding and sold on a free-on-rail (FOR) basis,
    which takes into account the actual rail and port charges.

The Agreement is subject to various conditions precedent standard for an agreement of this nature.

David Brown, CEO commented:
“We have contracted with one of the world's largest producers and marketers of seaborne traded coal
for the majority of the life of Phase 1. The signing of this Agreement is a further significant step in the
advancement of Makhado.

The phased development of the Makhado Project will generate a significant number of employment
opportunities in the Limpopo province and the export of the thermal coal utilises previously tested
logistics infrastructure. Negotiations for a composite debt and equity funding arrangement continue
and we anticipate that they will be completed in Q3 CY2019, with Phase 1 construction commencing
later in the quarter.”

Authorised by
David Brown
Chief Executive Officer

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

For more information contact:
David Brown                       Chief Executive Officer     MC Mining Limited     +27 10 003 8000
Brenda Berlin                     Chief Financial Officer     MC Mining Limited     +27 10 003 8000
Tony Bevan                        Company Secretary           Endeavour Corporate   +61 08 9316 9100

Company advisors:
Jos Simson/ Gareth Tredway         Financial PR                Tavistock            +44 20 7920 3150
                                   (United Kingdom)
Ross Allister/David McKeown        Nominated Adviser and       Peel Hunt LLP        +44 20 7418 8900
Charmane Russell/Olwen Auret       Financial PR (South Africa) R&A Strategic        +27 11 880 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 (coking and thermal coal). Vele
Colliery (coking and thermal coal), and the Greater Soutpansberg Projects (MbeuYashu).

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.


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