Wrap Text
IDC Loan 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 30 November 2020
IDC LOAN UPDATE
MC Mining Limited (“MC Mining” or the “Company”) announces an update regarding the proposed
extension of its loan facilities with the Industrial Development Corporation of South Africa Limited
(“IDC”), which were provided to develop the Company’s flagship, fully permitted Makhado hard coking
coal project (“Makhado Project” or “Makhado”).
Makhado has a life of mine in excess of 46 years and robust fundamentals, resulting in compelling
economics. The phased development of Makhado is expected to deliver positive returns for
shareholders and will position MC Mining as South Africa’s pre-eminent hard coking coal producer.
The Company has made significant progress securing the funds required to construct Phase 1, that
would create more than 650 direct, permanent job opportunities and reduce the volumes of hard
coking coal currently imported into South Africa.
In March 2017, the Company secured a R240 million ($15.5 million) facility (“Initial IDC Facility”) from
the IDC. The Company utilised R120 million ($7.7 million) (“First Drawdown”) of this facility to develop
Makhado, including progressing the project to fully permitted status and completing the acquisition
of the surface rights required for the mining area. During August 2020, the Company and the IDC
agreed to restructure the balance of the Initial IDC Facility and MC Mining drew down R40 million
($2.6 million) (“Second Drawdown”) and agreed to cancel the balance of the Initial IDC Facility. The
First and Second Drawdowns resulted in the IDC becoming a 6.7% shareholder in the Makhado Project.
The Initial Drawdown and the Second Drawdown plus accrued interest are due for repayment by 30
November 2020. The Company has submitted a formal application to extend the repayment period
and the IDC has acknowledged this application. The IDC supports the development of Makhado and
negotiations between the parties are ongoing to align the repayment of the First Drawdown with the
positive cash flows generated by the project, whilst repaying the Second Drawdown from the proceeds
raised to construct Phase 1. MC Mining is confident that a satisfactory position can be reached with
the IDC. In the unlikely event that the parties cannot reach agreement on further deferment terms,
the financing documentation allows for the debt to be converted into equity. A further announcement
will be made in due course.
Phase 1 comprises the construction of the Makhado west pit and modifications to the existing Vele
Colliery processing plant to process the screened and scalped Makhado run-of-mine coal. The total
funding required is approximately R575 million ($37.1 million), including the repayment of the Second
Drawdown. MC Mining previously secured a conditional R245 million ($15.8 million) term loan facility
from the IDC, the initial step in the composite Phase 1 debt/equity funding process. As previously
announced, the Company has also secured in-principle agreements with various other parties for a
further R200 million ($12.9 million) for Phase 1 that are subject to agreement of final documentation.
It is also in significantly advanced discussions with potential equity funders for the remaining R130
million ($8.4 million) and anticipates that these will be finalised during Q1 CY2021.
Brenda Berlin, Acting CEO commented:
“The IDC is supportive of the development of Makhado and the funding advanced under the First and
Second Drawdowns was utilised to fund pre-project activities, including securing the numerous
regulatory licences and approvals. The Company has progressed initiatives to secure the funding for
the construction of Phase 1 and anticipates that these will be completed in Q1 CY2021. A nine-month
construction period will follow, with first coal sales in H1 CY2022. The development of the Makhado
Project is supported by favourable long-term hard coking coal markets and forecast growth in
worldwide steel demand, driven by global economic development and urbanisation. Phase 1 has an
internal rate of return in excess of 40% and a payback of less than 2.5 years.”
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 Executive MC Mining Limited +27 10 003 8000
Officer
Tony Bevan Company Secretary Endeavour Corporate +61 08 9316 9100
Services
Company advisors:
James Harris / James Dance Nominated Adviser Strand Hanson Limited +44 20 7409 3494
Rory Scott Broker (AIM) Mirabaud Securities Limited +44 20 3167 7220
James Duncan Financial PR (South R&A Strategic +27 11 880 3924
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 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.
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: 30-11-2020 09:00:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
