MC Mining Limited Makhado Thermal Coal Off-Take Signed (2523W)
16 April 2019 - 4:00PM
UK Regulatory
TIDMMCM
RNS Number : 2523W
MC Mining Limited
16 April 2019
ANNOUNCEMENT
16 April 2019
MAKHADO THERMAL COAL OFF-TAKE SIGNED
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 Services +61 08 9316 9100
Company advisors:
Financial PR
Jos Simson/ Gareth Tredway (United Kingdom) Tavistock +44 20 7920 3150
Ross Allister/David McKeown Nominated Adviser and Broker Peel Hunt LLP +44 20 7418 8900
Charmane Russell/Olwen Auret Financial PR (South Africa) R&A Strategic Communications +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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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