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RNS Number : 2408S
MC Mining Limited
15 March 2021
ANNOUNCEMENT 15 March 2021
HALF-YEAR RESULTS FOR PERIOD ENDING 31 DECEMBER 2020
MC Mining Limited ("MC Mining" or the "Company") is pleased to
provide its interim financial report for the six months ended 31
December 2020 (the "Period"). All figures are denominated in United
States dollars unless otherwise stated and the full report is
available in the Company's separate announcement released today and
on the Company's website, www.mcmining.co.za .
Financial review
-- The loss after tax for the Period was $2.7 million or 1.80
cents per share (FY2020 H1: loss after tax of $7.1 million or 4.95
cents per share);
-- Revenue of $8.8 million (FY2020 H1: $11.4 million) and cost
of sales of $9.2 million (FY2020 H1: $11.1 million) resulted in a
gross loss of $0.4 million (FY2020 H1: gross profit $0.3 million)
for the Period;
-- An impairment reversal recognised in the current period,
compared to a net impairment loss of $1.2 million in FY2020 H1;
-- Employee benefit expense of $1.0 million (FY2020 H1: $3.0 million); and
-- Other expenses were $1.3 million (FY2020 H1: $2.2 million).
Operational review
H1 FY2021 H1 FY2020 % r
Production tonnages
Uitkomst ROM coal (t) 246,229 262,696 (6%)
Sales tonnages
Own ROM coal (t) 127,534 147,234 (13%)
Middlings sales (t) 11,569 14,587 (21%)
139,103 161,821 (14%)
Financial metrics
Revenue/t ($) 61.90 68.11 (9%)
Production costs/saleable tonnes ($) 53.56 59.41 (10%)
-------------------------------------- ---------- ---------- ------
-- 127,534 tonnes ("t") of high quality metallurgical and
thermal coal were sold during the Period (FY2020 H1: 147,234t);
-- An additional 11,569t of high-ash middlings were sold during the Period (FY2020 H1 14,587t);
-- At the end of March 2020, the South African Government
implemented nationwide Covid-19 Level 5 lockdown restrictions ,
resulting in Uitkomst metallurgical and thermal coal mine
("Uitkomst Colliery" or "Uitkomst") being placed on care and
maintenance;
-- In July 2020, mining at the Uitkomst Colliery started to ramp
up. H owever, h igh levels of absenteeism due to Covid-19
preventative measures resulted in coal production for the Period
reducing to 246,229t compared to 262,696t in H1 FY2020, a 6%
decline;
-- The world-wide Covid-19 economic downturn led to a
significant decline in international coal prices, which did not
show signs of recovery until November 2020;
-- A number of Uitkomst's customers suspended operations to
comply with lockdown regulations which negatively impacted Uitkomst
coal sales;
-- Covid-19 restrictions continued to impede activities at the
Company's other projects, being the Makhado hard coking coal
project ("Makhado Project"), Vele semi-soft coking and thermal coal
colliery and Greater Soutpansberg Projects (collectively, the
"Limpopo Projects"), which remain in various stages of
development;
-- Following the implementation of a safety programme during the
Period, the Uitkomst mine reported an improved safety record with
four lost-time injuries ("LTIs") during the Period (FY2020 H1:
seven LTIs); and
-- The Company recorded 27 positive Covid-19 cases at Uitkomst
and zero cases at the Limpopo Projects during the Period.
Corporate and market features
-- During the Period, the $16.4 million (ZAR240 million)
Industrial Development Corporation of South Africa Limited ("IDC")
loan facility ("IDC Facility"), of which $8.2 million (ZAR120
million) had been drawn in a prior year (the "First Drawdown"), was
restructured. An additional $2.7 million (ZAR40 million) was drawn
during the Period and the remaining undrawn balance of $5.5 million
(ZAR80 million) was cancelled;
-- The restructuring of the IDC Facility was conditional upon
the Company raising $0.9 million (ZAR15 million) of new equity and
this condition was satisfied in August 2020 with the issue of
13,331,433 new ordinary MC Mining shares;
-- The IDC Facility is to be repaid on 31 July 2021 and the
Company will seek to negotiate a deferred settlement over time for
repayment of the First Drawdown, with the balance expected to be
rolled into the previously announced new Makhado Project Phase 1
loan facility with the IDC, subject to the Company raising an
additional $22.9 million (ZAR335 million) (the "Additional
Funding"). In the event that the parties cannot reach agreement on
further deferment terms or the Company does not repay the loan by
the repayment date, the financing documentation allows for the IDC
Facility to be converted into equity;
-- The Company continues to progress a number of debt/equity
funding initiatives to raise the Additional Funding for development
of the Makhado Project;
-- Pressure on API4 thermal coal prices following the spread of
Covid-19 resulted in average prices for the six months declining to
$64/t compared to $69/t in FY2020 H1;
-- Subsequent to the Period-end, Brenda Berlin resigned as
Acting Chief Executive Officer ("CEO") and Executive director, and
Non-Executive Director, Sam Randazzo, assumed that role, pending
the appointment of a new permanent CEO; and
-- As at 31 December 2020, the Company had cash and cash
equivalents of $2.0 million compared to cash and cash equivalents
of $2 .7 million at 30 June 2020.
Authorised by
Sam Randazzo
Interim CEO
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.
For more information contact:
Tony Bevan Company Secretary Endeavour Corporate Services +61 08 9316 9100
Company advisors:
James Harris / James Dance Nominated Adviser Strand Hanson Limited +44 20 7409 3494
Rory Scott Broker (AIM) Tennyson Securities +44 20 7186 9032
James Duncan 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 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.
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