Mr Sam Randazzo, MC Mining’s interim CEO, commented: “Payment of the final instalment of R35 million and the release of security over key surface rights for the Makhado Project is a significant breakthrough for MC Mining. This, together with the funding provided by SGIH and the IDC’s commitment, has the company well placed and in the best position it has been for several years to finalise the funding package required to develop the Makhado Project.” Generic photo.
MC Mining Limited announced last week that the final instalment of R35 million has been paid by its subsidiary, Baobab Mining & Exploration, for the farms Lukin and Salaita. These two farms entail the key surface rights for the Makhado hard-coking coal project (Makhado Project) just north of the Soutpansberg.
This announcement follows an earlier announcement by the mining company on 11 January this year wherein they stated that they had asked for an extension of the due date for final payment to 28 February. With final payment made, the properties are now in the process of being released.
The R35 million payment was sourced from funds advanced under the staged R86 million Convertible Advance and Subscription Agreement (the agreement) with South African-based mining group Senosi Group Investment Holdings Proprietary Limited (SGIH), announced by the company on 1 February this year. MC Mining said it had already developed a positive working relationship with SGIH and its successful track record of developing and operating coal mines in South Africa was of great significance as the company [MC Mining] moved closer to finalising a funding package to develop the Makhado Project.
“To date, SGIH has advanced R40 million to the company on time and in full compliance with the agreement. An additional R6 036 691 is due to be advanced by 31 March 2022 and, subject to approval of South Africa’s Reserve Bank, the total advances of R46 036 691 will convert into 38,363,909 new ordinary MC Mining shares at R1.20 per share. This will result in SGIH owning 19.9% of the company’s total issued share capital,” said MC in their press statement. The issue price of R1.20 per share, they added, represents a premium of 15% above MC Mining’s JSE closing share price on 28 February 2022. “SGIH has also agreed to advance an additional R40 million to the company between April and July 2022, which is to convert into 33 333 333 new ordinary shares at R1.20 per share, subject to the receipt of all required approvals, including the approval of MC Mining’s shareholders,” said MC Mining.
As announced on 28 January this year, MC Mining said that the Industrial Development Corporation of South Africa Limited (IDC) had agreed to extend the repayment date for the R160 million loan, plus accrued interest, to 30 November 2022. “The IDC also agreed to extend the terminal drawdown date of the additional R245 million IDC term loan for the development of Phase 1 of Makhado, to 30 November 2022, subject to the IDC re-affirming its due diligence,” said MC Mining.
Mr Sam Randazzo, MC Mining’s interim CEO, commented: “Payment of the final instalment of R35 million and the release of security over key surface rights for the Makhado Project is a significant breakthrough for MC Mining. This, together with the funding provided by SGIH and the IDC’s commitment, has the company well placed and in the best position it has been for several years to finalise the funding package required to develop the Makhado Project.”
Date:11 March 2022 - By: