- MC Mining (MCM) has satisfied a condition of its restructured loan agreement with the Industrial Development Corporation of South Africa
- The condition mandated the company needed to secure commitments for the issue of new equity, for an aggregate $900,000
- Under the terms of the agreement, MC Mining will now draw down approximately $2.4 million
- The company plans to use those funds to advance its Makhado hard coking coal project and for general working capital
- MC Mining shares are steady on the market today, trading for 10.5 cents each
MC Mining (MCM) has satisfied a condition of its restructured loan agreement with the Industrial Development Corporation of South Africa.
The condition of the IDC’s loan agreement was for MC Mining to secure commitments for the issue of new equity. The commitments had to be worth an aggregate R15 million (approximately A$900,000).
The new equity will be issued at a nine per cent discount to MC Mining’s closing share price on July 17, 2020. This will result in the issue of approximately 14.2 million new ordinary shares in the company.
The IDC will receive approximately 1.1 million warrants, increasing its participation in the Makhado Project from five per cent to 6.7 per cent.
Having satisfied this agreement condition, MC Mining will now draw down R40 million (approximately A$2.4 million) from the IDC loan. The company plans to use the funds to advance its Makhado hard coking coal project. The company will also put some of the money towards general working capital.
MC Mining’s Acting Chief Executive Officer, Brenda Berlin, commented on the company’s success in meeting the agreement’s condition. She also explained the company’s movements going forward into the future.
“The issue of the New Equity to existing and new shareholders underlines the robust fundamentals and compelling returns of the Makhado Project,” Brenda stated.
“This is a further significant step for MC Mining, and we will now focus on securing the balance of the phase one funding, delayed by the COVID-19 lockdown,” she continued.
“The company will also continue negotiations to defer the November 2020 repayment pf existing debt owing to the IDC until the Makhado Project is generating positive cash flows,” Brenda said.
The first phase of the Makhado Project has a nine-year life-of-mine and could produce 540,000 tonnes of hard coking coal per year.
Assuming that MC Mining successfully secures the balance of phase one funding, construction at Makhado should start sometime around the end of 2020 or beginning of 2021.
MC Mining shares are steady on the market today, trading for 10.5 cents each at 12:46 pm AEST.