Following shareholders’ rejection of a second tranche of funding by resources investor Senosi Group Investment Holdings (SGIH) on July 15, Aim-, ASX- and JSE-listed coal explorer, developer and miner MC Mining has agreed to repay SGIH the $20-million advanced by it as part of a broader $40-million second tranche loan.
On February 1, MC Mining entered into a staged R86.04-million (about $5.6-million) convertible advance and subscription agreement with SGIH.
As part of the funding deal, MC Mining agreed to issue SGIH up to 71.70-million new ordinary shares of no par value, following which SGIH initially loaned MC Mining R46.04-million (about $3-million) which made up SGIH’s first tranche of funding to the miner.
Subsequently, this was converted by MC Mining into 38.36-million new ordinary shares – issued to SGIH on April 6, resulting in the investor acquiring 19.9% of MC Mining’s issued share capital.
As part of the funding agreement, SGIH also conditionally agreed to loan MC Mining up to a further R40-million as part of a second-tranche package, that would, subject to the receipt of all required approvals, convert into an additional 33.33-million new ordinary shares, at R1.20 apiece.
The first two instalments of the second tranche funding, totalling R20-million ($1.3-million) were advanced to MC Mining in April and May, respectively.
However, the second-tranche package was subject to MC Mining shareholder approval at a meeting on July 15, where the requisite shareholder approval was not obtained.
As such, the final two instalments of the second-tranche funding will not be advanced and the amount already advanced under the second-tranche funding deal now becomes repayable by MC Mining within 30 days.
MC Mining reports that it will repay this R20-million loan from SGIH using part of the R60-million standby loan facility with Dendocept, as well as internal cash resources.
Going forward, MC Mining notes that, by using funds from the Dendocept loan and considering the prevailing forward API4 coal prices and management of group facilities, the company’s cash runway is expected to extend to beyond November.
In addition, MC Mining is pursuing several alternative options to secure the necessary funding for the construction of its Makhado project.