MC Mining secures $16m of further capital support from KDG
Australia- and Johannesburg-listed MC Mining has entered into a loan agreement and a share subscription agreement with its controlling shareholder, Kinetic Development Group (KDG), pursuant to which KDG will provide the company with capital support of up to $16-million in aggregate.
The transaction comprises an unsecured bridge loan of $8-million, to be advanced to the company shortly following satisfaction of the conditions precedent to drawdown, and a subscription by KDG, or by a wholly-owned subsidiary of KDG nominated by it, for new fully paid ordinary shares in the company for an aggregate subscription amount of $16-million to be subscribed in two equal tranches, at an issue price of $0.21 a share.
The bridge loan provides the company with immediate access to working capital in advance of the shareholder meeting at which approval of the share subscription will be sought.
The proceeds of the bridge loan and of the second tranche of the share subscription – the first tranche subscription price being satisfied by way of set-off, so that no cash proceeds arise at the first closing – will be applied towards the business operations and working capital requirements of MC Mining and its subsidiaries in accordance with the cash flow forecast agreed with KDG, including the continued development and commissioning of the Makhado project, in Limpopo, and the sustainability of the company's other operations.
MC Mining’s flagship Makhado hard coking and thermal coal project is located in the Soutpansberg coalfield in South Africa’s Limpopo province. It has been designed to produce about 800 000 t/y of hard coking coal at steady state.
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