MC Mining secures R60m loan to progress its Makhado project
Coal miner MC Mining has entered into a R60-million standby loan facility with Dendocept – a 1.5% shareholder in the company – to progress early works at the Makhado hard coking coal project, enhance specific areas of the Makhado bankable feasibility study and conduct geotechnical and confirmatory drilling programmes, as well as to fund group working capital.
As such, Dendocept will advance up to R60-million to MC Mining’s wholly-owned subsidiary, GVM Metals Administration – the group administration company in South Africa.
MC Mining CEO Godfrey Gomwe says the loan facility reflects continued shareholder support and will contribute to group working capital while the Makhado fundraising process is completed.
The loan facility, unsecured and guaranteed by MC Mining, is available for a period of 12 months from first drawdown and must be repaid on or before the end of this period.
Interest on the loan will be paid monthly, calculated using the prevailing South African prime interest rate (currently 8.25%) in addition to a margin of 3%, similar to that levied on the current bank financing in the group.
The outstanding balance on the final maturity date is payable in cash or convertible to MC Mining equity at a price per share calculated as the prevailing 30-day volume weighted average price minus 15% on the date of conversion.
The facility will also not incur any use charges and can be cancelled prior to the final maturity date.
MC Mining continues to progress the remainder of the Makhado funding requirements and anticipates that this will be concluded in the third quarter.
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