JSE-listed MC Mining posted a narrower loss after tax of $800 000 for the six months ended December 31, 2021, compared with the $2.7-million loss after tax posted for the six months ended December 31, 2020.

Revenue of $13-million and cost of sales of $10.9-million resulted in a gross profit of $2.1-million for the period.

As at period end, the company had cash and cash equivalents of $1.9-million, compared with cash and cash equivalents of $1-million as at June 30, 2021.  

The Uitkomst metallurgical and thermal coal mine sold 107 953 t of high-quality metallurgical and thermal coal during the period under review.

An additional 11 655 t of high-ash middlings were sold during the period.

The higher global demand for coal post the Covid-19 pandemic resulted in a significant increase in international prices with an average API4 coal price of $151/t achieved for the period.

MC Mining says it continues to progress a number of debt or equity funding initiatives to raise the additional financing required to develop the Makhado hard coking coal project.

The company reported limited activities at its other projects during the period, with these being the Vele semi-soft coking and thermal coal colliery and the Greater Soutpansberg projects, both in Limpopo.

CORPORATE

The Industrial Development Corporation of South Africa (IDC) has provided longstanding commitment to the development of Makhado and has provided a loan of $10-million (R160-million), excluding interest.

This funded the progress of the project to its fully-permitted status, as well as partially funded the acquisition of the surface rights over the project area.

During the period, the IDC extended the date for repayment to January 31, and subsequent to the end of the period, this was further extended to November 30.

During July 2019, the IDC granted MC Mining a conditional $15.4-million (R245-million) term loan facility for the development of Makhado.

OTHER

MC Mining also completed the acquisition of the Lukin and Salaita properties, being the key surface rights for the Makhado project, with the settlement of the deferred balance of $2.6-million (R40.6-million) at the end of February.

Moreover, it entered into a $5.7-million (R86-million) convertible advance and subscription agreement with South Africa-based mining group Senosi Group Investment Holdings (SGIH).

SGIH has a successful record of developing and operating coal mines in South Africa and the transaction is of great significance as the company moves closer to finalising a funding package to develop the Makhado project.

At the date of the interim financial report, SGIH had paid $2.7-million (R40-million) in terms of the agreement.