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MC Mining pays final instalment for acquisition of Makhado

1st March 2022

By: Darren Parker

Creamer Media Contributing Editor Online

     

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JSE-listed coal mining company MC Mining subsidiary Baobab Mining & Exploration has paid the final instalment of R35-million to the Lukin and Salaita property owners to secure the purchase of key surface rights for the Makhado hard coking coal project, in Limpopo.

MC Mining on January 11 announced that Baobab and the property vendor had agreed to extend the due date for payment to February 28.

Now that the final instalment has been paid, the mortgages over the properties held by the vendor are in the process of being released, the company said on March 1.

“Payment of the final instalment . . . and the release of security over key surface rights for the Makhado project is a significant breakthrough for MC Mining,” said MC Mining interim CEO Sam Randazzo.

The R35-million payment was sourced from funds advanced under the staged R86-million convertible advance and subscription agreement with mining group Senosi Group Investment Holdings (SGIH).

MC Mining said it had already developed a positive working relationship with SGIH and that its successful record of developing and operating coal mines in South Africa was of significance as the finalisation of a funding package to develop the Makhado project drew closer.

To date, SGIH has advanced R40-million to MC Mining in terms of the agreement. An additional R6.04-million is due to be advanced by March 31 and, subject to the approval of the South African Reserve Bank, the total advances of R46.04-million will convert into 38.36-million new ordinary MC Mining shares at R1.20 a share.

This will result in SGIH owning 19.9% of MC Mining’s total issued share capital. The issue price of R1.20 a share represents a premium of 15% above the company’s JSE closing share price on February 28.

MC Mining said SGIH had also agreed to advance an additional R40-million to the company between April and July, which will convert into 33.33-million new ordinary shares at R1.20 a share, subject to the receipt of all required approvals, including the approval of MC Mining’s shareholders.

MC Mining previously noted on January 28 that the Industrial Development Corporation of South Africa (IDC) had agreed to extend the repayment date for the R160-million loan, plus accrued interest, to November 30.

The IDC also agreed to extend the terminal drawdown date of the additional R245-million IDC term loan for the development of Phase 1 of Makhado to the same date, subject to the IDC re-affirming its due diligence.

Randazzo said these developments have ensured that MC Mining was “well placed and in the best position it has been for several years to finalise the funding package required to develop the Makhado project.”

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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