South African-focused Coal miner MC Mining made "pleasing" progress with various mining and corporate activities in the quarter ended December 31, MD & CEO Godfrey Gomwe says.
"The most notable achievements being the completion of the A$40-million rights issue [in November], the recommencement of operations at the Vele Colliery and the extension of the marketing agreement with Overlooked.
"The completion of the rights issue confirmed the continued robust support of our anchor shareholders and provided an opportunity for new equity investors to participate in the company’s maturing growth strategy. This was completed despite the current volatile market and uncertain economic environment.
"The additional capital has transformed the company’s balance sheet and is a further key milestone towards the complete financing of the flagship Makhado project and the positioning of MC Mining as the only large-scale producer of hard coking coal in South Africa," he adds.
During the quarter, MC Mining had entered into a contract mining agreement with Hlalethembeni Outsourcing Services to recommission, upgrade and operate its Vele Aluwani Colliery (also known as the Vele or Colliery). This resulted in the recommissioning of the Vele Colliery coal processing plant (CPP).
The Vele Colliery had been on care and maintenance for almost ten years prior to this.
The miner also completed a CPP optimisation study at its Makhado project.
The proposed optimisation will potentially increase the Makhado CPP's yearly run-of-mine feed capacity from three-million to four-million tonnes a year.
The study findings will be used in the detailed CPP and infrastructure design work, as well as revised mine plans. These are expected to be completed during the first quarter of the 2023 calendar year.
MC Mining's directors have approved expenditure of R71.3-million (about $4.1-million) for early works at Makhado and this is expected to commence early this year. The funding initiatives for Makhado continued during the period and these initiatives are expected to be finalised in first half of this year.
Meanwhile, the Uitkomst Colliery's production for the December quarter decreased by 7% year-on-year to 99 336 t.
Production was adversely affected by geological conditions as well as loadshedding (rotational power cuts by national utility Eskom), which interrupted underground mining operations.
Coal sales amounted to 56 817 t, comprising 13 095 t of high-grade domestic sales, 2 975 t of lower-grade middlings coal and exports of 40 747 t.
MC Mining's coal sales and marketing agreement with Overlooked has been extended to June 30 this year.