Coal miner MC Mining sold 127 534 t of high-quality metallurgical and thermal coal during the interim period ended December 31, 2020.
An additional 11 569 t of high-ash middlings were also sold during the period.
When South Africa went into a nationwide Covid-19 lockdown in March 2020, the company’s Uitkomst metallurgical and thermal coal mine was placed on care and maintenance.
In July 2020, however, mining at the Uitkomst Colliery started to ramp up, despite high levels of absenteeism owing to Covid-19 preventive measures.
This resulted in coal production for the interim period reducing by 6% year-on-year to 246 229 t.
Overall, the global pandemic-related economic downturn led to a significant decline in international coal prices, MC Mining said on March 15, noting that this “did not show signs of recovery until November 2020”.
Covid-19 restrictions continued to impede activities at the company’s other projects, being the Makhado hard coking coal project, the Vele semi-soft coking and thermal coal colliery and the Greater Soutpansberg Projects (collectively known as the Limpopo projects), which remain in various stages of development, MC Mining confirmed.
In terms of the company’s financials, MC Mining reported a loss after tax of $2.7-million, or $0.018 a share, for the six months under review, compared with a loss of $0.049c a share in the first half of the prior financial year.
Revenue was $8.8-million and cost of sales $9.2-million, which resulted in a gross loss of $400 000 for the six months under review.
As at December 31, 2020, the company had cash and cash equivalents of $2-million compared with cash and cash equivalents of $2.7-million at June 30, 2020.
Further, during the period, the $16.4-million Industrial Development Corporation (IDC) of South Africa loan facility, of which $8.2-million had been drawn in a prior year, was restructured. An additional $2.7-million was drawn during the period and the remaining undrawn balance of $5.5-million was cancelled.
The restructuring of the IDC facility was conditional on the company raising $900 000 of new equity and this condition was satisfied in August 2020 with the issue of more than 13.3-million new ordinary MC Mining shares.
The IDC facility is to be repaid on July 31, 2021, and MC Mining will seek to negotiate a deferred settlement over time for repayment of the first drawdown, with the balance expected to be rolled into the previously announced new Makhado Project Phase 1 loan facility with the IDC, subject to the company raising an additional $22.9-million.
In the event that the parties cannot reach agreement on further deferment terms or the company does not repay the loan by the repayment date, the financing documentation allows for the IDC facility to be converted into equity, MC Mining said.