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MC Mining eyes expansion with new Uitkomst loan
MC Mining eyes expansion with new Uitkomst loan. The coal producer has secured a R20 million facility from Absa which may be used for potential expansion opportunities at Uitkomst.
MC Mining has secured a R20 million loan facility from Absa to help fund capital requirements at its 70%-owned Uitkomst Colliery - as well as potential expansion opportunities.
The coal producer changed its name from Coal of Africa last December and underwent a 20-for-one share consolidation to try to attract bigger investors. It bought Uitkomst from Pan African Resources in June 2017 to generate cash during the pre-production phase of its Makhado mine in Limpopo.
It said cash flows generated by Uitkomst had been greater than envisaged since its acquisition. Uitkomst transitioned to an owner-operated mine in August with the acquisition of the independent underground mining contracts business operations, including mining equipment and the transfer of about 340 contractor employees. Following this, the colliery secured five-year, R15 million asset finance facility from Absa, which was used to finance new underground mining equipment.
The new facility has a floating coupon at the prime interest rate plus 1%, with Uitkomst debtors ceded as security.
The facility further enhances our relationship with Absa and is an endorsement by an independent financial institution of the potential of Uitkomst Colliery and its ability to deliver on tonnage targets coupled with prevailing favourable coal prices," CEO David Brown said. "In addition, MC Mining continues to progress with various initiatives relating to the Makhado hard coking and thermal coal project with further updates to come."
Last month, Makhado secured its first offstage agreement for hard coking coal (HCC) with China's Huadong Coal Trading Center. The off-take will see a minimum of 400 000 tonnes of HCC a year go to Huadong, equal to about half of Makhado's annual production. Makhado is expected to produce up to 800 000 tonnes of HCC annually as well as between 900 000 and one million tonnes of export quality thermal coal.
Its shares rose 6% to R3.51 yesterday.
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By INCE|Connect NewsMC Mining eyes expansion with new Uitkomst loan. The coal producer has secured a R20 million facility from Absa which may be used for potential expansion opportunities at Uitkomst.
MC Mining has secured a R20 million loan facility from Absa to help fund capital requirements at its 70%-owned Uitkomst Colliery - as well as potential expansion opportunities.
The coal producer changed its name from Coal of Africa last December and underwent a 20-for-one share consolidation to try to attract bigger investors. It bought Uitkomst from Pan African Resources in June 2017 to generate cash during the pre-production phase of its Makhado mine in Limpopo.
It said cash flows generated by Uitkomst had been greater than envisaged since its acquisition. Uitkomst transitioned to an owner-operated mine in August with the acquisition of the independent underground mining contracts business operations, including mining equipment and the transfer of about 340 contractor employees. Following this, the colliery secured five-year, R15 million asset finance facility from Absa, which was used to finance new underground mining equipment.
The new facility has a floating coupon at the prime interest rate plus 1%, with Uitkomst debtors ceded as security.
The facility further enhances our relationship with Absa and is an endorsement by an independent financial institution of the potential of Uitkomst Colliery and its ability to deliver on tonnage targets coupled with prevailing favourable coal prices," CEO David Brown said. "In addition, MC Mining continues to progress with various initiatives relating to the Makhado hard coking and thermal coal project with further updates to come."
Last month, Makhado secured its first offstage agreement for hard coking coal (HCC) with China's Huadong Coal Trading Center. The off-take will see a minimum of 400 000 tonnes of HCC a year go to Huadong, equal to about half of Makhado's annual production. Makhado is expected to produce up to 800 000 tonnes of HCC annually as well as between 900 000 and one million tonnes of export quality thermal coal.
Its shares rose 6% to R3.51 yesterday.