MC Mining has raised R10m following a subscription for shares by privately-held Columbia Skies Holdings (CSH), the company said today.
The share subscription will tide MC Mining over whilst it concludes the balance of funding for phase one of its $32m Makhado project in South Africa’s Limpopo province.
CSH is wholly-owned by Pitso Madibo, a black industrialist, MC Mining said. He will buy about 7.8 million shares at a 10% discount or R1.27/share and give CSH a 4.8% interest in MC Mining.
“The investment by CSH ensures we have the necessary resources to be able to complete the composite funding package, anticipated to be by the end of 2020, as well as providing working capital for the initial period of construction in the first half of 2021 calendar year,” said Brenda Berlin, interim CEO of MC Mining.
“We have made significant progress subsequent to the lifting of the COVID-19 lockdown and are in discussions with various potential funders for the balance of the Phase 1 funding,” Berlin added.
MC Mining said in July it had agreed to sell 14.2 million shares to the Industrial Development Corporation IDC as part of financing for Makhado. As a result, the IDC’s stake in the Makhado project will increase to 6.7% from 5%.
Makhado phase 1 has a nine-year life-of-mine and is forecast to produce 540,000 tons of hard coking coal annually as well as 570,000 tons of an export quality thermal coal by-product, the company said.