MC MINING, a South African coal producer and development company, cautioned investors today regarding recent trade in its share price which has increased about 138% in 30 days, saying it continued to work on its Makhado project.
Commenting on business improvements it was making on Makhado – a thermal and metallurgical project in Limpopo province – the company said there was “no certainty” its initiatives would bear fruit.
The announcement was signed off by Godfrey Gomwe, the newly installed CEO and MD of MC Mining following a shareholder driven board coup earlier this year.
Makhado is scoped to produce one million tons of coal comprising 540,000 tons of hard coking coal and 570,000 tons of thermal coal by-product. Makhado needs a total of R575m ahead of development of the first phase of the project.
Funding has been hard to source over the years but MC Mining said today the company was likely to launch an equity issue in addition to the final instalment of debt it was arranging.
On June 6, MC Mining said it had secured a R60m standby loan facility with one of its shareholders Denocept Proprietary with some of the funds earmarked for early works at the firm’s Makhado thermal and metallurgical coal project.
The loan will be a precursor to securing the final block of funding Makhado.
Gomwe was previously chief operating officer of Anglo American and prior to that headed up the group’s thermal coal operations in South Africa. He is currently a non-executive director of Orion Minerals and AECI, the chemicals company.
Coal prices are surging at the moment owing to Russia’s invasion of Ukraine which has resulted in sanctions on Russian energy exports. As a result, European and Asian buyers have scuttled for new sources of energy which has brought coal back into play.