A BID for control of MC Mining had been delayed, the company said on Wednesday, adding in its announcement to the JSE shareholders should “do nothing”.
A bidder’s statement formalising an all-cash takeover launched by a consortium in November and including key shareholders Senosi Group Investment Holdings and Dendocept Proprietary was supposed to be lodged early in January. It then should have been mailed to the company in the last week of the month.
However, MC Mining said the consortium’s indicative timetable had been delayed. It did not provide further details. The consortium is said to represent 64.3% of MC Mining’s shareholder base. “The consortium did not provide a revised timetable but did reconfirm its intention to make a takeover offer,” added MC Mining.
MC Mining said an independent board committee formed to review the takeover offer was unable to provide further guidance on the expected timing of the bidders’ statement. “Take no action,” the company advised shareholders.
Chair of the board committee assembled by MC Mining Khomotso Mosehla said in November that the Senosi Group and Dendocept offer was “incomplete” as it only guided to a range of 20 and 23 Australian cents per share. Regulatory approvals from the Australian Stock Exchange were also left outstanding.
MC Mining’s main asset is the Makhado metallurgical and thermal coal project, located in South Africa’s Limpopo province. The project has been on MC Mining’s books for the best part of a decade and handled unsuccessfully by three different managements and boards.
The project’s biggest hurdle is securing funding. In its most recent iteration, Makhado would cost $96m to develop over an 18-month development period. As of July last year, the company had raised an additional A$40m via a rights issue. The finalisation of the outstanding funds were said to be due before the end of 2023.
Following the ouster of previous management, which was chaired by Bernard Pryor and Sam Randazzo, MC Mining’s then CEO, newly installed CEO Godfrey Gomwe announced plans to increase the project’s production by 60% over its life. This was following adjustments to its plan published on June 30 last year.
MC Mining said it would sell 46 million tons of coal from the Makahado project of which about 22.5Mt would be metallurgical coal. The balance of sales consists of thermal coal production.
As a result of the increase in the economically extractable resource the rate of mining annually would increase to to four million tons from an estimate of 3.2Mt previously. The coal handling plant would also be increased to allow for a doubling to four million tons.
