[miningmx.com] — SOUTH African-based mineral exploration and development company, Miranda Mineral Holdings Limited (MMH), on Monday removed former CEO and current non-executive direct Ron Nel, who had instituted business rescue proceedings against the company. The company announced it had undertaken funding programmes to successfully continue trading in the normal course of business for at least the next 12 months.
The Board said it believed the business rescue application was not in the best interests of the company, its shareholders, employees and creditors, and the board would vigorously defend the application, and seek a judgment in this regard.
The company, through its legal advisor, is currently responding to the application as well as the intervening and supporting applications. It was not possible to advise shareholders when the matter might be heard, if at all.
Ron Nel controls The Ronald John Nel Trust, which holds approximately 3.57% shareholding in the company. Thirty-four other applicants, who hold approximately 0.0010% shareholding in Miranda, have made an intervening application to support Nel’s application.
On a more positive note, the company announced on Monday that Esther Johnson has been appointed Financial Director, with effect from September 2.
Miranda’s chairperson, Lulama Mokhobo, said Johnson’s appointment formed part of the strategic realignment of the company, which included the recent appointment of Andrew Johnson, who is no relation to Esther Johnson, as the CEO.
Mr Johnson, a mining engineer, is in the process of prioritising the company’s asset development schedule, and advancing the feasibility study of the Sesikhona coal project, including the finalisation of product offtake agreements, while also proceeding with early-stage studies for the Uithoek and Burnside coking coal projects.
In related news, the company has negotiated additional loan funding facilities amounting to R20m from Miranda’s two largest shareholders, Global PS Mining Investments Company Limited (R15m) and Yakani Resources (R5m). This is in addition to the existing facilities and loans of approximately R17.5m and R2.5m, respectively, that have been made available by the two shareholders previously.
The two shareholders jointly hold more than 40% of the company’s issued share capital and according to Miranda have, independently from each other, expressed confidence in the actions being taken by the board. The two respective shareholders have informed the board that they support the continued assessment and expeditious development of Miranda’s asset base.
In her concluding statement, Mokhobo, said: “The board has approved a long-term financing plan in the form of a capital raising by way of a rights issue to all shareholders, which is anticipated to be effected in early 2012 and will be subject to all shareholder and regulatory approvals”.
The company only had R30m in the bank in early 2009, but zero debt. With only seven staff members and low overheads it was expected to do well, with Jacob Zuma, who hails from KwaZulu-Natal, apparently a vocal fan of the company (those reports emerged before he became President).
The KZN coal fields Miranda is focused on contain thinner layers of coal, but of a better quality than in Mpumalanga. Miranda’s coal is ideal for the steel industry, and should fetch a higher price than power station coal.
The company reported a headline loss of 6.7 cents in 2010 from a loss of 4.5 cents in 2009. Its share price is currently at 30 cents, off a one year low of 26 cents, but well off the one year high of 79 cents.
