MC Mining’s flagship Makhado Project has favourable economics and its phased development is expected to deliver positive returns for shareholders. Makhado has a life-of-mine in excess of 46 years and the project would position MC Mining as South Africa’s pre-eminent hard coking coal (HCC) producer.
The IDC has provided longstanding financial support for the development of the Makhado Project and MC Mining has utilised an IDC loan of R160 million ($11.3 million) to progress Makhado to its fully-permitted status and to partially fund the acquisition of the surface rights over the project area.
The IDC is also a 6.7% shareholder in MC Mining subsidiary, Baobab Mining & Exploration (Pty) Ltd, the owner of the Makhado Project. During the quarter the IDC extended the date for repayment of the existing R160 million loan plus interest, to 31 January 2022.
The IDC also agreed to extend the terminal draw down date in respect of the conditional R245 million ($17.3 million) term loan facility for the development of the Makhado Project, to 31 January 2022, subject to confirming its financial due diligence.
The Company and IDC are also continuing discussions with the objective of aligning repayment of the IDC facilities with the positive cash flows generated by Makhado.
The fully permitted Makhado Project recorded no LTIs (FY2021 Q4: nil) during the quarter.