MC Mining Limited Surface rights acquired for the Makhado Project (4033H)
November 15 2018 - 1:00AM
UK Regulatory
TIDMMCM
RNS Number : 4033H
MC Mining Limited
15 November 2018
ANNOUNCEMENT 15 November 2018
KEY SURFACE RIGHTS ACQUIRED FOR THE MAKHADO PROJECT
MC Mining Limited ("MC Mining" or the "Company") is pleased to
announce that its subsidiary, Baobab Mining & Exploration (Pty)
Ltd ("Baobab"), has reached agreement on the terms and conditions
under which it will acquire the two key properties required for its
Makhado hard coking and thermal coal project ("Makhado Project" or
"Makhado"). The Purchase Agreement (the "Agreement") will result in
Baobab owning the Lukin and Salaita properties (the "Properties")
and is subject to a suspensive condition, which the parties have
every expectation will be met in early January 2019. As previously
stated the Company has been pursuing various avenues, including
legal and negotiation on commercial terms with the owner, a
privately owned company, who utilises the Properties for commercial
hunting purposes.
In terms of the Agreement, the Properties will be acquired for
R70 million (US$4.8 million) to be settled in two equal tranches of
R35 million (US$2.4 million) with the Properties pledged as
security until the purchase price (including any accrued interest)
is settled. The initial tranche is payable on transfer of the
Properties while Baobab will have access to the Properties upon
payment of this amount to the conveyancing attorneys.
The second tranche will accrue interest at the South African
prime interest rate (currently 10.0%) less 3.0% (from date of
transfer) and is payable on the earlier of:
-- the third anniversary of the transfer of the Properties; or
-- the first anniversary of production of coal underlying the Properties; or
-- completion of a potential land claims and expropriation
process that would, in all likelihood result in Baobab receiving
market related compensation under present legislation. Should the
Properties be expropriated in favour of the land claimants, MC
Mining will negotiate access terms with the Minister of Land
Affairs and the successful claimants who are expected to be
communities who have a shareholding in Baobab.
David Brown, MC Mining's Chief Executive Officer commented:
"The Agreement to acquire Lukin and Salaita is a significant
step for MC Mining and completes the suite of surface rights
required for our permitted flagship Makhado Project. With the
acquisition of the Properties, the Company can proceed with the
geotechnical and related studies for the mine's infrastructure. The
initial tranche of the purchase price will be funded from internal
cash flows.
MC Mining has made substantial progress on the Makhado Project
milestones, including an off-take agreement for approximately half
of the hard coking coal to be produced at the mine. Negotiations
for the sale of the remaining hard coking coal as well as the
thermal coal are at an advanced stage while funding initiatives are
also progressing. The Company will keep shareholders appraised on
these processes as well as the results of the geotechnical studies,
with further updates expected in the March FY2019 quarter."
AUTHORISED BY:
David Brown
Chief Executive Officer
For more information contact:
David Brown Chief Executive Officer MC Mining Limited +27 10 003 8000
Brenda Berlin Chief Financial Officer MC Mining Limited +27 10 003 8000
Tony Bevan Company Secretary Endeavour Corporate Services +61 08 9316 9100
Company advisors:
Financial PR
Jos Simson/ Gareth Tredway (United Kingdom) Tavistock +44 20 7920 3150
Ross Allister/David McKeown Nominated Adviser and Broker Peel Hunt LLP +44 20 7418 8900
Charmane Russell/Olwen Auret Financial PR (South Africa) R&A Strategic Communications +27 11 880 3924
Investec Bank Limited is the nominated JSE Sponsor
About MC Mining Limited:
MC Mining is an AIM/ASX/JSE listed coal exploration, development
and mining company operating in South Africa. MCM's key projects
include the Uitkomst Colliery (metallurgical and thermal coal),
Makhado Project (coking and thermal coal). Vele Colliery (coking
and thermal coal), and the Greater Soutpansberg Projects
(MbeuYashu).
Forward-Looking Statements
This Announcement, including information included or
incorporated by reference in this Announcement, may contain
"forward-looking statements" concerning MC Mining that are subject
to risks and uncertainties. Generally, the words "will", "may",
"should", "continue", "believes", "expects", "intends",
"anticipates" or similar expressions identify forward-looking
statements. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those expressed in the forward-looking statements. Many of
these risks and uncertainties relate to factors that are beyond
MCM's ability to control or estimate precisely, such as future
market conditions, changes in regulatory environment and the
behaviour of other market participants. MCM cannot give any
assurance that such forward-looking statements will prove to have
been correct. The reader is cautioned not to place undue reliance
on these forward looking statements. MCM assumes no obligation and
do not undertake any obligation to update or revise publicly any of
the forward-looking statements set out herein, whether as a result
of new information, future events or otherwise, except to the
extent legally required.
Statements of intention
Statements of intention are statements of current intentions
only, which may change as new information becomes available or
circumstances change.
Regulatory
This announcement is inside information for the purposes of
Article 7 of Regulation 596/2014.
This information is provided by RNS, the news service of the
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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