MC Mining Ltd on Wednesday said it is exploring a number of alternatives to raise additional funding for its flagship Makhado coking coal project in Limpopo.
The Western Australia-based coal miner owns Uitkomst Colliery, an operating metallurgical and thermal coal mine, and Makhado project, an exploration and evaluation asset.
Releasing interim financial results for the six months that ended December 31 on Wednesday, MC Mining said pretax loss narrowed to $264,000 from $1.3 million a year earlier. But after-tax loss was $1.3 million, widened from $800,000, due to incurring a tax expense, compared to a tax credit a year before.
Revenue rose to $14.0 million, up 7.7% from $13.0 million, lifting gross profit to $3.9 million from $2.1 million.
Basic loss per share shrank to 0.50 US cents from 0.54 cents. Headline loss per share was the same, narrowing to 0.50 cents from 0.54 cents.
MC Mining said the construction of the Makhado project is conditional on the company raising further funding.
It revealed that it is exploring and progressing a number of alternatives to raise the additional funding including, the issue of new equity, the sale of minority stakes in the corporate entities holding the Makhado project, and further debt funding.
The conclusion of the additional funding is by its nature an involved process, MC Mining warned, and is subject to successful negotiations with the external funders and shareholders, as well as the potential funder’s due diligence procedures.
It said ‘there can be no guarantee that the required funds will be raised’.
MC Mining said the existing R 160 million loan facility from Industrial Development Corp of South Africa is repayable on June 30. It said its cash flow forecasts include the assumption that it can negotiate a deferred settlement to when the Makhado project is at steady state production, as opposed to being payable in June.
Shares in MC Mining lost 7.7% to R 1.93 on Wednesday in Johannesburg. In London, they were untraded at 10.10 pence.
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