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MC MINING LIMITED - Key Surface Rights Acquired for The Makhado Project

Release Date: 15/11/2018 09:00
Code(s): MCZ     PDF:  
Wrap Text
Key Surface Rights Acquired for The Makhado Project

MC Mining Limited
Previously Coal of Africa Limited
(Incorporated and registered in Australia)
Registration number ABN 008 905 388
ISIN AU000000MCM9
JSE share code: MCZ
ASX/AIM code: MCM

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       MC Mining Limited     +27 10 003 8000
                        Officer
Brenda Berlin           Chief Financial       MC Mining Limited     +27 10 003 8000
                        Officer
Tony Bevan              Company Secretary     Endeavour Corporate   +61 08 9316
                                              Services              9100

Company advisors:
Jos Simson/ Gareth      Financial PR         Tavistock              +44 20 7920
Tredway                 (United Kingdom)                            3150
Ross Allister/David     Nominated Adviser    Peel Hunt LLP          +44 20 7418
McKeown                 and Broker                                  8900
Charmane Russell/Olwen Financial PR          R&A Strategic          +27 11 880 3924
Auret                   (South Africa)       Communications
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.

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