MC Mining has launched a R472 million rights offer as it plans to construct a new thermal and metallurgical coal mine in Limpopo.
The company said yesterday that the rights issue offer of new shares in MC Mining would be at an issue price of A$0.20 (R2.32) per new share for eligible shareholders in Australia and New Zealand and R2.36 per new share for eligible shareholders in South Africa.
Senosi Group Investment Holdings and Dendocept Proprietary have underwritten the offer, which would be used to part fund the development of the Makhado project.
Proceeds from the rights issue are critical in terms of the firm’s obligations to some $26m (about R465m) in debt funding that’s also been arranged.
MC Mining CEO and managing director Godfrey Gomwe said the capital raise was a significant development for the company, and the proceeds would also satisfy a requirement for debt funders, who were expected to contribute to the development of the Makhado Project.
“With record global coal prices, this is a very exciting time for MC Mining. The rights issue is transformational for the company and ensures that we have the cornerstone funding for our flagship Makhado Project. The fundraising process has been undertaken in tough equity markets, particularly for junior coal miners, and it is very pleasing to have the support of our large shareholders,” he said.
Gomwe said the Makhado Project had very attractive project economics and was well positioned given the favourable coal price forecasts.
“This is an important milestone in our ambition to become the premier producer of hard coking coal in South Africa and provide long-term returns to our shareholders.
“The proceeds of the rights issue will contribute towards early-works at the project, including confirmatory and geotechnical drilling, civils infrastructure and securing long-lead time equipment for the Makhado coal processing plant,” he said.