- MC Mining’s (MCM) subsidiary, Baobab Mining and Exploration, gets a payment extension for the Makhado hard coking and thermal coal project in South Africa
- MCM completed the purchase three years ago but was required to make a deferred payment of R35 million (A$3.1 million) by January 10, 2022, which has been extended to February 28
- In addition, the company has requested another extension to two loans granted by the Industrial Development Corporation (IDC) of South Africa
- The extensions will allow MCM to delay the repayment date for one loan and extend the drawdown date of the other due to the delay in Makhado’s development
- Company shares have been trading down 4.26 per cent at 9 cents each
MC Mining’s (MCM) subsidiary, Baobab Mining and Exploration, has been given a payment extension relating to the Makhado hard coking and thermal coal project.
In January 2019, Baobab completed the purchase of the Lukin and Salaita properties, which are the key surface rights required for the South Africa-based project.
The subsidiary paid R35 million (A$3.1 million) at the time and, as part of the acquisition terms, MC Mining would pay the R35 million balance of the purchase by January 10, 2022.
MC Mining didn’t clearly state the reason for requesting the extension but was pleased the vendor agreed to extend the payment to February 28, 2022. In the meantime, MCM has elected to pay an instalment of R6 million (A$532,263) by January 12 which will be deducted from the deferred payment to be made next month.
In addition, MCM was granted an extension to the repayment date of an R160 million (A$39.3 million) loan to January 31, 2022. This loan was facilitated by the Industrial Development Corporation (IDC) of South Africa.
The IDC also agreed to extend the terminal drawdown date of an additional R245 million (A$21.7 million) term loan to the same date. This loan was secured in mid-2019 to fund the initial construction of the Makhado hard coking coal project.
However, given the delay in finalising the funding for the project, MC Mining has now requested another extension for both the repayment date of the existing R160 million plus interest and the terminal drawdown date of the R245 million loan.
The IDC is yet to respond to the request but if it is approved, the extensions will be to May 31, 2022.
Shares in MC Mining were down 4.26 per cent to trade at 9 cents each at 3:02 pm AEDT.