MCM.L Share News (MCM)

(Alliance News) - MC Mining Ltd on Friday said production was higher in its third quarter, although Covid-19 lockdown measures were not implemented until the last few days of the period and have since resulted in the Uitkomst Colliery being placed on care and maintenance.

For the three months ended March 31, run-of-mine coal production from Uitkomst rose 12% to 127,122 tonnes from 113,190 tonnes the year before. Quarterly sales of high-grade metallurgical and thermal coal increased to 64,264 tonnes from 61,956 tonnes and high-ash middlings coal sales rose to 8,678 tonnes year-on-year from 8,315 tonnes.

The average API4 thermal coal price for the third quarter was USD79 per tonne, down from USD83 per tonne the year before.

Before the South Africa Covid-19 lockdown starting March 26, Utikomst was generating "pleasing production trends and run-of-mine coal production", MC Mining said, but it since has been placed on care and maintenance.

Lockdown restrictions will begin to ease from Friday next week, South African President Cyril Ramaphosa announced in a speech Thursday night.

This will help as well with MC Mining's development projects in the Limpopo province, which have been hurt by the lockdown.

Chief Executive Brenda Berlin said: "The spread of the Covid-19 virus resulted in the South African government declaring a lockdown from 26 March 2020 and key customers significantly reduced or suspended operations. The lockdown also led to the Uitkomst Colliery being placed on care and maintenance and the company supports all measures to limit the impact of the virus. Safety of our people is critical and activities at all of our sites will only resume when it is safe to do so.

"The lockdown also impacted MC Mining's corporate office and Makhado, Vele and GSP sites. We implemented contingency programmes, ensuring key activities continue remotely in isolated, safe environments. The company continues to interact with potential domestic and international capital-providers during the lockdown and anticipates that the process to secure the balance of funding required to commence development of phase 1 of Makhado will be completed in Q2/Q3 CY2020 with construction commencing shortly thereafter."

Shares in MC Mining were up 6.3% at ZAR1.70 in Johannesburg on Friday, while in London shares were flat at 8.50 pence.

By Anna Farley; annafarley@alliancenews.com

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