(Alliance News) - MC Mining Ltd on Friday said it has concluded its ZAR10.0 million subscription agreement with Columbia Skies Holdings Prop Ltd.
Shares in MC Mining were up 7.3% in Johannesburg at ZAR1.61 in morning trading and up 4.4% in London at 6.00 pence.
Columbia Skies is wholly owned by black industrialist Pitso Madibo and will subscribe for 7.8 million shares in coal miner MC Mining, raising around ZAR10.0 million or about USD600,000.
The shares are to be issued at a 10% discount to their 30-day volume-weighted average price in Johannesburg to Monday this week, being ZAR1.27 per share.
Proceeds will be used for general working capital requirements as well as to progress MC Mining's flagship Makhado hard coking coal project in the Limpopo province of South Africa.
As a result of the subscription, Columbia Skies will hold a 4.8% stake in MC Mining.
MC Mining's acting chief executive, Brenda Berlin, said: "MC Mining previously secured a ZAR245 million (USD14.8 million) loan from the Industrial Development Corporation of South Africa Ltd, a critical component in the Makhado phase 1 debt/equity funding structure.
"We have made significant progress subsequent to the lifting of the Covid-19 lockdown and are in discussions with various potential funders for the balance of the phase 1 funding. The investment by CSH ensures we have the necessary resources to be able to complete the composite funding package, anticipated to be by the end of [calendar year] 2020, as well as providing working capital for the initial period of construction in H1 CY2021."
By Anna Farley; annafarley@alliancenews.com
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Mc Mining (MCM)