Coal charts 8A79C678-5D1C-4FC8-B2D1-635F8718F0B9.jpg750x1334 122 KB 8C7D116A-688B-4139-B054-DC62A5F61C1D.jpeg750x1334 195 KB Iâ€™m not sure if anyone still here and watching this stock, but decent rally in both Richards Bay coal prices and coal prices denominated in Rand. I think this could be the catalyst for us to get the deal off. If we didnâ€™t have that delay in bond financing, then an equity house would have given us the required monies to fund Makhado. Coal prices are heading back towards that level. While itâ€™s going to have taken its time in coming Iâ€™m confident David Brown will get this deal away. Weâ€™re due our scheduled quarterly market update at the end of this month. Hopefully, itâ€™s time we got something positive, the big boys invested here have too much at stake for this not to happen, particularly with coal at these prices. Snow and supply conditions in China, plus hedge fund positioning should underpin coal prices for near term
2019 AGM Notes If anyone still invested here etc etc, have are my AGM notes from today Present: David Brown (CEO), Bernard Pryor (Chairman); Various from Tavistock, CompuServe and one other private shareholder. Peel Hunt and Mirabaud also there to see them afterwards; Resolutions were passed over 10 mins. Nothing of note. Last few years DB has made a speech highlighting achievements and outlook, but went straight to questions. I asked a number of questions with the Q&A lasting 20 mins. Both DB and BP spoke with me a bit more openly for 10-mins afterwards. Summary: Makhado funding: Funding being looked at on a company and project basis but again it seems a little out of their hands at present. They have spoken to all the top 6 investors over the last week and are expecting them to come back within the 6-7 days; Bernard Pryor met with Chinese investors in South Africa this week and spelled out the projects, what needs to be invested and given them timelines. Face-to-face meeting with Chinese made him positive and belief something will happen. Everyone still keen on project. Actual funding required for the project is small compared to what the top six have invested do far. Definitely sounds like the most likely scenario is that all the big shareholders will collectively fund the shortfall. Timing is out of their hands They still believe itâ€™s a great project and are frustrated by the lack of progress. They would have got the funding from Mirabaud, but the 3-month delay in getting the bond funding coincided with 30% decline in coal prices and South Africa as an investment destination. Having met with investors BP is positive deal will be done soon, heâ€™s just not sure what it looks like.; They are fully aware of the summer break in SA and want to get this done asap. Once funding is done then everything is ready to go, can begin building immediately; Whatâ€™s plan B if not get funding? Looking at cutting costs further and can sell some assets; Uitkomst is looking a lot better, production higher last quarter and tracking budget with plans that were made now coming to fruition. New management etc taken time to bed in. Development of North Adit is something for 12-months time and will require another ZAR30-60m. Positive on Uitkomst. No huge thoughts on coking coal / thermal coal pricing. Been a dislocate between iron ore and coal. Positive overall. Seemed to think anti-fossil fuels movement has peaked. Positive on Indian/Chinese demand for coal and IRP suggests coal still huge role to play in SA coal generation; Another CGA is on the back burner for the time-being.; Usual chat about GSP â€“ huge project for the next 5-years with Musina/Makhado SEZ etc etc. I read last yearâ€™s AGM notes before the meeting, Last year everyone was massively bulled up having just got the surface rights to Lukin and Salaita. This year, theyâ€™re still excited and the very clear the potential is huge but just need others to play the game. Itâ€™s always nice to speak with people face-to-face, and having met both of them a number of times, itâ€™s nice to have some form of rapport. â€œitâ€™s a great project, and too much been invested for this not to happenâ€ seemed to be my main take-away. Positive with an element of caution. Iâ€™ll follow up next Friday to see if their meetings with investors came to fruition.
quarterly results a bit underwhelming, let's hope next quarter starts to show some mining expertise
Man on a Mission Fin24 â€“ 28 Feb 19 Man on a mission When David Brown left Implats to take over struggling junior miner MC Mining, he wanted to clear the companyâ€™s legacy problems, including taking the valuable Makhado metallurgical coal project forward.
JSE / AIM differential Anyone any idea why JSE trading 1200 ~68p while Aim at 50p? I expect aim to catch up but donâ€™t understand differential
Share Price Jump Today Saw share price jump to 56-60p. Too tempting to take a profit as I am now quite over weight in my portfolio in MCM. So sold 5k at 56.12p. (Now 54-60p). It is not a case that I think that they are a â€˜sellâ€™ as I still have quite a sizeable holding, but I bought this lot as a last gasp purchase - â€˜it cannot go any lower syndromeâ€™ as a relatively low price. I suspect that the share price rise might be the result of a shrewd share price tip in a magazine judging by the number of transactions. It certainly has the legs to outperform most other shares - with I suspect little scope for a significant fall back. Wishing other MCM holders a prosperous 2019! The Buzz
Chapudi Mining Rights Granted Excellent newsâ€¦ good to see the MCM management are still well focussed on their business. Long way to go yet, but moving steadily in the right direction after closing off all the historical issues in the last few years.
Chapudi Mining Rights Granted More good news! I was wondering why the share price quote have moved to 38-43p (ie 41p with a wide spread!). This RNS is not yet posted on my usual source, but since the LSE does not show any recent meaningful deals, I am not sure what a greater UK readership would do. I read this as a significant increase in the value of the assets, as opposed to a short term increase in income. That said, having more assets should help with borrowing requirements. It is good to see also that the price of coal remains strong. cmegroup.com Coal (API4) FOB Richards Bay (ARGUS-McCloskey) Futures Quotes - CME Group Find information for Coal (API4) FOB Richards Bay (ARGUS-McCloskey) Futures Quotes provided by CME Group. View Quotes and that the price of Australian coking coal remains high:- cmegroup.com Australian Coking Coal (Platts) Low Vol Futures Quotes - CME Group Find information for Australian Coking Coal (Platts) Low Vol Futures Quotes provided by CME Group. View Quotes Looking at this website in chat mode for 1 month one wonders that 2 goon news stories should equate to an overall price increase as so far we have just gone back to where we were - around the 42p level. AHA the market must have heard me - now 40-43p (41.5p). It suggests to me that the market price could well be still rising. The Buzz
Chapudi Mining Rights Granted Chapudi Project - Mining Right Granted 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 11 December 2018 CHAPUDI PROJECT - MINING RIGHT GRANTED MC Mining Limited (â€œMC Mining" or the â€œCompanyâ€) is pleased to announce that the South African Department of Mineral Resources (â€œDMRâ€) has granted a mining right for its 74% owned Chapudi coking and thermal coal project (â€œChapudi Projectâ€) in the Limpopo province. The Chapudi Project, together with the Mopane and Generaal Projects, comprise the Companyâ€™s longer-term Greater Soutpansberg Project (â€œGSPâ€) situated in the Soutpansberg Coalfield. The GSP is located within close proximity to the Musina-Makhado Special Economic Zone (â€œSEZâ€), an area designated by government to focus on amongst others, energy and metallurgical processing. The Chapudi mining right is the first of the three GSP mining right applications to be granted; these applications were submitted to the DMR during 2013. The Chapudi Project alone contains over 6.3 billion gross tonnes in situ of inferred coal resources1 and supports MC Miningâ€™s strategy to be a substantial producer of hard coking coal, used in the steel manufacturing process and typically attracting a significantly higher sales price compared to thermal coal. David Brown, MC Miningâ€™s Chief Executive Officer commented: â€œThe granting of the mining right for the Chapudi Project is a key step in unlocking value from MC Miningâ€™s significant coking and thermal coal assets and positions the GSP to be a potential long-term coal supplier to the planned Musina-Makhado SEZ. The Mopane and Generaal Project mining right applications are at an advanced stage and we anticipate that these will be granted in the near future. Following this, the Company will commence with the various studies required for the outstanding water and environmental regulatory approvals. We continue to advance our flagship Makhado hard coking and thermal coal project and the November 2018 agreement to acquire the Lukin and Salaita properties facilitates the completion of geotechnical and related infrastructure studies for the proposed colliery. Further, recent Makhado Project milestones include the conclusion of a hard coking coal off-take agreement while negotiations for the remaining hard coking coal as well as the thermal coal and funding initiatives
Power Black Outs Spotlight on Eskom to buy lots of coal. Should support the price of coal, plus indicates a continued demand if the shortage is so bad that black outs have occurred. Agreed its coking coal that really is important, but Uitkomst needs good prices as well. BBC News Africa Live: Anglophone separatists insist they are not Cameroonians Ten separatists said they were Amazonians when asked in military court case - and more stories "South Africa is experiencing a return of blackouts, prompting fears here of a repeat of widespread outages in 2008 which crippled the countryâ€™s economy. The rotational cuts known here as â€œload-sheddingâ€, resumed in recent weeks. The power utility Eskom switches off power in certain areas for some hours, this is done to prevent the grid from collapsing when demand is greater than can be met. While some have blamed the power cuts on a shortage of coal at the Eskom plants and mismanagement, the company says the disruptions are due to repair work at its generating units. â€œEskom would like to sincerely apologise for the inconvenience caused,â€ it said in a statement today. â€œWe continue to appeal to residents and businesses to use electricity sparingly during this period. Please switch off geysers as well as all non-essential lighting and electricity appliances to assist in reducing demand,â€ it added. Eskom has also refuted claims that it does not have enough coal reserves to meet the countryâ€™s electricity needs. Since the beginning of the year the company has signed nearly 30 contracts to get coal to their power stations, local media report. Itâ€™s not clear how long the planned outages will last this time. With businesses and major industries shutting down for the year over the next few weeks, some are hopeful this will take off some pressure off the grid and prevent further cuts in the country."
AGM notes Thanks very much for your detailed. I know that I would have really enjoyed going to the AGM and listening to progress with the now vibrant company. For so long there was a master plan to get the companyâ€™s finances in order, and progressively the major issues have been satisfactorily resolved. You mention a â€˜weirdâ€™ feeling on leaving the AGM - it must have felt a bit odd that MCM now seems to have emerged from the tunnel and one starts to blink in the bright light! As for the price of the coal - Uitkomst has exceeded expectations and must be worth much more than was paid for it - and is a valuable income. My perception is that the coal price will depend on the price of oil, but there is so much demand for quality coal than MCM will always do well. The key coal price will be for Makhado - looking at the price of Australian coking coal I also feel re-assurred that the price should give a good yield for MCM. As always it is a question of what it translates in terms of earnings per share. Clearly if DB expects more share price increases, then he must be expecting some very good earnings. All we need is for some iis to start taking an interest and for the share price to move up. Clearly MCM could be ripe as a take-over candidate once all the ducks have been put in a row - so I m feeling very optimistic that the MCM should do well over the coming months. The Buzz
AGM notes Here are my AGM notes. Lot you will know already but a few interesting points: Present: MC Mining: David Brown (DB) and Bernard Pryor (BP) Investors: Me Others: Tavistock, Computerserve and Nomad (Peel Hunt) Iâ€™ve been last few years to AGM plus EGM so they know me reasonably well. They definitely had a spring in their step and before meeting started BP had a glint in his eye as stated â€˜more good news to followâ€™. They were both bulled up by surface rights acquisition. Main business of passing resolutions lasted 15 mins. David Brown then gave a summary, I asked a few questions and then we continued for after 30 mins after meeting finished. He highlighted during main speech: Incredible progress been made over last 18 months against strategy: Uitkomst: ROM going up y/y. Dealt with equipment issues by purchasing mining company, expanding additional funding, seeing benefits from increasing maintenance plan and new roster system. Favourable pricing improving quarterly results. 2 initiatives: a) plant modification leading to 3rd production stream, increase ROM volumes by 10-15%. Expected January 2019; and b) development of N Adit, testing q1 2019 and get IWUL granted q1 leading to increase in ROM by 20%. Expected 2020; Uitkomst has been incredibly profitable, in 24 months time these developments would see Uitkomst cover all companyâ€™s overheads by itself; Mooiplaats: Sale made and all agreements in place so will receive balance of sale proceeds; Putting 1) and 2) together, i.e being in production, reduced liabilities and revenue coming in means they are very credible, viable business and banks giving the various loans financing. Definitely a sea change on that front, which leads onto: Makhado: Super-excited about this. Acquisition of 2 farms has led to this move sharp higher in share price and more to follow. Debt financing framework to be agreed by February . They then plan to present plan for execution to the board in March. He expects a significant increase in share price when plans are released. Before then, they anticipate they will have another off-take agreement signed for hard coking coal before end of year, hopefully in next two weeks with ArcelorMittal. He said Arcelor in main AGM presentation so thatâ€™s public information plus theyâ€™re a share holder so expected they would have off-take agreement; Very confident the last remaining regulatory piece, the Environmental Authorisation appeal will be overturned by February; Funding has been underpinned by marketing of hard coking coal. Cash generative very quickly, will be predominantly debt financed. New CFO (Brenda Berlin) has provided fresh impetus in terms of debt funding; Theyâ€™ve got on the Lukin and Salaita farms and checked everything secure etc in terms of fencing and security. They can get on with geological testing etc in February; CGA acquisition: Still doing due diligence on couple of potential targets. Nothing new but itâ€™s now a 3rd not 2nd CGA. they believe the futureâ€™s really bright. Just had the most positive cycle of board meetings since DB and BP joined. I asked a few questions then we continued speak afterwards: He expects Vele to come back into play at some point, especially with SEZ; GSP, of the 3 coal fields, expects mining rights to be granted this year for 2 of them this year, other one in 2019. Local community there have investment with Makhado so supportive but 5-10 year plan; I asked about institutional investors buying in, as that was part of point of the share consolidation. Theyâ€™re starting to see some interest, they were speaking with groups in March before government land expropriation failed. Obviously no interest after that. DB is very personable and had a good relationship with land owners, and probably down to him we acquired farms. Heâ€™s presenting at a mining Indaba in the new year and has number of potential investors lined up. We spoke for around 30 mins post meeting. General catch-up in the main. Chinese still keen on the project and pushing it forward, company seem to have a very good working relationship with members of SA government. I definitely left the meeting with a weird feeling, a belief this is now actually happening. Land acquisition massive step. DB did highlight flow of positive news in recent weeks, which he suggests will continue. It finally looks as though our patience may be rewarded. Happy to answer any questions on above.
Game changer Well, today MCM are back over 40p on very low volumesâ€¦ heading in the right direction. Formal news, production plans & positive financials are needed to complete the recovery for a prosperous future. HOLD for me, but could top slice a little above 60p if I need the cash elsewhere. Â£2 target is realisticâ€¦ so hope to hold until this is achieved at least.
Game changer Woops. I meant to say pre-consolidation price of 3p is a baseline giving minimum price of about 60p a post consolidation price. Factor in a healthy risk premium and I am thinking more in terms of Â£2+? Since the consolidation process has happened, I perceive that many things have now been positively resolved and with strong coal prices, huge coal orders, clearance for access of the land - not to mention the great performance of their thermal coal cash cow mine, there must be far greater valuation present now. The Buzz
Game changer Hi 2bozmo, Thanks very much for the offer. I suppose at the end of the day, what I want to know is what my future MLI dividend/profit (and in turn share price) is likely to be, assuming (say) that the price of coal were to remain around its current levels? Ie I am looking for re-assurance that there will not be a huge dilutive share issue and that the huge value of the coal assets finally translates into a worthwhile reward from some now very impatient shareholders. Anything that you can pick up on these areas would be most welcome, as the longer it is from the share consolidation, the further way we are from some reference share value and where it ought to be heading. At the back of my mind I am thinking that the shares will be worth at least 20p a share once all the risks have been taken out with a fully funded mine and a matching set of orders at the current high coal prices. The Buzz