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MC MINING LIMITEDMC MINING LIMITEDMC MINING LIMITED

MC MINING LIMITED

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Our opinion on the current state of MC-MINING(MCZ)MC Mining, previously known as Coal of Africa, is a small metallurgical coal company with a primary producing mine, Uitkomst, and several development projects, including the Makhado project, the Vele colliery, and MbeuYashu. Makhado, located in Limpopo, is the company’s flagship project. Expected to operate as an opencast mine with a projected 16-year lifespan, it aims to produce 800,000 tons of hard coking coal and 1 million tons of export thermal coal annually. Makhado’s viability improved after acquiring necessary surface rights in 2019. With partial funding from the Industrial Development Corporation (IDC), MC Mining still requires additional financing to bring Makhado into production. The company holds a 69% stake in Baobab Mining and Exploration, which owns Makhado. Earlier this year, Goldway Capital secured a takeover with shareholder acceptance exceeding 83%. On 24th June 2024, MC Mining announced that CEO Godfrey Gomwe would step down by the end of the month. In financial results for the year ending 30th June 2024, MC Mining reported an 18% drop in revenue and an after-tax loss of $14.6 million (3.54c per share), partially due to increased non-cash charges. Coal production at Uitkomst fell by 35% in the first quarter of FY2025, with high-grade coal sales halved compared to the same period. MC Mining remains a high-risk investment with its volatility, limited liquidity (trading only around R12,000 worth of shares daily), substantial debt, and the inherent uncertainties of mining development. The stock spiked temporarily in mid-2022 but has since returned to lower trading levels.
JSE:MCZ
by PDSnetSA
Our opinion on the current state of MC-MINING(MCZ)MC Mining (previously "Coal of Africa") (MCZ) is a small metallurgical coal-mining company with a single producing mine, Uitkomst. Aside from Uitkomst, the company is developing the Makhado project, the Vele colliery, and MbeuYashu. The Makhado project is the company's flagship operation in the Limpopo province. It is an opencast mine with a life of 16 years and the potential to be extended. In January 2019, the company announced the acquisition of surface rights which will make the Makhado project viable. Production is now expected to commence at the end of 2020, and the mine is expected to produce 800,000 tons of hard coking coal and 1 million tons of export thermal coal. The Makhado purchase improves the risks substantially and makes this into a viable investment. The IDC has provided R245m for the project, but a further R530m is still needed. The company owns 69% of Baobab Mining and Exploration, which owns the Makhado project. In its results for the six months to 31st December 2023, the company reported revenue up 80% and a headline loss of 145c (US) per share - up from a loss of 50c in the previous period. The company said, "International thermal coal prices remained under pressure during the period and the average API4 export coal price for the six months was $112/t (H1 FY2023: $265/t). Despite the depressed coal prices, Uitkomst Colliery generated pleasing results for the period with revenue of $16.3 million (H1 FY2023: $14.0 million), yielding a gross profit of $1.5 million (H1 FY2023: $3.9 million) and operating cash flows of $5.1 million." On 8th April 2024, Business Day reported that Goldway Capital had received acceptances from shareholders amounting to 83.67% of the issued shares - more than the 82.15% required for the takeover to proceed. On 24th June 2024, the company announced that Godfrey Gomwe would resign with effect from 30th June 2024. Technically, the share spiked up between July and September 2022 before falling back again to lower levels. This remains a volatile commodity share with about R280,000 worth of shares changing hands on average each day, high debt levels, and all the risks of mining exploration and development.
JSE:MCZ
by PDSnetSA
Our opinion on the current state of MCZMC Mining, formerly known as "Coal of Africa," is a modestly sized company focused on metallurgical coal mining, with Uitkomst as its only producing mine. Besides Uitkomst, the company is actively developing several projects, including the Makhado project, the Vele colliery, and MbeuYashu, showcasing its commitment to growth within the sector. The Makhado project, located in the Limpopo province, stands out as the company's flagship operation. It is an open-cast mine with a significant lifespan of 16 years, which may be extended further, emphasizing the project's long-term potential. In January 2019, a pivotal moment for MC Mining occurred with the acquisition of surface rights, making the Makhado project feasible. With production anticipated to start by the end of 2020, the mine is expected to yield 800,000 tons of hard coking coal and 1 million tons of export thermal coal annually, marking a significant milestone for the company. The viability and reduced risks associated with the Makhado project have significantly enhanced its investment appeal. Financial backing for the Makhado project is partly secured, with the Industrial Development Corporation (IDC) contributing R245m, although an additional R530m is still required. Ownership stakes are strategically structured, with MC Mining holding a 69% interest in Baobab Mining and Exploration, the entity that owns the Makhado project. For the six-month period ending on 31st December 2023, MC Mining reported an 80% increase in revenue alongside a headline loss of 145c (US) per share, an escalation from a 50c loss in the prior period. This financial performance reflects the volatility and challenges in the coal market, with international thermal coal prices experiencing significant pressure. Despite these challenges, the Uitkomst Colliery managed to generate satisfactory results, with revenue of $16.3 million and a gross profit of $1.5 million, alongside operating cash flows of $5.1 million. These figures demonstrate the colliery's resilience amid fluctuating coal prices. A significant development for MC Mining was reported on 8th April 2024 by Business Day, revealing that Goldway Capital had received acceptances from shareholders for 83.67% of the issued shares, surpassing the 82.15% threshold needed for the takeover to proceed. This move marks a crucial phase in MC Mining's corporate journey. From a technical perspective, the company's shares have exhibited volatility, with notable spikes between July and September 2022 before retracting to lower levels. This volatility underscores the inherent risks associated with commodity shares, coupled with MC Mining's high debt levels and the challenges of mining exploration and development. With approximately R280,000 worth of shares traded daily, the company's stock remains a high-risk but potentially high-reward investment option in the mining sector.
JSE:MCZ
by PDSnetSA
Our opinion on the current state of MCZMC Mining (previously "Coal of Africa") (MCZ) operates as a small metallurgical coal-mining company primarily focused on its single producing mine, Uitkomst. In addition to Uitkomst, the company is actively developing several projects including the Makhado project, the Vele colliery, and MbeuYashu. Among these, the Makhado project stands out as the flagship operation situated in the Limpopo province. This opencast mine boasts a projected lifespan of 16 years with the potential for extension. A significant milestone for the Makhado project was reached in January 2019 with the announcement of the acquisition of surface rights, crucial for its viability. Production at Makhado is anticipated to commence by the end of 2020, aiming to produce 800,000 tons of hard coking coal and 1 million tons of export thermal coal. This acquisition substantially reduces risks associated with the project, enhancing its attractiveness as an investment opportunity. To support the Makhado project, the Industrial Development Corporation (IDC) has provided R245 million in funding, yet an additional R530 million is still required. The company holds a 69% stake in Baobab Mining and Exploration, the entity that owns the Makhado project. In its financial results for the six months ending 31st December 2023, MC Mining reported a remarkable 80% increase in revenue. However, the company experienced a headline loss of 145c (US) per share, a significant increase from the loss of 50c in the previous period. Despite challenging international thermal coal prices, Uitkomst Colliery delivered encouraging results, generating revenue of $16.3 million and operating cash flows of $5.1 million for the period. From a technical perspective, the share price of MC Mining exhibited a spike between July and September 2022, followed by a subsequent decline to lower levels. As a volatile commodity share, MC Mining faces inherent risks associated with mining exploration and development, coupled with high debt levels. On average, approximately R280,000 worth of shares change hands each day, indicating relatively low liquidity in the market for this stock. Investors should carefully consider these factors before making investment decisions.
JSE:MCZ
by PDSnetSA
Our opinion on the current state of MCZMC Mining, previously known as "Coal of Africa" (MCZ), is a relatively small metallurgical coal-mining company with a single active mine, Uitkomst. In addition to Uitkomst, the company is actively engaged in the development of several projects, including the Makhado project, the Vele colliery, and MbeuYashu. The Makhado project holds a significant position as the company's flagship operation, located in South Africa's Limpopo province. This open-cast mine boasts a potential lifespan of 16 years, with prospects for extension. A pivotal moment for MC Mining occurred in January 2019 when the company announced the acquisition of surface rights, a strategic move that rendered the Makhado project economically viable. Production at the Makhado project was anticipated to commence by the end of 2020, with expected annual production of 800,000 tons of hard coking coal and 1 million tons of export thermal coal. This acquisition significantly altered the company's prospects, leading to a notable surge in its share price, reaching 950 cents in 2018. However, the share price has been on a gradual decline since January 2019, settling around 154 cents. The acquisition of surface rights for the Makhado project substantially improved MC Mining's risk profile, making it a more attractive investment. To support the project, the Industrial Development Corporation (IDC) provided R245 million in funding, although an additional R530 million remained required. It's important to note that MC Mining holds a 69% ownership stake in Baobab Mining and Exploration, the entity that owns the Makhado project. In its financial results for the year ending on June 30, 2023, MC Mining reported an after-tax loss of $4.4 million, representing a significant improvement compared to the prior year's loss of $20.8 million. Several factors contributed to this improvement, including a decrease in depreciation and amortization, a 20% increase in share-based payment expenses, and the absence of impairment expenses. Despite these losses, the company experienced a notable increase in revenue, which surged by 91% to $44.8 million. Concurrently, the cost of sales rose by 96% to $41.2 million. In a report covering the three months ending on September 30, 2023, MC Mining highlighted a 10% increase in run-of-mine coal production from Uitkomst compared to the same quarter in the prior year. Uitkomst successfully sold 100,449 tons of coal during this quarter. Notably, thermal coal prices continued to decline during this period, averaging US$109 per ton in the quarter, compared to US$115 per ton in Q4 FY2023 and US$325 per ton in Q1 FY2023. In contrast, premium steelmaking hard coking coal (HCC) prices remained relatively elevated, averaging US$258 per ton in the quarter, up from US$250 per ton in FY2023 Q1. Furthermore, MC Mining reported available cash and facilities of US$5.1 million, following a net cash balance of US$8.8 million in FY2023 Q4. In an update covering the three months ending on December 31, 2023, the company disclosed that run-of-mine production at Uitkomst had surged by 31%, with coal sales totaling 102,266 tons, a significant increase from the 56,817 tons sold in the second quarter. The company possessed cash facilities amounting to $3.4 million at the end of the quarter. From a technical perspective, MC Mining's share price exhibited notable volatility. It experienced a spike between July and September 2022 before subsequently receding to lower levels. This shares characteristic traits with other commodity-related stocks and has an average daily trading volume of approximately R106,000, making it susceptible to market fluctuations and carrying the inherent risks associated with mining exploration and development.
JSE:MCZ
by PDSnetSA
Our opinion on the current state of MCZMC Mining (previously "Coal of Africa") (MCZ) is a small metallurgical coal-mining company with a single producing mine (Uitkomst). Aside from Uitkomst, the company is developing the Makhado project, the Vele colliery and MbeuYashu. The Makhado project is the company's flagship operation in the Limpopo province. It is an opencast mine with a life of 16 years and the potential to be extended. In January 2019, the company announced the acquisition of surface rights which will make the Makhado project viable. Production is now expected to commence at the end of 2020 and the mine is expected to produce 800 000 tons of hard coking coal and 1 million tons of export thermal coal. This acquisition has changed the prospects for MC Mining dramatically and the share price jumped to 950c as a result in the 2018 year, after which it has been drifting downwards since January 2019 to levels around 154c. The Makhado purchase improves the risks substantially and makes this into a viable investment. The IDC has provided R245m for the project, but a further R530m is still needed. The company owns 69% of Baobab Mining and Exploration which owns the Makhado project. In its results for the year to 30th June 2023 the company reported an after-tax loss of $4,4m compared with a loss of $20,8m in the previous year. The company said, "...depreciation and amortisation decreased by 23% to $2.0 million (FY2022: $2.6 million), share based payment expense increased by 20% to $0.9 million (FY2022: $0.8 million), no impairment expense in FY2023 (FY2022: $14.9 million). Revenue for the Period increased by 91% to $44.8 million (FY2022: $23.5 million) and cost of sales increased by 96% to $41.2 million (FY2022: $21.0 million)". In a report on the 3 months to 30th September 2023 the company reported run-of-mine coal production from Uitkomst up 10% on the same quarter in the previous year and Uitkomst sold 100449 tons of coal during the quarter. The company said, "Thermal coal prices continued to decline, averaging US$109/t in the quarter compared to US$115/t in Q4 FY2023 and US$325/t in Q1 of FY2023. Premium steelmaking hard coking coal (HCC) prices remained elevated, averaging US$258/t in the quarter (FY2023 Q1: US$250/t); and • Available cash and facilities of US$5.1 million (FY2023 Q4: net cash balance of US$8.8 million)". Technically, the share has spiked up between July and September 2022 before falling back again to lower levels. This remains a loss-making commodity share with about R61 000 worth of shares changing hands on average each day, high debt levels and all the risks of mining exploration and development.
JSE:MCZ
by PDSnetSA
2
Our opinion on the current state of MCZMC Mining (previously "Coal of Africa") (MCZ) is a small metallurgical coal-mining company with a single producing mine (Uitkomst). Aside from Uitkomst, the company is developing the Makhado project, the Vele colliery and MbeuYashu. The Makhado project is the company's flagship operation in the Limpopo province. It is an opencast mine with a life of 16 years and the potential to be extended. In January 2019, the company announced the acquisition of surface rights which will make the Makhado project viable. Production is now expected to commence at the end of 2020 and the mine is expected to produce 800 000 tons of hard coking coal and 1 million tons of export thermal coal. This acquisition has changed the prospects for MC Mining dramatically and the share price jumped to 950c as a result in the 2018 year, after which it has been drifting downwards since January 2019 to levels around 154c. The Makhado purchase improves the risks substantially and makes this into a viable investment. The IDC has provided R245m for the project, but a further R530m is still needed. The company owns 69% of Baobab Mining and Exploration which owns the Makhado project. In its results for the year to 30th June 2023 the company reported an after-tax loss of $4,4m compared with a loss of $20,8m in the previous year. The company said, "depreciation and amortisation decreased by 23% to $2.0 million (FY2022: $2.6 million), share based payment expense increased by 20% to $0.9 million (FY2022: $0.8 million), no impairment expense in FY2023 (FY2022: $14.9 million). Revenue for the Period increased by 91% to $44.8 million (FY2022: $23.5 million) and cost of sales increased by 96% to $41.2 million (FY2022: $21.0 million)". Technically, the share has spiked up between July and September 2022 before falling back again to lower levels. This remains a loss-making commodity share with about R104 000 worth of shares changing hands on average each day, high debt levels and all the risks of mining exploration and development.
JSE:MCZ
by PDSnetSA
MC MINING LIMITED - Potential for further upside Potential for a retest of ~650-700c. After a month and 0.5 retracement in Nov-22, has shown a strong and relatively quick recovery, gaining back ~90% since Nov-22. Trade volumes in Jan are on the rise, as of today 24-Jan, consecutive monthly higher high / lows Since Nov-22. To monitor monthly close preferably keeping on / above ~390 levels Keep watch on macro environment for coal / energy in general. (Welcome any feedback - 1st post)
JSE:MCZLong
by practicalPlaye22604