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On 25 January 2019, MC Mining Limited (ASX:MCM), a Coal Mining & Metals processing company from the energy sector announced its December quarter results for the period ended 31 December 2018.
During the December quarter, there was only one lost-time injury at its Uitkomst Metallurgical and thermal coal colliery. The December quarter saw continuous inaccessibility of machinery, merging the ex-mining contractor staff and process challenges during the changeover to owner mining. As a result, there was a fall in the coal production during the period (Q2 FY2019) to 112,562 tonnes as compared to 140,501 tonnes in the previous comparative period (Q2 FY2018).
As a result of the reduction in the run of mine ("ROM") coal production, there was a decrease in the sales of the metallurgical, high quality and blended thermal to 67,606 tonnes as compared to the previous corresponding period. Also, the third parties did not purchase any coal as the contract expired in the Q2 of FY2018.
During the promising thermal coal prices period, the average revenue stood at $91.25 per tonne in Q2 FY2019 as compared to $61.09 per tonne in Q2 FY2018. Based on this, the company started the plant modification at the Uitkomst colliery to enable the production of additional high ash, coarse discard product.
During the quarter, the company catered to the T&Cs for the acquisition of Lukin and Salaita properties, leading to the transfer to Baobab Mining & Exploration. The company also agreed to obtain remaining two vital surface rights for the Makhado project.
The company during the December quarter entered into a coal purchase agreement with Huadong Coal Trading Center Co, Ltd which is a Chinese state-owned enterprise. As per the agreement, there will be an annual off-take of up to 450K tonnes of hard coking coal to be produced by the Makhado Project.
MXM was also granted the mining right for 74% owned Chapudi coking and thermal coal project ("Chapudi Project") by the South African Department of Mineral Resources ("DMR").
Itâs Vele coking, and thermal coal colliery was under maintenance till December quarter.
During the December quarter, the company was successful in securing its primary lending facility of $1.4 million from ABSA Bank Limited. By the end of the December quarter, MCM had a net cash balance of $5.4 million.
The official listing date of listing of MCM on ASX is 24 April 1980 where the overall performance of MCM was -93.11%. In 10 years, MCMâs performance was -92.78%. However, in last one year, MCMâs performance was 92.13%.
During the December 2018 quarter, MCM used A$2.492 million in its operating activities. The cash outflow was attributable to the payment made for the production, staff cost, administration, and corporate costs. There was also cash inflow in the form of receipts from the customers.
MCM used A$2.113 million in its investing activities, where the primary source of cash outflow was the payment made for the acquisition of property, plant and equipment, and other non-current assets.
MCM during the quarter used A$0.146 million from the financing activities where the primary source of cash outflow was through the repayment of borrowings.
By the end of December quarter FY2018, MCM had net cash and cash equivalent of A$5.440 million.
The shares of MCM closed the trading session at A$1.190, down by 2.50% on 29 January 2019 with the market capitalization of A$171.87 million.
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